distinguish between red ocean and blue ocean strategy

distinguish between red ocean and blue ocean strategy

How many pages is Blue Ocean Strategy? In short, Red ocean strategy refers to competing for the existing marketplace, where the blue ocean strategy denotes making a new uncontested marketplace. Porter's strategy model seems to focus more on what makes an organization competitive in existing (red . In the current business environment , Red Ocean is often defined as a competitive environment where industry boundaries are clearly defined, and existing and new . Kim & Mauborgne (2005), advocate employing the use of specific tools and frameworks when implementing the blue ocean reconstructist strategy. Red Ocean and Blue Ocean Strategies Comparison Table. The goal is to better understand the underlying dynamic strategies in the form of interactions between theory and management practices. Blue oceans are a more unoccupied market and not much known. To understand the difference between Red and Blue Oceans we need to swap our tranquil, sheep-filled pastures for the rougher seas of the ocean. Creating blue oceans is non-zero-sum with high payoff possibilities. In the blue ocean strategy, a new product or service is created . Red Ocean and Blue Ocean Strategy - OneCab Perth Blue Ocean Strategy Markets or "blue oceans" are created by value innovation and at the same time driving down costs. Products under the concept of the Blue Ocean Strategy doesn't make a consumer choose between value and affordability. Apple iTunes is a good example of Apple blue ocean strategy. Blue Ocean Strategy: Explanation and Examples Businesses compete in various markets. The color of the Ocean is blue, due to the pure color of its water. But they certainly created one in the first place. Blue ocean strategy helps to the Apple company to develop their own market rather than trying to beat competitors to reach top in the market. In 1893, the Duryea brothers created the first automobile. Focus on Current Customers vs. Focus on New Customers. Difference Between Red Ocean and Blue Ocean Strategy Difference Between Red Ocean and Blue Ocean Strategy 1. Blue Ocean Strategy - Difference between Blue & Red Ocean Strategies. Red Ocean Strategy Advantages and Disadvantages Difference Between Market Penetration and Market ... The key difference between market penetration and market developments is that market penetration is a strategy in which the company sells . Red Ocean marketing focuses on competition in the existing market space by directly competing with others. The effects from current competitors are low in this approach, thus is called a 'blue ocean strategy'. Usually that means it can be hard to differentiate your products/services. 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. BEAT COMPETITION VS. Of course, the blue-ocean approach to this model would call . What is a blue ocean product? Thus, they focus on the current customer to make a benefit by selling products and services. The analogy with the natural environment demonstrates the characteristics of contrasting market environments. A balanced portfolio where the red ocean cash-generating portion is still intact but balanced with blue ocean/reconstructionist strategy is in fact the most effective strategy. Of the many strategic planning models that exist, the Blue Ocean Strategy could be considered the pacifist of the group. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. The name Red Ocean is a Metaphor for a sea where fishes eat each other to survive.. Red Ocean Vs Blue Ocean Strategy \ What is the difference between Blue Ocean Strategy and Red Ocean Strategy? Red Ocean Versus Blue Ocean Strategy Create uncontested market space Align the whole system of a . It is the simultaneous pursual of differentiation and low-cost theorem. Align the whole system of a firm's activities in pursuit of differentiation AND low cost. For example, Airbnb didn't buy homes or hotels. In blue oceans, demand is created rather than . A Blue Ocean Strategy is the name of the optimal Strategy to follow in New Markets.. 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. Despite being unreliable, they cost $1,500, twice the average annual income. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. What is the difference between red ocean and blue ocean strategy? Market Development Strategies . Also, as there is no competition, there is no pricing pressure because of lack of competition in the market. The Blue Ocean framework (developed by W. Chan Kim and Renée Mauborgne) is a powerful tool to identify marketspaces that are uncontested. In contrast, those who pursue a blue ocean strategy attempt to achieve both: differentiation and a low cost, opening up a new market space. To get a clear picture of the existing situation of the operation. Of course any strategy will always involve risks - be it red or blue. Create and capture new demand. Thus, they focus on the current customer to make a benefit by . Blue Ocean Strategy. The concept was invented by W. Chan Kim and Renée Mauborgne in 2004. The Red Ocean The red ocean represents all known industries competing today in what is the "known market space" with red ocean companies take the conventional approach of beating their . Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. In a way, the Blue Ocean Strategy is the opposite of the Red Ocean Strategy. Like the 'blue' ocean, it is vast, deep and powerful -in terms of opportunity and profitable growth. The color of the Ocean is red, due to fish blood. Unlike blue ocean strategy, innovation is a very broad concept that is based on an original and useful idea regardless of whether that idea is linked to a leap in value that can appeal to the . The Blue Ocean Strategy books a nd website articulate these differences, and provide practical tools and insights for pursuing Blue Ocean Strategy. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. This assumption based on what the academics call the structuralist view, or environmental determinism. And the cost-value trade-off is broken. Market is overcrowded hence profit and growth are limited due to strong competition. Difference Between Red Ocean and Blue Ocean Strategy. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. It's centered on creating demand that doesn't exist yet, rather than competing for it with . In a red ocean there is blood in the water as firms are constantly fighting a. However, blue ocean strategy provides a robust mechanism to mitigate risks and increase the odds of success. The strategy is specifically a marketing theory and thus, a marketing strategy. Competition- based red ocean strategy presumes that an industry's structural conditions are given and that firms are forced to compete within it. In a nutshell, the main difference between a blue ocean strategy and a red ocean strategy is how crowded is the space you are competing in? The red and blue ocean strategy theory argues that the business world consists of TWO distinct spaces, described as the metaphor of red and blue oceans. 6. The blue ocean is the name for a newly discovered or created business, while the red ocean indicates an already existing industry. Defining Blue Ocean Strategy: Red Ocean Versus Blue Ocean. With a focus of not just beating your competition but making them irrelevant, Blue Ocean strategy is all about thinking outside the box. A blue ocean strategy is based on creating demand that is not currently in existence, rather than fighting over it with other companies. First, the competitive-based strategy focuses on competing in the existing market space. 47, NO. This means that your company is unique from others. Starbucks does this by offer delicious and one of a kind coffee recipes, and a unique atmosphere to enjoy them in. As a result of the difference in market dynamics between Red Ocean and Blue Ocean strategy, the two approaches have differing requirements for leadership, management, and organization development. The main difference between the two strategies is the competition for the marketplace and/or share. To understand red ocean strategy let us begin by defining blue ocean strategy. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers. Red is the color of blood and in the case of marketing red ocean strategy refers to that strategy where companies try to give wounds and indulge in a bloody competition where real blood does not come but competitors try to take each other's market share by indulging in price war apart from other aggressive marketing tactics. 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. - The purpose with this article is to analyze the "Blue Ocean" phenomenon in depth. Red Ocean Vs Blue Ocean Strategy \ What is the difference between Blue Ocean Strategy and Red Ocean Strategy? A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. 1. DISADVANTAGES • Intermediate strategy • Eventually becomes red ocean • If frameworks are not properly executed, it promote market complacency. The name Blue Ocean is a Metaphor for a sea where fishes don't need to eat each other to survive.. The terms blue and red oceans were introduced by W. Chan Kim and Renée Mauborgne in their book Blue Ocean Strategy. Most blue oceans are created from within red oceans by expanding existing industry boundaries. The concept was invented by W. Chan Kim and Renée Mauborgne in 2004. Authors believe that the red ocean stands for a market that is overwhelmed with competitors, and the blue ocean represents an unknown market without rivals. You should now understand the difference between Red Ocean and Blue Ocean thinking. A key framework here is the Blue Ocean Idea Index. Red Ocean looks at cost saving or differentiation while Blue Ocean focuses on doing both. 3 SPRING 2005 Blue Ocean Strategy: From Theory to Practice strategy is essentially a choice between differentiation and low cost.13 In the reconstructionist world, however, the strategic aim is to create new rules of the game by breaking the existing value/cost trade-off and thereby . They thus became a publicly maligned symbol of excess. One way to look at it is as in an ocean. Each table is created as PowerPoint tables, and are 100% Editable. To explain further, W. Chan Kim and Renée Mauborgne introduced the difference between a red ocean and a blue ocean, both of . Red Ocean are existing markets, known places, oversaturated, having fierce competition, running for survival, and saving existences from big fish. To choose the appropriate platform to initiate and develop the perfect Blue Ocean team for the idea. 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 . Blue Ocean Strategy. 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. Create uncontested market space. Blue Ocean Strategy Blue ocean strategy is a strategic move that organizations or individuals use to create new product or ideas. These strategies are used in organizations by top level executive managers for long term organizational sustainability and to face or deviate from the competition. 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. . Answer (1 of 10): In this seminal work Blue Ocean Strategy, the authors define a blue ocean (a completely new market) and contrast that with a red ocean (competition in an existing space). The Blue Ocean Idea Index lets you test the Name: Austria, Clarence jay D. Score: Section: BSIT Block C Date: 1. Closing the Gap Between Blue Ocean Strategy and Execution. BLUE OCEAN STRATEGY Red Ocean Strategy Blue Ocean Strategy Virgin Cola Red Bull Competed vs. Coke and Pepsi with Niche product . Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Cutthroat competition turns the ocean bloody red. 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