How is blue ocean strategy different from a classic differentiation strategy. 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. Red ocean markets are large and the rate of product innovation is low. Pepsico five forces analysis porters model panmore institute. Chan kim and renee 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 the red ocean. This blog article takes a look at what kind of roi some companies have achieved by implementing a blue ocean strategy by w. Another aspect of gillettes excellent brand management is its blue ocean strategy extending its brand to women. Jun 02, 2016 blue ocean vs red ocean strategies 6 major differences red bull case study. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades.
First, achieving growth through mergers and acquisitions. Over the last several decades, product development efforts have seen unacceptably high new. The risks of following a blue ocean strategy the adaptive. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world.
Pricing strategy is mainly aimed at driving customer loyalty by keeping the products average priced and accessible for a larger customer segment without creating an impression of lowquality products. Blue ocean studio you can access a free trial here. Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. This makes a clear relationship between marketing plan and business strategy, where business strategy plays the role of guiding arrows wison, gilligan, 1999. The competitive one that dominates existing markets or the innovative strategy that looks for opportunities to create new markets. Blue ocean strategy and sustainability for strategic management. Summary of blue ocean strategy download ebook pdf, epub. Blue oceans are about exploring noncustomers and creating new. Lets focus on two of the businessworlds trending marketing strategies for electronic market space today blue ocean vs. Implementing the blue ocean strategy is, simply put, a gargantuan task. How to create uncontested market space and make competition irrelevant by w. Blue ocean strategy is a landmark idea founded by w.
Blue ocean vs red ocean strategies 6 major differences. 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. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. Pepsico mission statement has been worded by ceo indra nooyi as performance with purpose and this principle is closely integrated with the strategic direction chosen for the company. This post defines blue ocean strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Pdf harvard business school press blue ocean strategy. In a few cases, companies can give rise to completely new industries, as ebay did with the online auction industry. There is ample opportunity for growth tbat is both profitable and rapid. The insead blue ocean strategy institute is dedicated to extending the research on blue ocean shift, blue ocean strategy, and blue ocean leadership by chan kim and renee mauborgne and disseminating it to professors, researchers and practitioners around the globe.
Learn the concepts of tipping point leadership and fair process that ensure effective execution of blue ocean strategy. In addition, blue ocean strategy is a source of inspiration. Eight key points of blue ocean strategy heres the essence of blue ocean strategy captured in eight key points. Companies pursue blue ocean strategies to make competition irrelevant. How to create uncontested market space and make the competition irrelevant, a book by professors w. Five steps to making a blue ocean shift blue ocean shift. Chan kim pdf download exploring strategy 11th edition pdf free download building on the blockchain.
Stay up to date with the latest products, promotions, news and more at. The most appropriate unit of analysis is the strategic move, the set of managerial actions and decisions involved in making a major marketcreating business offering. Innovation, new market space and creating demand are central characteristics. Pepsicos generic and intensive growth strategies panmore. How to create uncontested market space and make the. It requires the right research, patience and focus. Blue ocean strategy paper adel erolsky university of phoenix mkt421 ron rosalik august 25, 2014 blue ocean strategy paper in todays business world, competition is a big concern for nearly every corporation the competition on the market is getting stronger and more difficult to overcome, in many situations corporations terminate. The concept of blue ocean is based on the idea that the business universe is made up. Ko advantages cocacola pursues a differentiation strategy, and has built its company around the pursuit of this strategy.
Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level. Click the link above to read the key concepts and everything you want to know about the blue ocean strategy. This 2005 book is aimed at anyone interested in pursuing the authors blue ocean. How to create uncontested market space and make the competition irrelevant by w. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure.
Achieved via the delivery of features that have a highest marginal benefit to customer needs. Want more secrets and tricks like the blue ocean strategy. The strategies of blue ocean helps to the companies understand, formulate and execute blue ocean strategy for making the competition irrelevant. Studied 150 strategic moves spanning more than 100 years and 30 industries blue ocean strategy is the simultaneous pursuit of low cost and differentiation aim is not to outperform the competition but to make it irrelevant. There are industry leaders in place such as coke and pepsi, and there are. A porters five forces analysis of pepsico shows that the business is under the major influences of competitors, consumers, and substitutes. A business strategy, in most cases, doesnt follow a linear path, and execution will help shape it along the way. What is distinctive about blue ocean strategy as a theory. Be sure to check out our book for detailed guidance on how to implement each step and use the tools, including what works and what doesnt, so you can achieve success. But in most cases, a blue ocean is created from within a red ocean when a company. Blue ocean strategy can be applied across sectors or businesses.
Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Blue ocean strategy promises to change the destructive cycle of market crowding. Blue ocean strategy powerpoint templates present better. Blue ocean strategy ends with ten cognitive traps that can deter you from creating blue oceans or that jeopardize your execution. Blue ocean strategy for marketing, as against the red ocean strategy where rivals fighting.
Blue ocean strategy is innovative, and it creates a new market instead of fitting into the current market. The blue ocean strategy is a business book that has become mandatory for modern managers by proposing an organized structure to identify and implement differentiation in any industry and help you grow your business faster. Blue ocean strategy paper ingrid dillard mkt421 december 22 2014 dianna iobst blue ocean strategy paper blue ocean strategy is an opportunity to create new and unique ways in an uncontested market space this important strategy focuses on making competition irrelevant through creating a new innovative product or service. They represent businesses that may not be around today, or werent around until they came on to the scene. A business strategy is a deliberate plan that helps a business to achieve a longterm vision and mission by drafting a business model to execute that business strategy. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. Blue ocean vs red ocean strategies 6 major differences red bull case study. Library of congress cataloginginpublication data kim, w. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. The idea in brief the best way to drive profitable growth.
