blue ocean strategy vs red ocean strategy

blue ocean strategy vs red ocean strategy

When Red Ocean becomes too crowded, the need of creating a Blue Ocean strategy will increase. Value innovation is the cornerstone of Blue Ocean Strategy. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. Blue Ocean and Red Ocean Strategy.docx - 1 In your own ... To beat the competition, companies try to differentiate their product from others. It is a great way to mobilize thinking around new differentiators (value creation). The counter to the blue ocean is the red ocean. Traditional Competitive Strategies. Red ocean. In 2005, Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant, a book by Professors W. Chan Kim and Rénee Mauborgne, launched a . Blue ocean strategy & red ocean strategy - SlideShare Companies often bring innovations that replace existing products/services. Red Ocean Strategy explained with lots of Real Examples. To tell the truth, it is quite challenging to come up with the idea of a completely original and unique project. In your own words, explain the difference between the red ocean and blue ocean strategies. Klaim dari penulis bahwa buku Blue Ocean Strategi ditulis berdasarkan data dan riset dari sekitar 30 industri dalam kurun waktu cukup lama. Blue Ocean Strategy. Essay • gestiopolis The goal of a Blue Ocean Strategy is for organizations to find and develop "blue oceans" (uncontested, growing markets) and avoid "red oceans" (overdeveloped, saturated markets). DISADVANTAGES • Intermediate strategy • Eventually becomes red ocean • If frameworks are not properly executed, it promote market complacency. Introduction "Blue Ocean Strategy" by W. Chan Kim and Renee Mauborgne is a strategy that challenges companies to distance itself away from fierce competition by establishing uncontested market space that makes existing competition irrelevant. Build a market space that is undisputed. Breaking out of Red Ocean of Bloody Competition Examples of how Blue Ocean Strategy can be used for Zara Color.fashion case study. Red and Blue ocean strategy Red ocean strategy - is to improve the market share in the current market and creating demand beyond expectations. Align the firm's activities with the planned choice of low cost and differentiation. Make the value-cost trade-off. Uber Disruptive can use following Blue Ocean Strategy (BOS) tools and techniques to overcome the red ocean of cut throat competition in Leadership & Managing People industry. The Blue Ocean strategy framework has become popular since around 2005, on the initial publication of "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant", by W. Chan Kim and Renee Mauborgne. (DOC) Blue Ocean Strategy Paper | Janet Tran - Academia.edu Mengenal Red Ocean Strategy dan Blue Ocean Strategy ... In blue ocean, strategy creates new needs and wants of…show more content…. In their 2005 book entitled, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, Professors W. Chan Kim, and Renée Mauborgne of INSEAD, a graduate business school with locations in Europe and the Middle East, put forth a simple, but effective argument as to why markets should be divided into two distinctly different categories. Blue Ocean Strategy and its Implications for Businesses BLUE OCEAN STRATEGY Red Ocean Strategy Blue Ocean Strategy Virgin Cola Red Bull Competed vs. Coke and Pepsi with Niche product: carbonated traditional cola offering "energy drink" beverage . But we believe that a Blue Ocean move will give the company a head start it requires to understand and conquer the existing . The Red Ocean Strategy focuses on existing markets, whereas the whole concept of the Blue Ocean Strategy is to break the status quo and come up with something unique and new. The concept was invented by W. Chan Kim and Renée Mauborgne in 2004. Differentiation and low cost. Red Ocean Strategy Blue Ocean Strategy Compete in existing marketing Beat the competition Exploit existing demand Make the value-cost trade-off Align the whole system of a firm's activities with its strategic Choice of differentiation or low Cost. A red ocean is a saturated market with industry competitors. While Toyota also actively pursues the red ocean strategy, it is also an avid follower of the blue ocean strategy. Blue Ocean Strategy coexists alongside Red Ocean Strategy (Competitive Strategy). Pengertian Blue Ocean dan Red Ocean. เปรียบเทียบระหว่าง Blue Ocean Strategy กับ Red Ocean Strategy. Red ocean. By identifying untapped (or at least less tapped) product markets where unique buyer segments and needs can be identified and satisfied, Blue Ocean Strategy results to . BLUE OCEAN STRATEGY ADVANTAGES • Sets standards • High profit margin in a new market • A blue ocean strategic move can create brand equity that could last for decades. Align the whole system of a firm's activities with its strategic choice of differentiation or low cost. Build and identify new demand. 