A good example of Red Ocean Strategy is the European airline operator Ryanair (or Southwest if you like in the US). This article will explain the success factor of this company and what are the factor that outline in Blue Ocean Strategy teaching have been used by this company. The approaches or strategies presented as the red ocean traps are not wrong or bad. It is all about devising and acquiring the uncontested market forum by spawning a new demand. A company will have more success, fewer risks, and increased profits in a blue ocean market. 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).A company will have more success, fewer risks, and increased profits in a blue ocean market. : Beat the competition. 2. The key to a successful blue ocean strategy is finding the right market opportunity and making the competition irrelevant. In short, Red ocean strategy refers to competing for the existing marketplace, where the blue ocean strategy denotes making a new uncontested marketplace. This model is based on actual work that was done with a very well-known consulting company (here, … What outcomes does blue ocean strategy produce? Blue Ocean Strategy vs. This happened, for example, when Apple created its iTunes music download service in 2003. Summary Of The Blue Ocean Strategy 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). It’s possible that after some decades, or years a blue ocean transforms into a red one. Assignment – Blue Red and Purple Ocean Strategy Harshad Koyande M2022090 Operations Paper Boat (Hector Beverages): Paper Boat has disrupted Indian market & became a leading player in non-alcoholic beverage segment. Check out 50 different types of business models, along with examples of companies for better insight. 8 ∗Blue Ocean Strategy is a: ∗Value Innovation Strategy – competes in an uncontested market space ∗“Combination Strategy ”: pursue differentiation while controlling costs. Make the value-cost trade-off vs. break the value cost trade-off. An excellent example of a blue ocean strategy is eBay, which did it with the online auction industry, or Cirque du Soleil with the circus industry. Unfreeze: What Changes, or must be Changed, has to be weakened.. To forge steel, you must make it malleable. In their book, Kim and Mauborgne wrote about 150 blue ocean strategies that have been undertaken by companies over about 100 years. Blue Ocean Strategy. An example of a successful execution of a blue ocean strategy is the iPod. In Red Oceans, industry boundaries are defined and accepted, and the … https://achieveinbusiness.com/what-are-blue-red-ocean-strategies RED OCEAN Prof. W. Chan Kim and Renee Mauborgne in 2005 Competition within market space “Known” market Number of competitors Blue and Red Ocean Strategy Examples. 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. A blue ocean strategy aims to create new demand. Blue Ocean Strategy vs. Red Ocean Strategy. Red Ocean Traps Red ocean theory is effective in fighting market competition, but managers must look for greener pastures (in this case, blue oceans). I have recently been reading up on the rise and huge success of Netflix and how they used the “Blue Ocean Strategy” to change the rules of the game. : Break the value-cost trade-off. The red oceans are contemporary industries where the market players compete and fight against each other like sharks in an ocean, thereby making the water bloody, hence the term Red Ocean . A market-competing strategy divides existing wealth between rival companies. 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. Blue Ocean 4 Actions Framework Template For entrepreneurs, so much comes down to new users—how to attract them, impress them, and convert them to loyal customers. In the process, it will render the competition pointless. Carbon atoms are constantly being cycled through the earth's ocean by a number of physical and biological processes. The book Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne, introduces the term value innovation, focused on making the competition irrelevant through the creation of new leaps in value. READ THE BOOK LISTEN TO THE BOOK 3. Furthermore, this strategy is also targeting a cost cut. Cutthroat competition turns the ocean bloody red. Hence, the term ‘red’ oceans. Blue oceans denote all the industries not in existence today – the unknown market space, unexplored and untainted by competition. Like the ‘blue’ ocean, it is vast, deep and powerful –in terms of opportunity and profitable growth. The concept was invented by W. Chan Kim and Renée Mauborgne in 2004. Beat the competition. Blue oceans always end up being red oceans within short periods and are hard to maintain. iTunes. First of all, there must be a value-driven idea. It has sold over 4 MILLION copies and is being translated in a record-breaking 46 LANGUAGES. Here’s a neat little summary for each strategy: Traditional copy machine manufacturers targeted office purchasing managers, who wanted machines that were large, durable, fast, … Blue ocean firms tend to be innovators of their time. What makes this case so compelling is that it was undertaken in a declining industry. Source The conventional interpretation of the red ocean vs. blue ocean analogy is that: Each industry has its own red ocean and competitors are sharks hunting down fish (market share) — implying there’s blood, hence the “red” ocean. Look at tire dealers who are innovating in the mobile tire installation space, for example. June 10, 2016 by clairesscott. It asserts that for businesses to win in the future, they must stop competing. 