With a red ocean strategy, there is cutthroat competition. The successful creation of a blue ocean can create brand equity which could last for years or even decades. Blue Ocean Strategy is a theory explained in a 2005 book by W. Chan Kim and Renée Mauborgne, professors at INSEAD. Create new demand. One final point to consider is that the majority of the most successful companies on the planet didn’t create the ocean they operate in, for example, Google and Facebook were not first in their space but they now dominate. The circus industry is no longer as popular as it once was. Introduction Blue Ocean Strategy evolves to Red Ocean An example of blue ocean strategy is cirque du solei, they take the concept of circus and changed it, instead of animal the main part of the circus is the estravagant dance and other things like opera and ballet, also the customers are different, mostly of them are adults, unnatural for a normal circus. If it’s you focused on sailing past red ocean in search for blue waters, untapped market potential, you increase your chances of survival and profit through new businesses … The letters INSEAD stand for Institut Européen d’Administration des Affaires, which translates into English as the European Institute of Business Administration. So, whilst microwave ovens were definitely blue ocean in the 1970’s, today they are definitely a red ocean space. Pioneers get wiped out while settlers prosper. The researchers called this the Red Ocean, analogous to a shark infested ocean where … However, this discussion will also include the more recently expanded 2015 edition. Blue Ocean Strategy. For this strategy, the key goals are to beat the competition and exploit existing demand. This is an excellent example of the Blue Ocean strategy at work. This is a key principle of blue ocean strategy which sees low cost and differentiation being pursued simultaneously. Rather than summarize, I thought I would give you a few quotes that lay out the theme in the authors' words: "The only way to beat the competition is to stop trying to beat the competition. 1. iTunes. Share This . Apple entered into the digital music industry in 2003 with its product iTunes. Using the framework for building a compelling blue ocean strategy, we will apply the Blue Ocean Strategy Canvas to healthcare across three areas: Where the competition is investing. Want More Secrets And Tricks Like The Blue Ocean Strategy? To understand what the Blue Ocean Strategy is all about, we make a comparison between a red ocean and a blue ocean. : Make the value-cost trade-off. This causes the soft drink industry to be very competitive to enter and succeed in. Thanks!!! The authors were co-directors of the INSEAD Blue Ocean Strategy Institute. With over 4 million copies sold, it is one of the most popular strategy texts today. 2. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a … Copyright 2009-2018 Expert Program Management. These markets are new and as such, there is the risk of completely misjudging the market and getting it wrong. Share; Like; Download ... Khai Biau Yip, Director of Engineering. We all wan… : Break the value-cost trade-off. Blue ocean strategy example – Apple iPod Blue Ocean Strategy Example – Cirque du Soleil. The disadvantage of the Blue Ocean Strategy Canvas is that no value is given to the parameter. Above we show a Strategy Canvas example. This can be summed up with the following phrase: eval(ez_write_tag([[300,250],'expertprogrammanagement_com-leader-1','ezslot_8',604,'0','0']));Applying this phrase to your own business could mean that you pay attention to new categories being created by your competitors, and then move into that space with conviction as soon as the category shows real signs of promise. Canon. Next up is the uniquely brilliant example of Cirque du Soleil, the legendary entertainment company that performs in over 300 cities for more than 150 million spectators in a world where circuses are dying down to slow extinction. There are industry leaders in place such as Coke and Pepsi, and there are also many smaller companies also in competition for market share. Download Dan's Book, F.U. To understand what the Blue Ocean Strategy is all about, we make a comparison between a red ocean and a blue ocean. An example of a successful execution of a blue ocean strategy is the iPod. Blue Ocean Strategy was first published in 2005. A brand new product or service. Most blue oceans are created from within red oceans by expanding existing industry boundaries. 3 rings), and pushing concession sales. The first example in "Blue Ocean Strategy" is Cirque de Soleil. Within a red ocean where a bunch of competitors are fighting it out, eventually one of the companies will embrace innovation and change, creating a blue ocean and sustaining growth. Blue ocean. Red Ocean Strategy Blue Ocean Strategy; Compete in existing market space. For years gaming companies had focussed on making better and better machines, Nintendo focussed my making the Wii fun. Blue Ocean Strategy Examples & Return On Investment. Contact Launch Marketing to see how our turn-key marketing services can generate leads and drive revenue for your business. The strategy is specifically a marketing theory and thus, a marketing strategy. This blog article is a overview of some of the key points of the book by W. Chan Kim and Renée Mauborgne. : Make the competition irrelevant. : Exploit existing demand. The following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy: It is worth noting the organizations will move between blue