40. Some are created within red oceans by expanding existing industry. The strategies of a blue ocean it must have the following characteristics: Focus. Exploit existing demand. Beat the competition. EMBA Pro Blue Ocean Strategy Approach for Coca-Cola vs. Pepsi-Cola (A) At EMBA PRO, we provide corporate level professional Marketing Mix and Marketing Strategy solutions.Coca-Cola vs. Pepsi-Cola (A) case study is a Harvard Business School (HBR) case study written by Andrall E. Pearson, Constance L. Irwin. Waiting for the weather to change is not what category creators and category designers do. Is defined by untapped market space, demand creation, and the opportunity for highly profitable growth. This is the most known type of market, as you are competing directly with competitors to offer your products to people already looking for it and trying to find the best price for them. The strategy aims to develop a brand new market segment within the industry and does not focus on overcrowded existing . But many companies have done their homework and succeeded thanks to this strategy. In fact, Blue Ocean strategy cannot be avoided in modern business. Blue Ocean Strategy refers to this sort of behavior as consistent with companies caught in red oceans — where the only way to compete (against vicious competition) is in a race to the bottom. Coca-Cola differs in its adoption of the blue ocean strategy to achieve rapid growth in unexplored market spaces. Enabling red ocean products, to feed new, blue ocean initiatives - is the key to the success of any organization. Based on the discussion, it is safe to say that the blue ocean is a better way to bring fewer risks, more success, and increased profits. Create and capture new demand. Red Ocean Strategy Blue Ocean Strategy; Participate in a market space that already exists. It seems that everything that could have been invented, is already there. blue ocean strategy [46] or as a disruptive innovation, it is wise to begin in incremental stages in assessing the effectiveness of a new idea in a new market space [47]. (While wearing a rain hat.) In Red Oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Blue vs Red Ocean. GE1715 08 Handout 1 [email protected] *Property of STI Page 1 of 4 BLUE OCEAN STRATEGY R ed O ce an v s. Blu e Oc ea n Blue oceans are not about technology innovation. . Red Ocean marketing focuses on competition in the existing market space by directly competing with others. A blue ocean strategy is focused more on the new trends and demands of the consumers in creating a new market based on it. "The key goals of the red ocean strategy are to beat the competition and exploit existing demand." One industry in which a red ocean strategy would be necessary is the soft drink industry. Blue Ocean Strategy is where a company creates a completely new market space (or market category). Having Lots of Competitors or a Fierce Competition. ∗Achieved via the delivery of features that have a highest marginal benefit to customer needs . Blue Ocean Strategy Paper Janet Tran MKT/421 Susan Tomaski University of Phoenix February 2, 2015 f Blue Ocean Strategy Paper The blue ocean strategy is a unique marketing approach aimed to building a strong customer base. LEARN MORE ABOUT RED AND BLUE OCEANS BLUE OCEAN STUDIO ™ Competition is irrelevant because the rules of the game are waiting to be set. Sehingga nantinya Anda diharapkan bisa . Coca-Cola adopts the broader blue ocean strategy through different means and frameworks. In case of blue ocean strategy the emphasis of the company is on research and development because new products can only be made if company invests funds into research department whereas in case of red ocean strategy the emphasis is on good service and timely delivery to the customers because emphasis in this strategy is the satisfaction of the . Blue Ocean is a dynamic process that helps companies to create, and capture their own business. The concept is quite simple to understand. In short, Red ocean strategy refers to competing for the existing marketplace, where the blue ocean strategy denotes making a new uncontested marketplace. 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. The result of the competition is destruction, which draws the analogy of red blood in . Red Oceans are described as all the industries in existence today: the known market space. Red Ocean Versus Blue Ocean Strategy Create uncontested market space Align the whole system of a . Red Ocean vs. Blue Ocean Strategy. But, red ocean strategy examples such as Jio are proof that an organization can be successful in a red ocean market with the right strategies and products. 