The most prominent aspects of pepsico business strategy are based on the following six principles. Muscle building healthy lifestyle directed to athletes 1 2 1 drinkameal. Blue ocean strategy is a proven system for breaking out of strong bloody competition and creating new uncontested market spaces for achieving profitable growth. The more competitors that jump into the market, the more they validate the category. A new framework of blue ocean strategy for innovation. Chan kim and renee mauborgne written by the business worlds new gurus, blue ocean strategy. Red oceans represent all the industries in existence todaythe known market space. In executing a blue ocean strategy, how can a company overcome various organizational hurdles and build trust and commitment among people who work for or with the company.
Sep 24, 2017 blue ocean strategy requires a different mindset. Blue ocean strategy mcc group a protein drinks goactive promotes. Coke and pepsi strive to steal market share from one another in the same. There have been research on the relationship of these business strategies with innovation performance. Using blue ocean strategy to reduce new product failure. The idea behind the book is the advantages of the blue ocean strategy over the red ocean strategy. Demand nasdaq 100 nasdaq trading hours secrets to trading nasdaq the complete chess strategy by sillman free pef download blue ocean strategy book by w. The strategy can transform a current product or idea or create something total new. In red oceans, industry boundaries are defined and accepted, and the. The blue ocean strategy represents the way in which to open up an untapped market space and create demand and growth opportunities kim and mauborgne, 2004. What is blue ocean strategy about blue ocean strategy. A red ocean strategy involves competing in industries that are.
Their vision led to what quickly became one of the worlds leading food and beverage companies. But many companies have done their homework and succeeded thanks to this strategy. A 1950s steel sign for pepsicola in huntsville, alabama. This blog article is a overview of some of the key points of the book by w. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Blue ocean strategy blue ocean strategy is a strategic move that organizations or individuals use to create new product or ideas. Therefore the market is usually heavily populated by competition and there are a set of rules that is known. Blue ocean strategy displays an orderly way to deal with making the challenge unessential and traces standards and instruments any organization can use to make and catch their blue seas. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. Blue ocean strategies on february 12, 2020 blog, b2b strategy and messaging, virtual vp of marketing it can be difficult to succeed with the cutthroat competition in the business environment today.
When we think of competition between companies like coke and pepsi or walmart and costco, we think of competitors fighting to get the biggest share of. Blue ocean strategy including examples and pdf download. Obviously, one challenge of blue ocean strategy is finding that blue. Theeffect of blue ocean strategyon increasing competitive. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. We will introduce the aspects of red ocean strategies that most of the companies use around the world, and then we will compare the advantages and disadvantages of using blue ocean. Blue ocean strategy is a book published in 2005 and written by w. 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. Pdf harvard business school press blue ocean strategy rajeh.
Chan kim and renee mauborgne in their bestselling book of the same name. Pepsicos intensive growth strategies enable the company to effectively use its generic strategy to maintain strong competitive advantage. Chan kim and renee mauborgne in the indie business book club. Value innovation strategy competes in an uncontested market space. How to create uncontested market space and make the competition irrelevant pdf by w. Blue ocean strategy ist eine methode zur entwicklung dauerhaft profitabler geschaftsmodelle aus dem bereich des strategischen managements. Plotting your buyer utility map amazon web services. Blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing costs.
Certainly blue ocean strategy is another way of saying create a new category you can be first in. This short summary is a snapshot of the five steps to making a blue ocean shift. Most prominently, since 2009 the malaysian government has. Pepsicos success is an indicator of the appropriateness of these strategic directions, especially how the generic strategy supports competitiveness.
Ko advantages cocacola pursues a differentiation strategy, essay. Click download or read online button to get summary of blue ocean strategy book now. However, the lack of competition is not necessarily advantageous for the first company to launch a new brand in a new category. Beyond competing proven steps to inspire confidence and seize new growth. 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.
Blue ocean strategy although economic conditions indicate the rising imperative of blue oceans, there is a general belief that the odds of success are lower when companies venture beyond existing industry space. Furthermore the blue ocean strategy was awarded with. In doing so, they have created a huge new potential market for themselves 50% of the population that was out of bounds for them as long as they were dealing with men alone. 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. This course introduces the key concepts, frameworks and tools of blue ocean strategy and lays out the fundamental methodology and process for creating and capturing blue oceans. Coke and pepsi in 2010 case examines the industry structure and competitive strategy of cocacola and pepsi. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. This framework addresses not only the analytic aspects behind the creation of blue ocean strategy but also the allimportant human aspects of how to bring an organization and its people on this journey with a willingness to execute these ideas in.
Blue ocean strategy is a strategy that advice companies to. May 30, 2017 t his month, we read blue ocean strategy by w. Red bull blue ocean strategy presentation explores red bulls strategic. Cocacola 2008 the ad tag line of sprite, yeh hai hindustan meri jaan a coke brand, was a take off on. Pdf blue ocean strategy download full pdf book download. Since there are different kinds of business strategies, three of them are more popular, cost leadership, differentiation and focus. When we think of competition between companies like coke and pepsi or walmart and costco, we think of competitors fighting to. In 1965, donald kendall, the ceo of pepsi cola, and herman lay, the ceo of fritolay, recognized what they called a marriage made in heaven, a single company delivering perfectlysalty snacks served alongside the best cola on earth. Pepsico business strategy and competitive advantage. Canon copier industry case study blue ocean strategy example. The blue ocean strategy explains how to guide your business across seas with less competition and greater profitability. In 1965, donald kendall, the ceo of pepsicola, and herman lay, the ceo of fritolay, recognized what they called a marriage made in heaven, a single company delivering perfectlysalty snacks served alongside the best cola on earth.
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