MBA 667: Leaders on Leadership (Fall 2012) Book Review Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant. By W. Chan Kim and Renee Mauborgne Blue Ocean Strategy is about creating new markets which make competition irreverent. Kim and Mauborgne present the argument that in order for a company to break-out from the competition and sustain success, they must redefine the boundaries of the market and create their own “blue ocean.” In this newly formed blue area without the “bloody” competition in the red ocean, the innovative company can now capture new demand and reap success. The authors have created a very clever metaphor which ensures the readers want to be in the nice, clean, shimmering, blue ocean vice the “bloody” red ocean. There are six principles of the blue ocean strategy: (1) Reconstruct market boundaries, (2) Focus on the big picture, not the numbers, (3) Reach beyond existing demand, (4) Get the strategic sequence right, (5) Overcome key organizational hurdles, and (6) Build execution into strategy.
Charles Schwab 2007 As technology and markets evolve, organizations must evolve with them. In the case of Schwab this includes growing the size and area of the company’s focus. As technology changed, it paved the way for competitors to surpass Schwab as the low cost option, while expanding their offerings. 1.) Up until the mid-1990’s, how did Schwab position itself in the Brokerage industry?
The process requires an analysis of the external and internal environments, which will show the resources, capabilities and core competencies of the firm (Hanson, et al., 2008) The 21st century has an atmosphere of hyper-competition which has been spurred by globalisation and technological advances. (Hanson, et al., 2008). To succeed firms need to be flexible and have a contingent approach to managerial decisions. Quick, responsive action is necessary (being the first-mover can be a competitive advantage). Firms must be innovative, as technological advances have led to burgeoning niche markets, which must taken advantage of.
In order to survive in this competition always try being one step forward from them rivals. So they improve the product and reduce the price. Good service is also important in these red oceans. 2. What is Blue Ocean?
Background Recovered is considering establishing a greater presence in Kava. An evaluation of what is best for the company and what is good for the people of Kava will need to be completed to properly evaluate the challenges involved with locating a branch office in the Pacific. After a brief description of the Island, its people, resources and potential risks, by the Director of Strategic Planning, the first impression would be to forget the idea of locating an office in this location. The key to the evaluation is to look at the possible risks and turn them into opportunities. The company is looking to relocate to the island of Kava in order to increase the company’s international growth potential.
Moreover, the red ocean strategy focuses on competing in existing market space by outperforming competitors while the blue ocean strategy aims at creating uncontested market space and demand. Blue oceans are created by establishing a new industry, or more frequently by the alteration of a red ocean there by re-creating the existing industry. The most important aspect of the blue ocean strategy is the fact that it discards the conventional notion that companies can either create greater value for consumers at a higher price or produce reasonable value at a lower cost. Instead, blue ocean strategists believe that by re-evaluating and restructuring an industry, it is possible to achieve both a significant reduction in the cost of production and achieve a leap in value. Therefore a blue ocean is created when companies’ actions favorably affect its cost structure and its value proposition to buyers.
Dell survived the technology bust of 2001, and improved the company’s market share by providing a better-quality product and beat the competitors through quick delivery and meeting the customer needs (Krames, 2003, p. 63). Chapter 5 focuses on Intel co-founder and former CEO, Andy Grove. One of Grove’s contributions to the business field is his philosophies and strategies for change management. Grove
May 8, 2013 Group E, Industry 1 1. What would you recommend to management to create a Blue Ocean? In order to create a Blue Ocean something needs to happen that no other car dealers attempted or at least succeeded in that aspect. My solution to make our firm more blue ocean is to change the way we sell our cars, that would make dealerships more profitable and eliminate the competition by making it irrelevant is to establish new structure. Invest in new technology that would eventually change the way we purchase cars, houses, insurances without the middle man, which would drive the cost low and revenue high.
Blue Ocean Strategy “Blue Ocean Strategy is a book published in 2005. Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, it argues that companies can succeed not by battling competitors, but rather by creating ″blue oceans″ of uncontested market space. It asserts that these strategic moves create a leap in value for the company, its buyers, and its employees, while unlocking new demands and making the competition irrelevant. The book presents analytical frameworks and tools to foster organization's ability to systematically create and capture blue oceans.” According to "Blue Ocean Strategy" (2014) Cirque du Soleil is originally out of Canada and was started by some street performers. Cirque du Soleil is a fun-filled service of entertainment and has been for thirty years.
But the truth was he didn’t know how to get the faltering P&G back on track but then he manages to turn P&G into an operations and innovation powerhouse. Lafley helped guide P&G out of what we consider to be the firm's darkest hour in mid-2000, when the company was caught in an organizational transformation that had gone off the rails. He helped refocus the firm on what it knows best--the consumer--and on what it does best: build great brands and innovative products. Determined to create a more outwardly focused and flexible company, Lafley broke down the walls between management and the employees, and made drastic changes in the organizational structure and workforce of the company. He identified a serious slump in baby-care product sales as evidence of failure to delight consumers.