8 Make use of demands that already exist. Summary Of The Blue Ocean Strategy This strategy, which is based on extensive research of hundreds of companies spanning across decades and including several industries, proclaims that instead of battling competitors, companies can create new markets for themselves. Introduction. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. Red Ocean Strategy Blue Ocean Strategy . Strategi samudra biru adalah upaya sebuah bisnis untuk keluar dari persaingan bisnis yang sangat ketat, dengan cara menciptakan ruang pasar baru yang tidak ada pesaingnya. Blue Ocean Strategy vs. Blue Ocean Strategy vs. Red Ocean Strategy. Blue ocean vs. red ocean Kim and Mauborgne argue that while traditional competition-based strategies (red ocean strategies) are necessary, they are not sufficient to sustain high performance. While Coca-Cola also actively pursues the red ocean strategy, it is also an avid follower of the blue ocean strategy. Red ocean. The strategy focuses on moving away from an existing market and seaching for new markets. 4.4 The Three Characteristics of a Successful Strategy 4.5 Interpretation of the Value Curves 4.6 The Six Blue Ocean Principles 4.7 The Formation and Implementation of the Blue Ocean Strategy 4.7.1 Recreation of the Market Limits 4.7.2 Focus on the General Performance, not Numbers 4.7.3 Approach the Market Beyond the Existing Demand Red Ocean Strategy. Specifically, these new markets give a company a very high competitive advantage as well as low price/cost pressure. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. In contrast, a blue ocean strategy means no competitors, and it's easier for your company to thrive. Beat the competition. Zara Color.fashion can use following Blue Ocean Strategy (BOS) tools and techniques to overcome the red ocean of cut throat competition in Sales & Marketing industry. Implementing the blue ocean strategy is, simply put, a gargantuan task. We are in the middle of the ocean when a swarm of hungry sharks surrounds our boat looking for prey. Red Ocean Traps Red ocean theory is effective in fighting market competition, but managers must look for greener pastures (in this case, blue oceans). The name Blue Ocean is a Metaphor for a sea where fishes don't need to eat each other to survive.. RED OCEAN VS. BLUE OCEAN STRATEGY. Blue Ocean. Because, only with a blue ocean strategy and the right entrepreneurial mindset, you can swim into a more profitable and distinct blue uncontested market space. WHAT IS RED OCEAN STRATEGY? That will cover 23 Modules of Business And Digital Marketing li. I believe that the Blue Ocean strategy is intended more for MNEs because it may require more resources to survive and be successful in those markets. It could be through a unique product feature, a niche target audience, excellent customer service or competitive pricing. Blue Ocean Strategy is a marketing theory in which a business enters a market that has little or no competition. Segment the market. Compete in existing market space. Characteristics of a strategy. Strategy execution follows formulation. Zara Color.fashion can use following Blue Ocean Strategy (BOS) tools and techniques to overcome the red ocean of cut throat competition in Sales & Marketing industry. 2. Imagine this: we are scuba diving in the Bahamas (post-COVID of course). Blue Ocean Create uncontested market space. Every blue ocean move will ultimately turn into a red ocean. Blue Vs. Red Ocean. The researchers called this the Red Ocean, analogous to a shark infested ocean . One of the reasons why the authors have used the colours red and blue is to describe the market. Here's a neat little summary for each strategy: Leading-edge technology is sometimes involved in the creation of blue oceans, but it is not a defining feature of them. Blue Ocean Strategy vs. Red Ocean Strategy. What are Red Oceans and Blue Oceans? Exploit existing demand. Red Ocean vs. Blue Ocean Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Breaking out of Red Ocean of Bloody Competition Examples of how Blue Ocean Strategy can be used for Zara Color.fashion case study. Red ocean. Red ocean. The chart above summarizes the distinct characteristics of competing in red oceans (Red Ocean Strategy) versus creating a blue ocean (Blue Ocean Strategy). "The Blue Ocean Strategy" shows that many of the business strategy of the past few decades had focused on competition.In these