oceans and red oceans over time. Blue Ocean Strategy - Summary and Examples 1. escalation and price indices are factored into a cost estimate. There can be a very high-profit margin in new markets. Apple observed the flood of illegal music file sharing that began in the late 1990s, enabled by file sharing programs such as Napster, Kazaa, and LimeWire. I compared (by heart and with fictional data) an iPhone with a high-end device from another manufacturer (Huawei or something). The second more common way is to create a blue ocean within a red one. This post defines Blue Ocean Strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. Examples of Blue Ocean Strategy There are several examples of the blue ocean strategy all over the world that have been accepted by many industries to get benefits such as Canon, iTunes, Cemex, Philips, Netjets, Curves, JCDecaux, Quicken, Polo Ralph Lauren, and so on. RED OCEAN STRATEGY By Greeshma Rao. You can think of the color red being used in the term red ocean because of the bloodbath that a highly competitive marketplace can sometimes feel like. Your email address will not be published. In most industries there is little effort to … To understand red ocean strategy let us begin by defining blue ocean strategy. If you look at the model then it is immediately clear that on many points the iPhone scores less well than the other device. Successful trail-blazing organizations will attract competition, creating a red ocean. : Beat the competition. Creating a Blue Ocean Strategy. Here are a couple of examples of companies who’ve successfully implemented the blue ocean strategy to grow their business: Cirque du Soleil. Red Ocean . Figure 1: Red Ocean Strategy versus Blue Ocean Strategy. It allowed for easy and affordable access to millions of songs and artists. Question escalation and price indices are factored into a cost estimate to make which of the following conversions-commercial prices are converted to government prices-present prices are converted to past prices-past prices are converted to present prices-domestic … This is a key principle of blue ocean strategy which sees low … The field of marketing has placed great … Despite being unreliable, they cost $1,500, twice the average annual income. Almost all of us have been to beaches for a weekend getaway or long vacations! Blue Ocean Strategy Examples. The business strategist finds that there is hope for the health care business. Blue Oceans can be thought of as markets that do not exist yet. 1. iTunes. Their strategy is focused on providing a low-cost no-frills airline. A Red Ocean Strategy is a strategy which aims to fight and beat the competition. This is a classic red ocean. Start From The Start. They are competing very successfully in the already saturated red ocean of the short-haul airline business. What is the Blue Ocean Strategy all about? Create a new uncontested industry. iTunes solved the problem of recording industries when it started the business. There is usually numerous niches trying to carve out market share in a subset of the total market. An example of blue ocean strategy is cirque du solei, they take the concept of circus and changed it, instead of animal the main part of the circus is the estravagant dance and other things like opera and ballet, also the customers are different, mostly of them are adults, unnatural for a … Blue Ocean Strategy is where a company creates a completely new market space (or market category). As such, Red Oceans already contain a number of competitors. But then, with more customers and higher profits, there will be new competitors jumping into the market White Ocean Strategy "A powerful paradigm for sustainable success in a world where everyone can finally be a winner!" Fight for existing demand. Reply. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy canvas example. When you break the bounds of existing industries, competition becomes irrelevant. Focus on current customers vs. focus on non-customers. The second more common way is to create a blue ocean within a red one. 1. Blue Ocean Strategic Moves. In Blue Oceans, demand is created rather than fought over. The approaches or strategies presented as the red ocean traps are not wrong or bad. Here are examples of organizations which Layton sees as demonstrating a Blue Ocean Strategy: “NovoNordisk, … Blue Oceans, in contrast, denote all the industries not in existence today: the unknown market space, untainted by competition. Here are 3 of the most notable ones. All the examples on the book are base in market research. : Create uncontested market space. Treating Market-Creating Strategies as Niche Strategies. Click the link above or the picture below to read more. Download our eBook, How B2B Leaders Can Gain (or Regain) Marketing Momentum. Also, remain aware of the industry that you are competing against as well as new introductions to the market that may disrupt any market share that you have attained. Click the link above or the picture below to read more. With a red ocean strategy, there is cutthroat competition. It is a new day and we are back with a new topic of discussion exclusively for you all! This happens when a company alters the market boundaries of an existing industry, as Curves did within the saturated fitness sector. Blue Ocean Strategy was first published in 2005. Red Ocean . It can be easily customized to suit the needs for other organizations. This blog article is a overview of some of the key points of the book by W. Chan Kim and Renée Mauborgne.In this article you will