Blue Ocean Strategy

3258 Words14 Pages
University of the Cordilleras Graduate School The Blue Ocean Strategy In Partial Fulfilment of the Requirement In Globalized Marketing By: Josiah De Leon Leslie Doctolero Warlyn Dumo Jackie Esperon Irish Taynan BLUE OCEAN VERSUS RED OCEAN STRATEGY Blue ocean strategy * Is a book published in 2005 and written by W. Chan Kim and Renee Mauborgne. * Based on 150 strategic moves spanning more than 130, they argue that companies can succeed not by battling competitors, but rather by creating “blue oceans” of uncontested markets. RED OCEANS 1. Compete in existing market space – Red oceans represent all the industries in existence today – the known market space. In the red oceans, industry boundaries are defined and accepted. It is also called traditional competition-based strategies. The authors argue that competition based strategies assume that an industry’s structural conditions are given and that firms are forced to compete within them. 2. Beat the competition – The competitive rules of the game are known. Here, companies try to outperform their rivals to grab a greater share of product or service demand. The authors argue that while traditional competition based strategies are necessary, they are not sufficient to sustain high performance. Companies need to go beyond competing. 3. Exploit existing demand – The supply side of the competition becomes the defining variable of the strategy. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities or niche, and cutthroat competition turns the ocean bloody, hence the term red oceans. Firms principally seek to capture and redistribute wealth instead of creating wealth. They focus on dividing up the red ocean, where growth is increasingly limited. 4. Make the value-cost-trade-off – To sustain themselves in the marketplace, practitioners of

More about Blue Ocean Strategy

Open Document