strategies, called by the authors W. Chan Kim and Renée Mauborgne as red oceans, market structures are known, and companies try to outperform their rivals for a part of an existing demand.. One strategy example of that is the SWOT analysis by Michael Porter. Blue Ocean is a strategy of innovation in new market space where competition does not exist. Blue Ocean Strategy is a concept that has been pioneered by INSEAD Professors, W. Chan Kim, and Renee Mauborgne. The color of the Ocean is red, due to fish blood. Blue Ocean Strategy The "Blue Ocean" approach is a strategic tool that helps innovation strategists' asses current and desired future strategic states whereas..Red Ocean is a current state. Toyota differs in its adoption of the blue ocean strategy to achieve rapid growth in unexplored market spaces. For example, cold drinks belong to the Red Ocean as there are so many companies selling them, however, a new generation of 3D printers or self-driving electronic cars . The blue ocean market is mostly concentrated on providing value and is created based on that. Adalah W. Chan Kim & Renee Mauborgne sang penulis buku Blue Ocean Strategi yang berpendapat bahwa strategi Blue Ocean jauh lebih baik dalam profitabilitas. the "buyer utility map" and how to find pain points in existing industries. To understand red ocean strategy let us begin by defining blue ocean strategy. Recommendation part was done with ideas of 4 team members***. Blue ocean strategy differs from red ocean strategy mainly in three aspects, i.e., competition, demand, and value-cost trade-off . The blue ocean strategy fundamentally challenges leaders to assess the value rather than the technology. The expectations in this ocean are to have high yields, higher demand and opportunities for growth. In contrast, blue ocean strategy creates new demand within red ocean market. Moreover, the impacts of the shift from Red Oceans to Blue Oceans have been clarified. Thus, UK people believe that inequalities amongst people should . You must keep in mind that there is a deeper potential of the marketplace that hasn't been explored yet. It rejects the principles of trading low cost vs value proposed by Michael Porter. Companies that create a new category can capture larger percentages of the . This revolutionary Red vs Blue Ocean Strategy helps businesses create new markets rather than compete in existing ones. A company will have more success, fewer risks, and increased profits in a blue ocean market. Most blue oceans are created from within red oceans by expanding existing industry boundaries. You must keep in mind that there is a deeper potential of the marketplace that hasn't been explored yet. Red Ocean looks at cost saving or differentiation while Blue Ocean focuses on doing both. Like the 'blue' ocean, it is vast, deep and powerful -in terms of opportunity and profitable growth. These can emerge from a red ocean when looking to go beyond the existing market segment limits. Most blue oceans are created from within red oceans by expanding existing industry boundaries. De-segment the market. In this 5 minute blog, I'll tell you what the difference is between a red vs blue ocean, and how certain entrepreneurial skills can help you survive a bloody red ocean. STUDY. In their classic book, Blue Ocean Strategy, Chan Kim & Renée Mauborgne coined the terms 'red ocean' and 'blue ocean' to describe the market universe. Dalam dunia bisnis strategi blue ocean adalah sebuah strategi yang akan membantu bisnis yang Anda jalankan untuk melakukan sesuatu yang baru atau keluar dari samudera merah (blue ocean ) dengan cara membuat sesuatu yang sama sekali baru dan belum ada pesaing nya. Vision, Mission and Values - Vision - it's a statement. Blue ocean strategy - is process of making new market and new demand by combination differentiation and low cost strategy. ∗Blue Ocean Strategy is a: ∗Value Innovation Strategy - competes in an uncontested market space ∗"Combination Strategy ": pursue differentiation while controlling costs. For instance, automobiles replac. Fourth, companies following red ocean strategies choose a strategic option, either to differentiate their products and services or to pursue low cost, increasing their profits through large scale. Either differentiation or low cost. We throw a single fish into the ocean and… boom. A Blue Ocean Strategy is the name of the optimal Strategy to follow in New Markets.. Kim and Mauborgne claim that blue ocean strategy makes sense in a world where supply exceeds demand. The blue ocean is the name for a newly discovered or created business, while the red ocean indicates an already existing industry. There is a defined market, defined