WHAT IS BLUE OCEAN STRATEGY?
Blue ocean strategy is a business concept that was developed by W. Chan Kim and Renée Mauborgne in their book "Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant." The concept is based on the idea that companies can achieve growth and success by creating "blue oceans" of untapped market space, rather than competing in crowded "red oceans" where competition is intense.
According to the authors, companies can create blue oceans by:
Identifying and focusing on unmet customer needs, rather than simply trying to outdo competitors.
Creating new demand in the market by offering innovative products or services that are distinct from those of competitors.
Using value innovation to create a value proposition that is both differentiated and low-cost.
Redefining industry boundaries and creating new market segments.
Blue ocean strategy encourages companies to think creatively and look for opportunities beyond their current markets, rather than simply focusing on competing within existing markets. The goal is to create a new market space that is uncontested by competitors, which allows the company to capture a greater share of the market and achieve higher profits.
Blue ocean strategy has been applied by companies in various industries and has been cited as a successful approach to business growth and innovation.
A red ocean is a market that is crowded with competitors, where it is difficult for businesses to differentiate themselves and achieve growth. The term "red ocean" was coined by W. Chan Kim and Renée Mauborgne in their book "Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant."
In a red ocean market, businesses are vying for a limited pool of customers and are often forced to compete on price, quality, and other traditional factors. As a result, competition is often intense and profits can be low.
In contrast, a blue ocean is a market that is untapped or undiscovered, where there is a lack of competition and significant growth potential. Blue oceans offer opportunities for businesses to differentiate themselves and create new demand in the market by offering innovative products or services.
According to Kim and Mauborgne, companies can achieve greater success and growth by looking for opportunities in blue oceans, rather than simply competing in crowded red oceans. This requires a shift in mindset, as it involves looking beyond traditional industry boundaries and focusing on meeting unmet customer needs.