Blue Ocean Strategy- 6 Paths 3 Tiers Essay

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The first principal of Blue Ocean strategy is to reconstruct market boundaries. Reconstructing the market’s boundaries will help a firm to break away from the competition. The six approaches to reconstructing market boundaries are known as the Six Paths Framework. The paths challenge the industry’s corporate level strategy, and lead to Blue Ocean ideas when applied across industry sectors. The first path is to look across alternative industries. Theoretically a company competes with any firm that offers an alternative product, inside or outside of its industry. Traditional movie theatre’s often have seating arrangements with little to no slope, making the audience sitting in the back considerably further from the screen. IMAX theatres use seating arrangements on a steeper slope, similar to stadium seating used in the sporting event industry. This seating allows for the entire audience to be much closer to the screen and provides maximum viewing pleasure. Path two is to look across strategic groups within industries. A strategic group is a group of companies who pursue a similar strategy. Many of these companies focus solely on competition within these strategic groups, when competing outside of them can be more beneficial. All traditional movie theatres fall into the same strategic group. They show the same variety of films to the same target markets, and compete with similar strategies. During its early years IMAX created a blue ocean by only offering high quality educational films of animals and nature. This strategy differentiated IMAX from normal movie theatres, while also showcasing the advanced IMAX technology. Although IMAX did move in to showing Hollywood films, they still offer a limited selection of more popular titles compared to traditional theatres. The third of the six paths is to look across the chain of buyers. Traditional

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