competitors and a typical way to run a business in any specific industry. Toyota adopts the broader blue ocean strategy through different means and frameworks. These competitors may possess a competitive advantage driven by cost, differentiation, or niche market strategies. Red oceans are all the industries in existence today - the known market space. Breaking out of Red Ocean of Bloody Competition Examples of how Blue Ocean Strategy can be used for Uber Disruptive case study. With a focus of not just beating your competition but making them irrelevant, Blue Ocean strategy is all about thinking outside the box. Their strategy is to capture more from the existing demand while blue ocean strategy concerns to create a new demand. The blue ocean strategy searches for opportunities to create new markets where none exist. Red Ocean Markets are Characterized for:. BLUE OCEAN STRATEGY BLUE OCEAN VS RED OCEAN STRATEGY Create uncontested Compete in existing market space Make the competition irrelevant Create and capture new demand market space Beat competition Exploit existing demand fBLUE OCEAN VS RED OCEAN STRATEGY Break the value-cost trade Make the value-cost trade Strategic alignment. The concept was invented by W. Chan Kim and Renée Mauborgne in 2004. The concept of Blue Ocean is not new, but the theoretical framework is! A Red Ocean Strategy is the name of the optimal Strategy to follow in a very Competitive Market.. Although it would be foolish to dismiss competitive strategy altogether the study shows that competition eventually erodes the profits from innovation, but it is a slow process requiring 15 years or so, which suggests that it takes the better part of a generation for the blue-ocean approach to yield to competitive strategy. Competition is irrelevant. Blue Ocean Shift is for people who understand and accept the Blue Ocean Strategy already, and then gives more applicable ways to actually put it into practice when starting or growing a business, i.e. Blue Ocean vs Red Ocean Strategy. SARAH GREEN: So Blue ocean strategy is about how can any company or organization break out of the red ocean of bloody competition or existing market space, which tends to be very crowded and . กลยุทธ์สำหรับ Red Ocean นั้นค่อนข้างจะเป็นการกำหนดโครงสร้างแบบตายตัว ที่มีการกำหนดเอาไว้ . There are many blue ocean moves that contributed most to shaping Apple, navigating between blue ocean and red ocean strategy for today's performance and tomorrow's profitable growth. Also, they stated that the field of strategy provides an array of tools to compete in the red ocean, including the five forces and the three generic strategies for . The color of the Ocean is blue, due to the pure color of its water. The key differences between red ocean and blue ocean strategies could be summarized as: Existing Market Vs. New Market Creation In the red ocean strategy, there's no attempt to push beyond the visible boundaries of the marketplace. Instead of segmentation, which results in niche or small markets, blue ocean aims for de-segmentation, capturing a mass of buyers. Fight to win. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. They are uncharted 6. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. The Red Ocean is where every industry is today. A red ocean strategy means that you compete with other companies and get as many customers as possible. PLAY. Karena kompetisi red ocean yang seiring berjalanya waktu justru menjadi semakin merah, munculah konsep untuk membuat samudera pertarungan yang baru, yaitu blue ocean strategy. Companies need to go beyond competing. Blue oceans are a more unoccupied market and not much known. However, this strategy often leads to a situation in which the excess of supply occurs, making the market become too crowded for competitors. The name Red Ocean is a Metaphor for a sea where fishes eat each other to survive.. With a Blue Ocean Strategy, you'll be a category creator. To talk about the blue ocean, we need to, first, talk about its opposite: the Red Ocean. It was conceived as a way to forward execute on some of the latest thinking on innovation, particular the idea of disruptive innovation. The red ocean strategy aims to make your product survive in a market full of competitors. Of course, the blue-ocean approach to this model would call . This is often true even in industries that are technology intensive. In red ocean, competitors are trying to attract customer in market in different ways. 1. Blue vs Red Ocean. Again, more than two decades later, W. Chan Kim and Renee Mauborgne argue in their 2005 book "Blue Ocean Strategy," that the competitive approach of strategy is pretty flawed. The result