Would you like to know all the potential that this corporate strategy has? In this article, we will explore examples of the blue ocean strategy, its benefits and the companies that have successfully implemented it.
What is blue ocean strategy?
Blue Ocean Strategy, also known as Value Innovation, is a method by which companies enter new market niches without direct competition by developing an innovative concept. The strategy was developed by W. Chan Kim and Renée Mauborgne, who use the metaphor of “blue oceans” to differentiate them from “red oceans”, characterized by high competition between companies in the market.
Objectives and advantages of the blue ocean strategy
In their book Blue Ocean Strategy: How to Create Uncontested overseas chinese in uk data Market Space and Make the Competition Irrelevant , business professors Chan Kim and Mauborgne presented their concept of the successful company.
Taught at the European Institute of Business Administration, also known as the INSEAD business school, this strategy is considered part of strategic management and advocates that companies should not compete with each other, but rather forge their own path.
To make competition irrelevant, companies must create unique and innovative products. This current strategy allows them to avoid the pressures of price wars. Although imitators are inevitable, Mauborgne and W. Chan Kim showed in their study that companies could maintain their unique selling proposition for 10 to 15 years using the blue ocean strategy.
Among the main advantages of the blue ocean strategy we can mention:
There is practically no competition
Creation of new demand, thereby attracting a new group of customers
Cost structures are not subject to competitive pricing, allowing for optimization
Meaningful innovation leads to high sales volumes and economic growth without competitive struggles.
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Red Ocean vs. Blue Ocean : What’s the Difference?
Chan Kim and Mauborgne often use the analogy of red oceans and blue oceans to describe blue ocean strategy.
The colorful representation has a metaphorical meaning. While many predators (competitors) fight each other in the red oceans, the fish in the blue oceans swim peacefully without interfering with each other and drive profitable growth .
