What is the Blue Ocean Strategy?

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What is Blue Ocean Strategy?

by

Nattida Sae-Iw

MBA Student

What is Blue Ocean Strategy?

Let’s start with the metaphors

To understand the term of Blue Ocean, imagine a market universe composed of two sorts of oceans: Red Oceans and Blue Oceans.

Red Oceans represent the existing market space which is known market. Companies in red oceans are competitive-base; they are fighting each other and aim to get a bigger market share from their competitors. The world now is globalized, the competitions are fiercer than ever, they are battling on the same demand thus this is bloody competition. That’s why it’s called red oceans.

Blue Oceans are new, defined as unknown
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Creating new demand instead of striving to do better than competitors

2. Looking for non-customers instead of getting a bigger share of customers

3. Challenging assumptions and reconstructing industry

4. Voluntary participating self- initiated teams

5. Executing strategies while conserving time and resources

• Strategies Canvas – Capture both current state and also demand side of alternatives

1. Do dimension on graph: value factors that are important, what your industry focuses on. Graph the company then graph for your own

2. Look at the frameworks

3. Try to answer 4 questions (New value curve) and review what does the industry curve look like? And what does your company’s curve look like? Then apply four actions frameworks to build a winning strategy.

Reduce: Which factors should be reduced well below the industry’s standard?

Eliminate: Which of the factors that the industry takes for granted should be eliminated?

Raise: Which factors should be raised well above the industry’s standard?

Create: Which factors should be created that the industry has never offered?

Blue Ocean is not about taking risk and also not avoiding risk. It’s maximizing opportunities and minimizing risks. Blue Ocean focuses on six different risks that are associated with formulations strategy.

o Search risk – How you come up with the right idea?

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