It is a dangerous bad book because it takes some thinking to figure out why it is bad, despite its success, and despite the fact that its key metaphor of blue ocean vs. It is being published in a recordbreaking 44 languages and is a w. Achieved via the delivery of features that have a highest marginal benefit to customer needs. Chan kim and renee mauborgne in 2005 from harvard business school. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. Type of strategy details 1 red ocean strategy red ocean strategy supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole system of a companys activities with its strategic choice of differentiation or low cost. These strategies are called generic strategies and named as survival or black ocean strategy 4, sustainable or green ocean strategy 5, differentiation or red ocean strategy 6, monopoly or. Jul 28, 2018 blue ocean strategy was coined by professors w. The blue ocean strategy book has been sold over 3,5 million times, was published in 43 languages and is a bestseller across five continents. They represent businesses that may not be around today, or werent around until they came on to the scene. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy is a book published in 2005 and written by w.
For this strategy, the key goals are to beat the competition and exploit existing demand. The research 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 the red ocean. While the book is aimed primarily at large, traditional businesses, our book club members managed to scale some of the advice to fit our needs. In this 5 minute blog, ill tell you what the difference is between a red ocean vs blue ocean and how you can survive a red ocean and swim into a more profitable and audible blue one. How to create uncontested market space and make the competition irrelevant by w. Apr 21, 2009 the red ocean is where every industry is today. Blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. These systems started to gain popularity in the 1970s with consoles that played only pong.
An introduction to blue ocean strategy mba knowledge base. Yet that 14percent generated 38percent of total revenues and 61percent of total profits. To understand red ocean strategy let us begin by defining blue ocean strategy. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to. Download blue ocean strategy pdf including examples. Let us say the market that we operate is an ocean cle. They are the authors of blue ocean strategy, which has sold over 3. Innovation, new market space and creating demand are central characteristics. Executing a blue ocean strategy in the following chapter i will explain the concepts that have been used. Blue ocean strategy chapter 14 the four action framework chapter two. In this article you will learn how to make your competition irrelevant and have sales and profit. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. These strategies are used in organizations by top level executive managers for long term organizational sustainability and to face or deviate from the competition.
Blue ocean strategy including examples and pdf download. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy. Chan kim and renee mauborgne in their book blue ocean strategy. Chan kim and renee mauborgne, professors at insead. Furthermore the blue ocean strategy was awarded with. Although there is an inevitability to having to compete in crowded markets, there are too many advantages to avoiding this situation to ignore the possibility of looking for blue space. A red ocean is a metaphor for a market full of competitors. But its not always clear how to create a blue ocean strategy for yourself. Blue ocean strategy is a bad book, but it is not your usual bad book. All in all, blue ocean strategy is a book worth reading. Alltoooften, educators are slow to adopt new ideas from business and apply them to academia but here is one story we especially would like to share with you. Companies should instead look for new market space and ways to reinvent the industry.
An analytical study of red ocean and blue ocean strategy. It is either when businesses enter an oversaturated marketplace, or they simply defend. Value innovation strategy competes in an uncontested market space. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. The researchers called this the red ocean, analogous to a shark infested ocean where the sharks are fighting each other for the same prey. The fundamental premise is that most companies fight competitors headtohead in the same space, chasing the same customers with very similar products, creating a bloody red ocean in their feeding frenzy. Successful trailblazing organizations will attract competition, creating a red ocean. The following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy. You may or may not agree with the central philosophy, but you will be inspired. The majority of businesses practice some form of the red ocean strategy.
The researchers called this the red ocean, analogous to a shark infested ocean where. Blue ocean strategy can be found on amazon blue ocean strategy. Back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. The thesis goal is to present the red and blue ocean strategies and give an answer to weather innovation as a tool of blue ocean strategy can help the companies to exit the current.
There is a defined market, defined competitors and a typical way to run a business in any specific industry. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy, expanded edition. 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 best example of blue ocean strategy that i know of is that of apple launching the iphone. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. As market structure is changed by breaking the valuecost tradeoff, so are the rules of the game. Surface 3 and apple watch red oceans v blue oceans strategy.
Red ocean strategy blue ocean strategy compete in exiting market space create uncontested market. Red ocean strategy blue ocean strategy compete in exiting market space create uncontested market space beat the competition make the competition irrelevant exploit exiting demand create and capture new demand make the value cost trade off break the value cost trade off align the whole system of a firms. Chapter 1 summary this is the first chapter of blue ocean strategy. To join the free indie business book club, click here. How to create uncontested market space and the make competition irrelevant 2005.
It is being published in a recordbreaking 44 languages and is a bestseller across five. Various types of strategies are used in strategic management such as red ocean strategy, blue ocean strategy, green ocean strategy, purple ocean strategy and black ocean strategy. Sep 26, 2016 the strategy canvas provides a highly visual tool to help look at future options. The concept of ideal strategy and its realization using white. Let me try to explain this in simple terms for the benefit of everyone. The following project is a part of our master thesis that we will present for the university of piraeus for the mbatqm master department. Red oceans represents all the industries in existence read little women online pdf today. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to. How to create uncontested market space and make the competition irrelevant, a book by professors w.
