Analysis: Red And Blue Ocean Strategy

To me personally, value is when something is worth the money to me or holds extreme value. If I feel like it is not worth whatever the price tag is in the long run it is not worth it and I will not get it. Also when I have had an item for awhile it can often increase in value because it not only is the item itself, but it holds all of the memories from the past times I’ve used or worn the item.

Blue Ocean Strategy has been developed by Chan Kim and Renee Mauborgne’s in 2005 and became the most known strategy in worldwide. This strategy recommends that companies should stop to compete in existing market ( red ocean), should try to create new market (blue ocean) where there are no exist competitors yet.

The Value that the company can fix on a product, based on the customer expectation on the product. i.e.

In developing an effective value strategy, a company should identify the values they can deliver to meet customer expectation. Building on past work on the theory and concepts of customer value creation, Smith & Colgate (2007) came up with a customer value framework that identifies four main types of values that are delivered by firms and organization to their customers which are functional value, experiential value, symbolic value and cost value. The

Value creation is creating value for the customer. Being able to solve or meet the customer requirements. Value is created whenever an action is taken for which the benefit exceeds the cost.

Blue Ocean Strategy Paper Establishments are not eternally remaining on the market in a productive way. It is normal to find industries that make wise decisions, but there is also the possibility that the decisions taken have not been the best. The mission as marketing managers is to discover the wise decision that would mark not only within the industry, but also in the market with the purpose of repeating that decision in a clever and a systematic way. Redbox creates their new brainchild in 2002 McDonald's Ventures, LLC. The original idea was that two important services were combined in the movie rental

Value is a subjective domain. What is insignificant to one is priceless to another. In that subjectivity, one tends to measure value in cost- what would you give for this? Some things come cheap, a minute of your day, a dollar of your savings. Others demand more, a piece of your soul, your mortal life altogether.

Value creation means increase the value of products, service and even business to meet the customers’ needs and requirements so that they can get competitive advantages. (Business Fundas, 2012) As we analyzed, fast food industry’s threat of new entrants is low and the availability of substitutes is high. It’s a fare market which the buyers have strong powers.

W. Chan Kim (chan.kim@insead.edu) is the Boston Consulting Group Bruce D. Henderson Chair Professor of Strategy and International Management at Insead in Fontainebleau, France. Renée Mauborgne (renee.mauborgne@ insead.edu) is the Insead Distinguished Fellow and a professor of strategy and management at Insead. This article is adapted from their forthcoming book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant (Harvard Business School Press, 2005).

1. Jet Blue´s Business- level strategy; value and cost drivers Jet Blue uses to create and maintain ist competitive position

This is done by creating a leap in value both for the buyers as well as for the organization thereby creating a new and uncontested market space. Companies left out in the red ocean usually follow a conventional approach, running to beat competition by creating a defensible position in the current market space order.

This strategy seem challenging since this strategy focus on capture new market and new demand, which it’s required extra efforts in term of innovation of products and promotion in order to make customers realize about their product. Even there are some discussions about the blue ocean strategies; however, based on my review on customers comment said that the practical guidance on how to create them is limited. Therefore, without usual analytic framework which can be used as guidelines to create blue oceans as well as effective principles to manage risk, creating blue oceans viewed as too risky for managers to pursue as strategy for their company.

Value proposition is basically a promise of a value that is going to be delivered. In other words it can be said that value proposition is a statement that suggests the value is going to be delivered in accordance to the desires of the customers (Osterwalder et al. 2015).

A company 's values are the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company 's business and pursuing its strategic vision and strategy.

There are some tool produce to help implement blue ocean strategy. The Eliminate-Reduce-Raise-Create (ERRC) Grid is the matrix that help execute blue ocean strategy with the four action framework: eliminating, reducing, aising and creating. ERRC Grid help company to remain on their competitive factors. Eliminating and reduce the factor that the transitional industry take it for granted can help the new strategy to remain unique from the transitional market. Nevertheless, raising and creating some unique competitive factor the transitional market never or seldom offered that is above the industry standard. With all these “Four Actions Framework” the company can escape the transitional red ocean market by activate a new blue ocean market and create a new value curve. (Kim & Mauborgne, 2005)