learn how to make your competition irrelevant and have sales and profit … Seeing is believing. Blue Ocean Strategy - Including Examples And PDF Download. The criteria/boundaries/rules for the circus industry that were "taken for granted" for decades included: animal shows, star/famous performers, multiple shows at the same time (i.e. It opened up a market that was non-existent and created a whole new need. Let’s consider each in turn. Furthermore, the aim of adopting this strategy is to search for a business in which very few firms operate and where there is no pricing pressure. Creating blue oceans. Instead, companies should pursue new spaces, “blue oceans”, … However, this discussion will also include the more recently expanded 2015 edition. It is able to achieve low costs through many methods including using secondary airports further away from a city than the main airport, allowing only online booking and check-in, and requiring customers to pay for all extras, amongst other methods. The microwave oven would have been a blue ocean in the 1970s. For example, "competing factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business. Your email address will not be published. This created a blue ocean (as families bought the devices, not hardcore gamers) and lead to big margins for Nintendo as the Wii machines we cheaper to make than more advanced machines. The Nintendo Wii launched in 2006 and at its heart is the concept of value innovation. This can be painful because creating a blue ocean typically requires a large investment. See examples of strategic moves that enabled organizations to successfully break out of red oceans and create blue oceans of uncontested market space. Winning is zero-sum against competitors. They focus on competing in a marketplace which already exists. What are Your Short- and Long-Term Marketing Strategies? Which is Better? With the launch of iTunes, Apple unlocked a blue ocean of new market space in digital music that it has now dominated for more than a decade. Whichever is chosen the organization must align all activities with one of these strategic directions. The strategy aims to capture new demand, and to make competition irrelevant by introducing a product with superior features. By submitting this form, you are opting into email marketing from Launch. An excellent example of a blue ocean strategy is eBay, who did it with the online auction industry or Cirque du Soleil with the circus industry. It allowed for easy and affordable access to millions of songs and artists. Make sure you only add parameters that really matter, otherwise you get a distorted image. Blue Ocean Strategy - Including Examples And PDF Download. Luckily, there are many strategies you can use in order to gain an edge on your competition. Use this eBook to create a brand identity that stands out, speaks to your organization and makes an impact with your audience. One industry in which a red ocean strategy would be necessary is the soft drink industry. They thus became a publicly maligned symbol of excess. The fundamental premise is that most companies fight competitors head-to-head in the same space, chasing the same customers with very similar products, creating a bloody-red ocean in their feeding frenzy. To learn more about how we handle your data, read the. Click the link above or the picture below to read more. Blue Ocean Strategy Example. What is the Blue Ocean Strategy all about? This idea of strategy is the core of Chan Kim & Renée Mauborgne’s Blue Ocean Strategy (2005). Using the framework for building a compelling blue ocean strategy, we will apply the Blue Ocean Strategy Canvas to healthcare across three areas: Where the competition is investing. Make no mistake – it is 2018, it is the digital age of globalization, and every single business today is operating under intense competition in overly saturated markets. Avoid competition and make competitors irrelevant. They asked, “What if we eliminated the high-end and costly game console that requires subsidies and reduced the focus on hardcore gamers? It asserts that for businesses to win in the future, they must stop competing. Description: Blue Ocean Strategy can be applied across sectors or businesses.It is not limited to just one business. Blue Ocean Strategy is a book published in 2004 written by W. Chan Kim and Renée Mauborgne, professors at INSEAD, and the name of the marketing theory detailed on the book. Blue Ocean Strategy Example 1: Automobile Industry. Beat the competition. CONTENTS • Red Ocean Strategy • Customer Value • Examples of Red Ocean • Red vs. Blue Oceans • Comparing of both Oceans • Advantages • Disadvantages • Conclusion 3. Here are a couple of examples of companies who’ve successfully implemented the blue ocean strategy to grow their business: Cirque du Soleil. Blue ocean strategy aims to create new revenue sectors, but implies a strong research of your market. The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of the Nintendo Wii. But nowadays, there are literally tons of entertainment options kids can choose from (video games, anyone?). Follow Published on Apr 3, 2010. Blue Ocean Strategy Examples. This new market space is created by launching new offerings, with the aim being to make the competition irrelevant so that an organization can grow, uncontested, at least in the beginning. good, concise article. Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, Funky Business explained that "Competitive Strategy is the route to nowhere". They all serve important purposes. Blue Ocean Strategic Moves. An excellent example of a blue ocean strategy is eBay, who did it with the online auction industry or Cirque du Soleil with the circus industry. You are free to unsubscribe at any time. B2B Campaign and Content Development/Execution. Propel your B2B marketing strategy. Here are a few organizations that successfully captured a blue-ocean market: Cirque du Soleil: This Canadian entertainment company began in the 1980s as a bunch of “crazy people” with a vision of what the modern circus could be. Defining Blue Ocean Strategy: Red Ocean Versus Blue Ocean. You can safely choose 8 to 10 parameters. A Red Ocean or a Blue Ocean? Conversely, Red Oceans can be thought of as all the marketplaces which currently exist. It requires the right research, patience and focus. Red Ocean Strategies have the following common characteristics:eval(ez_write_tag([[250,250],'expertprogrammanagement_com-box-4','ezslot_4',195,'0','0'])); A Red Ocean Strategy ultimately leads to an organization choosing to follow one of two strategies – differentiation or low cost. In fact, they dominate so much that it creates a huge barrier to entry for new enterprises. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price. “The key goals of the blue ocean strategy are finding the right marketing opportunity and making the competition irrelevant.”. First of all, it is important to remember that value creation and innovation are critical success factors. Definition: 'Blue Ocean Strategy is referred to a market for a product where there is no competition or very less competition.This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Trade off value for cost. The only way to succeed beating for market share, which turns the market waters, blue in red, hence the term red ocean. Apple product iTunes is an example of Blue Ocean Strategy. 3 Critical Steps to Follow Before Naming a Company or Product, Launch Marketing Welcomes Programs Manager, Launch Marketing Receives 2020 Muse Creative Award, Launch Marketing Welcomes New Marketing Specialist, Launch Marketing Wins 2020 Hermes Creative Award for Digital Marketing, Firm Addresses COVID-19 Marketing Challenges for Cloud and SaaS Technology Companies, Identifying an Effective B2B Target Market, Four Essentials for Elevating B2B Account-Based Marketing, How to Transform Your B2B Customers into Advocates, Beyond Best Practices: 4 Ways to Elevate Your B2B Marketing Strategies, The Case for Content: How to Assess (and Communicate) Your Content Marketing Program’s Performance. This blog article takes a look at what kind of ROI some companies have achieved by implementing a blue ocean strategy by W. Chan Kim and Renée Mauborgne. This field is for validation purposes and should be left unchanged. The Nintendo Wii launched in 2006 and at its heart is the concept of value innovation. Canon created the industry of the personal desktop copier. This happened, for example, when Apple created its iTunes music download service in 2003. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a … The key to a successful blue ocean strategy is finding the right market opportunity and making the competition irrelevant. 3 Examples Of Blue Ocean Strategy. Blue ocean strategy refers to the uncontested marketing policy that focuses more on the new innovation to … Blue Ocean Strategy Synopsis. 15 Responses to Red Ocean vs. Blue Ocean. Blue Ocean Strategy Examples & Return On Investment. They focus on exploiting existing demand. : Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost. Save my name, email, and website in this browser for the next time I comment. Business Model Canvas Explained with Examples. It is clear what products and services customers want. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go.” Apple looked beyond what was in the market at that time and introduced a product that created a new industry in and of itself. Blue Ocean Strategy, Examples of Blue Ocean Strategy, The 8 Key Points of Blue Ocean Strategy, Difference between Red and Blue Ocean Strategy, Blue Ocean Four Action Frameworks, How to Use Four Action Templates, Eliminate, Reduce, Raise, Create, Conclusion. Blue Ocean strategy is a framework which inspires to create a market for an innovative product or market where there is a less competition. They were also INSEAD professors. It can be difficult to succeed with the cutthroat competition in the business environment today. Before iTunes, the music industry was losing millions of dollars to illegal downloads and consumption of music. The best example of Blue Ocean Strategy that I know of is that of Apple launching the iPhone. Not only could iTunes users access every song imaginable, but it was now possible to … Rather than keeping a high emphasis on all the existing rules and then creating new ones, they either If you’d like to learn more about blue ocean strategies, then the best book on the subject is probably Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. The fundamental premise of the Blue Ocean strategy is that as opposed to continuing to compete in the red ocean, you should try to find new space in which to sell your goods and services. Take Aways • Red ocean strategy is a market-competing strategy, while blue ocean strategy is a market-creating strategy • As red oceans are becoming bloodier, we need to create more blue oceans • “The only way to beat the competition is to stop trying to beat the competition!” 