Chan kim and renee mauborgne 2006 blue ocean strategy has been described as a must read for all business students. They research for around over 20 years and sum up a theory of blue ocean. Compete in existing market space create uncontested market space beat the competition make the competition irrelevant exploit existing demand create and capture new demand make the valuecost tradeoff break the valuecost tradeoff align the whole system of a firms activities with its strategic choice of differentiation or low cost. The blue ocean strategy book defines red oceans as those which already contain a high level of competition. Blue ocean strategy and blue ocean shift, created by worldrenowned professors chan kim and renee mauborgne, is a new way of thinking, a movement away from a.
Jun 02, 2016 blue ocean vs red ocean strategies 6 major differences red bull case study published on june 2, 2016 june 2, 2016 92 likes 5 comments. Chan kim is the codirector of the insead blue ocean strategy institute and a chair professor of. The book titled blue ocean strategy is not helpful to management dont buy it and if you. The premise of the book is that companies can succeed by creating. The seminal book blue ocean strategy has sold over 3.
Red ocean strategy pdf download download the blue ocean strategy summary pdf. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy, now updated with fresh content from the authors, argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to bring the blue. Oct 05, 2007 blue ocean strategy executive summary 1.
Profitworks is a company built on the values of integrity, hard work, doing things better than they have ever. The fundamental premise is that most companies fight competitors headtohead in the same space, chasing the same customers with very similar products, creating a bloodyred ocean in their feeding frenzy. A lot has been written about it and i would have said practically everything had been said about it until i looked up the book on amazon to see the current price. Blue ocean vs red ocean strategies 6 major differences red bull case study published on june 2, 2016 june 2, 2016 92 likes 5 comments. This book brings the best of those articles together all in one place.
Only then can companies step up to the challenge of creating blue oceans in a smart and. Blue ocean streagety chapter 1 chapter1summary this is. Red ocean strategy is a strategy which aims to fight and thrash the competition. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price. Blue ocean vs red ocean strategies 6 major differences. It is worth noting the organizations will move between blue oceans and red oceans over time. Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Tools and frameworks for creating and capturing blue oceans it is constructed to create a new value curve and when you apply the four actions framework to the strategy canvas of your industry, you get a. Michel porter supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole. Sep 24, 2017 blue ocean strategy requires a different mindset. Chan kim and renee mauborgne have created a comprehensive set of analytic tools and frameworks to create blue oceans of new market space. Over 4 million copies sold wall street journal and businessweek bestseller recognized as one of the most iconic and impactful strategy books ever written the global phenomenon that has sold over 4 million copies, is published in a recordbreaking 46 languages and is a bestseller across five continentsnow updated and expanded with new content.
Before apple launched the iphone there were a number of analysts who predicted apples imminent failure in the handset market, after all, competing with phone manufacturers was not like competing with pc manufacturers handset manufacturers were much more dynamic. History and background a video game console is just a computer that is made only. Reviewing the blue ocean strategy universiteit twente. How to create uncontested market space and make the competition irrelevant, a. Chan kim and renee mauborgne, published by harvard business school press, boston, massachusetts, 2005, isbn 97815996192. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Blue ocean strategy is a powerful framework for finding new business opportunities. A red ocean strategy involves competing in industries that are currently in existence. Its clear, therefore, that companies which attempt to follow a blue ocean strategy have a much greater chance of success than those which follow a metoo strategy.
Based on a study of 150 strategic moves spanning more than 100 years. The risks of following a blue ocean strategy the adaptive. By deviating from typical value curves, a blue ocean strategy doesnt make sense. In a red ocean environment the market becomes more fierce and crowded as.
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. Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. There is ample opportunity for growth that is both profitable and rapid. In red ocean companies try to surpass their rivals to take hold of a greater share of existing demand. May 30, 2017 to join the free indie business book club, click here. A strong blue ocean strategy is difficult for other companies to imitate and execute well. Red ocean strategy supports to compete in existing market space, beat the competition, exploit existing demand, make the valuecost tradeoff, align the whole system of a companys activities with its strategic choice of differentiation or low cost porter m. As we begin our dive into the blue ocean strategy, it is important to understand what most businesses do, and why it doesnt work. How to create uncontested market space and make the competition irrelevant, w.
Chan kim and renee mauborgne in the indie business book club. Chan kim and renee mauborgne are professors of strategy at insead and codirectors of the insead blue ocean strategy institute. Blue ocean strategy is a theory explained in a 2005 book by w. Mar 10, 2015 back in 2008, i wrote a paper on blue ocean strategy which was published at the international conference on management. Discussion blue ocean strategy versus red ocean strategy every blue ocean company would ultimately reach to the level of red ocean category as.
This blog article is a overview of some of the key points of the book by w. Red ocean in blue oceans, demand is created rather than fought over. Blue ocean strategy chan kim and renee mauborgne was released in 2005 by harvard business school press. The following behaviors are amplified by blue ocean strategies that deviate from the status quo. Blue ocean strategy is where a company creates a completely new market space or market category. The database and research have continued to expand. His book blue ocean strategy, coauthored with renee mauborgne, has sold 3. The strategy canvas provides a highly visual tool to help look at future options. As we see more and more businesses using blue ocean strategies to adapt to changing times, some innovators and trailblazers in education are seeing the light as well.