Blue Ocean Strategy: Summary And Analysis Of A Blue Ocean Strategy

1448 Words6 Pages
1. Summary and Analysis :
Nowadays many new companies have emerged in the markets this will cause a lot of conflicts in the crowded marketplace in order to stay in the competition, success and gain profits. The competition is often so severe that some companies cannot sustain themselves and may stop operating. Therefore, W.Chan Kim and Renee Mauborgne whom are professors of strategic management they develop a blue ocean strategy as a new way of thinking to make this competition irrelevant and creating new market space. It is also demonstrates how the companies traditionally work in red ocean conditions where companies are fighting fiercely against each others to gain a share of the market.
So what is Blue Ocean?
W.Chan Kim and Renee Mauborgne
…show more content…
This means that from the value chain the company can evaluate costs and see if it suit their budget or not, so if it above their budget they make adjustment to reduce costs to be more efficient. Also, helps in finding ways to develop company itself (Value Chain Model, 2015). Moreover, some company used Porter's five forces model to assets the attractiveness of the industry, as this will give them clear idea in either continue or stop the business. These five factors are supplier power, buyer power, competitive rivalry, threat of substitution and threat of new entry ("Porter's five forces", n.d.). In addition, in Blue ocean strategy using Porter's five forces is not good tool, while it is good tool for red ocean strategy, because it used for companies that already in market. Competitive advantage means the advantage that any industry has over its rivals that they cannot copy over the time. Therefore, competitive advantage tolerates any company to survive and to flourish against competition. As well as, it helps industries to add more value than their rivals in the same market. Hence, the blue ocean will be the best strategy to use in order to be successful. In terms of Blue Ocean competitive advantage it is used both differentiation and cost advantage, conversely, Red Ocean used one of them either cost or differentiation besides the porters five factors. Managerial actions contain acquisition of other company. As managerial actions for creating a blue ocean it is not vital to make goods and services to the public or inspecting the external imposes. For example, in 2001 Compaq was acquired by Hewlett Packard

More about Blue Ocean Strategy: Summary And Analysis Of A Blue Ocean Strategy

Get Access