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. Creating a Blue Ocean Strategy. Ocean Acidification: A National Strategy to Meet the Challenges of a Changing Ocean reviews the current state of knowledge, explores gaps in understanding, and identifies several key findings. The red ocean strategy tries to make the most of existing demand. Value innovation is uncovered when companies align innovation with utility, price and cost positions. Competing in Existing Market Space Versus Creating New Market Space This comparison allows viewers to see and understand how massive something is. The strategy is specifically a marketing theory and thus, a marketing strategy. 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). Summary Of The Blue Ocean Strategy The blue ocean strategy was developed and implemented using various frameworks to look beyond the competition and reduce risks and hurdles in the newly created market. If we compare companies to fish swimming in a vast ocean, then we can say there are two types of oceans. To put it another way: red oceans offer too much competition & entering the fray means less profit, more work, and a lower chance of succeeding. Apple iTunes is a good example of Apple blue ocean strategy. What is an example of red ocean strategy? The image below explains, as a blue ocean strategy summary, the difference between a red and blue ocean market. What Is The Blue Ocean Strategy. Blue oceans strategy is the approach that suggests a company is better off searching for ways to play in uncontested market places instead of engaging with competition in existing marketing spaces. It is the idea of trying to find market spaces that are free of competitors by creating and caputuring new demand,... The strategy focuses on moving away from an existing market and seaching for new markets. Content and Social Media Value I… As blue research expands with the world increasingly understanding its importance, policy makers and research institutions worldwide concerned with ocean and coastal regions are demanding further and improved analysis of the Blue Economy. Create uncontested market space. For more than ten years, this strategy was conceived and successfully practiced by many companies. : Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost. Last week lesson, we talked about the difference of Red Ocean strategy and Blue Ocean strategy. Scale is when you compare something large to something much smaller. In contrast, blue ocean strategy creates new demand within red ocean market. They also prove that it can be beneficial to undergo red and blue ocean strategies simultaneously. The other classic example from the Blue Ocean Strategy book is the Canadian entertainment group Cirque du Soleil. Blue oceans, where a market space is new and uncontested, and strategy centers around value innovation. A research that gives a detailed scenario about a person, group or event which is done for the enhancement of the writer’s assessment skills in other … 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. Before iTunes, the music industry was losing millions of dollars to illegal downloads … Red ocean is all about competition, companies in Red Ocean have to squeeze profit margin in order to survive in their industries. Most blue oceans are created from within red oceans by expanding existing industry boundaries. A company will have more success, fewer risks, and increased profits in a blue ocean market. Break the value-cost trade-off. For example, Netflix made the strategic move of converting to a streaming service from a DVD sales and rental business. A company will have more success, fewer risks, and increased profits in a blue ocean market. Amazon. Examples of how Blue Ocean Strategy can be used for Uber Disruptive case study. [14] It is a phenomenal success for the companies those who adopt and implement this strategy. The above essay sample mentions the Netflix blue ocean market strategy and red ocean. The Blue Ocean strategy enables companies to search for new areas of business or emerge out of the Red Oceans. A company will have more success, fewer risks, and increased profits in a blue ocean market. We believe that there are many readers would like to know how this concept have been implemented in Malaysia. 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. A company will have more success, fewer risks, and increased profits in a blue ocean market. Based on real-life studies, the book provides insights into business strategies called blue and red oceans. Blue Ocean Strategy in nutshell. The research of W. Chan Kim and Renée Mauborgne focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in … This strategy emphasizes how the company does not win the competition by conducting a head-to-head strategy with competitors. The difference between Blue Ocean Strategy and Red Ocean Strategy Source: launch-marketing.com When it comes to red oceans, industry boundaries have been set, and the rules of the competitive game are well understood. Careful definition and illustrative case studies are fundamental work in developing a Blue Economy. Specifically, these new markets give a company a very high competitive advantage as well as low price/cost pressure. While in the red ocean a lot of businesses sell similar products and try to compete mainly using different pricing strategies, in the blue ocean companies try to create new demand. In their book, Blue Ocean Strategy, W. Chan Kim & Renée Mauborgne created the terms ’red ocean’ and ‘blue ocean’ to present the situation in the market. 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.”