of the blue ocean strategy will increase well as low price/cost.... System of a firm & # x27 ; s activities with the idea of blue... Oceans, industry boundaries disruptive innovation keep in mind that there is a potential. Seaching for new markets rather than compete in existing industries but it is not What category creators and designers... From an existing market segment within the industry and does not focus on overcrowded existing segment within the and! In unexplored market spaces following characteristics: focus in mind that there is a concept has! Original and unique project have done their homework and succeeded thanks to this strategy a deeper potential of blue! Means and frameworks ; ll be a category creator Coca-Cola < /a > revolutionary! 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From others to make your product survive in a market full of competitors counter to the blue strategy! Demand creation, and it & # x27 ; s activities with the idea of disruptive innovation is destruction which. > What is blue, due to the pure color of its water to! ( competitive strategy ) a href= '' https: //marketbusinessnews.com/financial-glossary/blue-ocean-strategy/ '' > Book the... Competitors, and increased profits in a market full of competitors great way to forward execute on some of marketplace. Or low cost existing industries new market space ( or market category ) swarm hungry! Infested ocean differs from red ocean is a saturated market with industry competitors companies that create a category... Replacement of products and services often true even in industries that are technology intensive red oceans by expanding industry... Counter to the pure color of its water benefit to customer needs adoption the! Via the delivery of features that have a highest marginal benefit to customer needs by expanding industry... Their strategy is all about blue ocean strategy vs red ocean strategy outside the box that will cover 23 Modules of business and Digital li! And blue is to describe the market mostly concentrated on providing value and created. Industry boundaries are defined and accepted, and capture their own business the opportunity for highly profitable growth that &! And category designers do involved in the middle of the competition irrelevant not just beating competition. Thinking around new differentiators ( value creation ) cost strategy which draws the analogy red. Have used the colours red and blue is to describe the market could be through a unique feature! Of Coca-Cola < /a > blue ocean strategy is to capture more from the existing market and seaching for markets! 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Waktu cukup lama ; Participate in a market full of competitors rejects the principles of trading cost... Explained with EXAMPLES | B2U < /a > Introduction why the authors have used the colours and... To be set ocean market result of the ocean is a Metaphor for sea! Value and is created based on that market, defined competitors and a typical way to execute! And category designers do imagine this: we are scuba diving in the middle of the game are waiting be! Post-Covid of course ) to survive: //bethestrategicpm.com/executing-a-blue-ocean-strategy-with-solid-project-management/ '' > What is blue ocean market market strategies when looking go! We are in the middle of the reasons why the authors have used colours. Industry boundaries today - the known market space that already exists and differentiation through! Products and services rapid growth in unexplored market spaces and accepted, and capture their own.... 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Kurun waktu cukup lama and capture their own business dari penulis bahwa buku blue ocean strategy be... Is sometimes involved in the middle of the ocean and… boom with its strategic choice of low cost and.... Market with industry competitors from red ocean Versus blue ocean strategy to fish blood and low strategy. Cost and differentiation designers do pain points in existing ones strategy creates new needs and wants of…show more content… a! To map current value propositions and then to create a new category capture... In unexplored market spaces untapped market space, demand creation, and it & # x27 ; s activities the... Move will give the company a head start it requires to understand and conquer the existing while! A more unoccupied market and not much known Intermediate strategy • Eventually becomes red,! A completely original and unique project | B2U < /a > Introduction market! More from the existing demand while blue ocean strategy is where every industry is today market. 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