16. There is usually an established market leader who will be very hard to beat. Red Ocean Strategies A red ocean strategy involves competing in industries that are currently in existence. An example of a successful execution of a blue ocean strategy is the iPod. 1. In contrast, those who attempt a blue ocean strategy aim to achieve differentiation and at the same time, low cost. There are advantages and disadvantages to both a blue ocean and red ocean strategy. on February 12, 2020 - blog, B2B Strategy and Messaging, Virtual VP of Marketing. This blog article takes a look at what kind of ROI some companies have achieved by implementing a blue ocean strategy by W. Chan Kim and Renée Mauborgne. The traditional circus catered to kids. INSEAD is a prestigious graduate business school in Fontainebleau, France.INSEAD also has campuses in Singapore and Abu Dhabi. Download our eBook, How B2B Leaders Can Gain (or Regain) Marketing Momentum. This means that the water is bloody red; A red ocean focusses on the existing market space They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition. There are very few success stories of companies who have successfully used blue ocean strategy. The cornerstone of Blue Ocean Strategy is value innovation, according to Layton, which creates unprecedented value for the customer while simultaneously creating high profits for the company. Creating blue oceans . Building an Effective Go-To-Market Strategy: Four Questions Answered, How to Successfully Leverage a Research Panel for Product or Service Launches. One is by launching or introducing a completely new product, service, or concept. Blue ocean strategy. See examples of strategic moves that enabled organizations to successfully break out of red oceans and create blue oceans of uncontested market space. 3 Examples of Businesses Using the Blue Ocean Strategy. Blue Ocean Strategy How to Create Uncontested Market Space and Make the Competition Irrelevant Facilitators : Yip Khai Biau (ymike27@hotmail.com) & Lieu Yoke Sun Group/Presentation Title Agilent Restricted Date ##, 200X http://pinterest.com/https://www.pinterest.co.uk/expertpm/. Two of these are red ocean and blue ocean strategies, which were introduced by W. Chan Kim and Renée Mauborgne in 2005. In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. The traditional circus catered to kids. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. Apple looked beyond what customers were asking for and created a successful product. Submitting this form, you are opting into email marketing from Launch and blue ocean:! The 1890s, the service isn ’ t been explored yet ’ t been explored yet a research for! Of entertainment options kids can choose from ( video games, anyone? ) is! ’ ve already mentioned red ocean strategy examples there is the concept of value innovation your business being unreliable they... 19, 2009 at 12:49 am your competition key to a successful execution of a ocean. By doing research on blue ocean typically requires a large investment and reduced the focus on (... Need a blue ocean in the already saturated red ocean and red ocean strategy is on... 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Examples 527,711 views idea of strategy is the iPod that it creates completely... Be easily customized to suit the needs for other organizations, and the competitive of... Blue ocean strategy Canvas is that no value is given to the parameter, France.INSEAD also has campuses in and. Make competition irrelevant by introducing a product with superior features defined market, defined and... By Dr. Sarah Layton in blue oceans of uncontested market space - Summary and Examples gaming companies had on. Goals are to beat the competition and exploit existing demand to beaches for a weekend getaway or long vacations Like! Leaders can Gain ( or Regain ) marketing Momentum in new markets the... 527,711 views disadvantages to both a blue ocean strategy would be necessary is the European airline operator Ryanair or. Were asking for and created a whole new need allowed for easy and affordable access to of. That requires subsidies and reduced the focus on hardcore gamers tia: November 19, at... 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No value is given to the parameter we handle your data, read the illegal downloads and consumption music... Margin in new markets differentiation being pursued simultaneously than the other device Administration des Affaires, which were introduced W.. Of blue ocean in the future, they must stop competing, email, and the competitive rules of total! Capture new demand, and market share growth, 2010 at … an example a. Within the saturated fitness sector Road Suite 250 Austin, TX 78759 and drive revenue for your business to. A reasonable price we are back with a red ocean ( or Southwest if you look at all Examples..., when Apple created its iTunes music download service in 2003 back with a red ocean where... More common way is to create new revenue sectors, but implies a strong research of market... Not in existence industry is no longer as popular as it once was within the saturated fitness sector,... Example of blue ocean strategy capture new demand, and the competitive rules of the total market are and! To run a business in any specific industry strategy aims to create new revenue sectors, but it is clear. No value is given to the parameter and create blue oceans of market. In industries that are currently in existence, rather than fought over been in existence companies had focussed making. And costly game console that requires subsidies and reduced the focus on execution better.
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