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In a very competitive circus industry, Cirque du Soleil was a blue ocean. However, as market saturation sets in, the red ocean becomes overcrowded. However, innovativeness is not limited to R&D. We will work on your paper until you are completely happy with the result. Operating in a blue ocean is largely non-existent in today’s business environment. The first two items concern revenue and sales. The other is to exploit and defend this market. How to cite this article: Buyer utility – Is there exceptional utility in your idea? Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. What factors does the industry take for granted that should be eliminated? This form of leadership has four processes. W. Chan Kim and Renée Mauborgne are convinced that the Blue Ocean Strategy can break through all existing paradigms and ideas about traditional strategies. What other products or services do customers use to achieve the same goal? The last benefit is the establishment of a sustainable market (Kim & Mauborgne, 2005). This is the best summary of Blue Ocean Strategy I've ever read. It created a new theatrical show that combined the acrobatics with a premium theater experience. You can change your ad preferences anytime. Choosing an ocean other than the Blue Ocean Strategy requires a lot of patience, perseverance, preparation and faith. In 1908, 500 American automakers existed making custom automobiles. Each industry underwent continuous upheaval, each time spurred by a blue ocean strategy that 1) reduced factors unimportant to buyers, 2) increased factors important to buyers, 3) expanded the market. To get a big change, mobilize massive effort. A blue ocean is deep, powerful and large, as is the potential for profit. Summary of Blue Ocean Strategy. Product commoditization sets making the products of competitors largely undifferentiated (Kim & Mauborgne, 2005). Use the above checklist as a guide through the process and hold internal brainstorming sessions for each point. Instead of three rings, their shows feature one stage, reducing the number of performers needed. Retrieved [insert date] from ToolsHero: https://www.toolshero.com/strategy/blue-ocean-strategy/, Add a link to this page on your website: Unlike many conventional approaches to strategy formation, Chan Kim and Mauborgne chose not to focus on the competition, but on the customer. The Blue Ocean Strategy Canvas is part of the same study of W. Chan Kim and Renee Mauborgne. It can be difficult to come up with futuristic ideas and identify colossal and unused markets. It merged the concept of the circus with the theater to provide features of a circus valued by consumers in the comfort and convenience of a theater (Kim & Mauborgne, 2005). Think of characteristics of a certain product that have been designed to beat the competition, but that cost a lot of time and resources. Blue ocean strategy is a new concept but the idea has long existed. Let’s make this clear with an example. The blue ocean strategy is susceptible to sustainable effects, particularly brand building and reinforcement over time. Each paper is composed from scratch, according to your instructions. Production value increased with music, lighting, storylines, and artistry. Legitimate top paying survey, ➢➢➢ https://t.cn/A6ybK1ra, Blue Ocean Strategy - Summary and Examples, No public clipboards found for this slide, Approved Tutor of Edinburgh Business School. Thriving for businesses in the overcrowded and competitive markets requires the adoption of a strategy that does business to stand out from the rest in the crowded markets. What is a blue ocean? Be the first to rate this post. This means selecting either cost leadership or differentiation as a marketing strategy. The renewed importance of this strategy is due to intense competition in the contemporary business environment with firms fiercely competing in highly saturated markets when value innovation can create new markets or opportunity to build new markets. It requires an in-depth understanding of the organisation and industry, as well as consumers’ interests and desires and the direction the market is heading in. (Kim & Mauborgne, 2005) The strategy of business firms is to find ways of outperforming their competitors to gain a bigger share of the market, mostly by shifting demand towards the firms and away from other industry players. In this summary, we’ll give a synopsis of the key concepts, tools and tips from the book. A distinction is made between preliminary and executive principles. There is no gap where plagiarism could squeeze in. Failing the customer value piece is the most obvious failure (if you build something no one wants). Some disadvantages of using a Blue Ocean Strategy are: This strategy targets six principles that can be used in every organization so that they can arrive at a successful development and fulfilment of new markets. This leads to a new concept: value innovation. See our Privacy Policy and User Agreement for details. The book suggests a more targeted method, to focus your limited resources on the areas of greatest disproportionate leverage. For this reason, the term ‘red’ has also been assigned to such an overall strategy. Taking a Blue Ocean approach means your goal isn’t to outperform the competition. A company will have more success, fewer risks, and increased profits in … Which user pain points does the current market not yet address? In order to help entrepreneurs to think innovatively about the products they make in relation to the industry, the same researchers developed the 4 Actions Framework. Blue Ocean Strategy is often compared to Venture strategy. Cirque created a blue ocean by integrating high value and low cost. Instead, your aim is to redraw industry boundaries and operate within that new space, making the competition immaterial. If you liked this article, then please subscribe to our Free Newsletter for the latest posts on models and methods.

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