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.
BLUE OCEAN STRATEGY Blue Ocean strategy is a case study which in detail explains how industries in this world differ from each other. In this case study I came across a classification of industries. The industries were categorised in to two groups- blue oceans and red oceans. Blue Ocean is a category of industries that have emerged in untapped market space, which has large probability for high profitability growth. When an industry enters a new zone or field where there is no competition and when that industry becomes a trendsetter, it will come under Blue Ocean.
That would like to travel, but could not afford the airline ticket. While other airlines chose to not cater to these customers Air Asia’s founder saw a perfect opportunity to gain huge profits in this uncontested market. Just how Southwest airlines did in the U.S Air Asia operated in the similar low cost model and has been highly successful in doing so. “Mr Fernandes believes the trick is to be single-minded about the operation and to keep it simple. ("How Air Asia Founder Tony Fernandes' Dream Came True", 2012) Another BOS business that succeeded due to going out finding a big blue ocean is a great company that stands behinds their believes they can change the world one pair of shoes at a time.
1.0 INTRODUCTION Businesses strive to survive in the market place. Market boundaries exist in mature and competitive market but they could be reconstructed by a firm in order to create uncontested market space. To develop strategies that will allow a new business create an uncontested market place strategic move must be in place. Strategy development is a creative process that requires the business owner having a vision of what he wants the company to achieve in the short and long term. Most Industry falls under the group of Red Oceans.
Strategic Analysis Florida Blue Word Count: 4,350 A. Executive Summary In this strategic analysis we will be analyzing Florida Blue’s current operations to provide strategic recommendations that will leverage their strengths, nullify their weaknesses and allow them to gain market share among Generation Y in the state of Florida. According to our industry analysis, the health insurance industry has high barriers to entry, very few substitutes, high competition and can be very lucrative. For companies already in the industry, the industry can be very attractive and there are big opportunities to make a profit if they can keep ahead of competition. Our analysis shows that the power of suppliers is balanced out by the lack of power of buyers.
What's a red ocean? -the rivalries we understand in known industries -You accept key constraints that define your industry → boundaries are defined and accepted, competitive rules are understood What is a blue ocean? -Doing business where there is no competitor-- finding your own space; demand is created rather than fought over. -You don't accept that it is difficult to create new market space. How is a blue ocean created?
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 Plan MKT/421 Introduction In today's competitive market where companies attempt to outperform one another by creating a brand new product or adjusting an existing product in attempts to appeal to a larger customer base are referred to as a Blue and Red Ocean strategy plans; “Red Oceans represent industries in existence today, and the industry boundaries are defined, accepted, and the competitive rules of the game are understood. Blue oceans denote all the industries, not in existence today- the unknown market space untainted by competition." (Kim & Mauborgne, 2004, p. 82(10), 76–84.). Movie theaters are one example of a Red Ocean. Initially, individuals would watch movies at a drive-in movie theater that later progressed to indoor movie theaters where customers were given the opportunity to purchase foods and beverages.
Furthermore, utilize technology. Because it has better use of technology and reservation are handled online with the unique reservation system. True Blue rewards service is all online. Besides, JetBlue is such a strong brand among the US people. JetBlue was named the number one U.S domestic airline by Coned Nast Traveler magazine’s Readers” Choice Awards” for the sixth year in a row.
Assess 3 factors that have influenced management operations (12mk) Management operations is heavily influenced by globalisation, technology and government policies. Management must consistently change and update its methods so the business can function successfully as the above factors are external and therefore can’t be controlled. As a result, having both beneficial and detrimental effects on businesses. The integration of economies has resulted in businesses being able to access a global market where they can sell their outputs of operations. Globalisation has successfully been able to achieve reduced costs for businesses through the establishment of a global supply chain.