Blue Ocean Strategy , Red Ocean Strategy and Global Market

Entry Strategies

By-

Chandankumar GarjeRahul SanapRitesh RuhatiyaRavi SagarManeesh Pandita

Blue ocean strategy•Blue ocean strategy denote all the industries not existence in today market •Create and capture new demand•Opportunity for highly profitable growth•The creation of a new market space gives companies a natural monopolistic position•Make the competition irrelevant

Formulating Blue Ocean Strategy

maximize the opportunities + minimizing the risksAnalytical Tools and Frameworks:1) Strategy Canvas2) Four Actions Framework3) Eliminate-Reduce-Raise-Create Grid4) Three Characteristics of Good

Strategy.

The Strategy Canvas • The Strategy Canvas is both a diagnostic

and an action framework for building a compelling blue ocean strategy.

Value Innovation : The Cornerstone of Blue Ocean Strategy

cost

Buyer value

Value Innovation

SEQUENCE OF BOS:-

The Eliminate-Reduce-Raise-Create Grid Benefits:It pursue differentiation & low costs to break the

value-cost trade-off.It immediately flags companies that are focused only

on raising and creating. It is easily understood by managers at any level ,

creating a high level of engagement in its application.

Eliminate

Raise

Reduce Create

Executing BOS 1. Overcome key organizational hurdles.

2. Build execution in to strategy :- Create culture of trust and motivates people to

execute the agreed strategy.

Resource hurdle

Political hurdle

Motivational hurdle

cognitive hurdle

Three Characteristics of a Good Strategy

•FOCUSES :on the important areas and not on every single factor.•DIVERGENS: away from the competitors offerings.•TAGLINE: A good strategy has a simple easy to communicate , clear-cut compelling TAGLINE.

These three characteristics serve as an initial litmus test of the commercial viability of blue ocean ideas.

Example

TATA NANO

• Small and most inexpensive car in the world• Created substitute for two wheelers• Affordable cost to the manufacturer

First tagline was “ now you can”; derived from Barack Obama's campaign.

Ex.2 Spicejet

•Flights to Afghanistan capital Kabul medical tourism and trade

•Flights to Guangzhou and Macau

Red Ocean Strategy•Red Oceans refer to the known market space, i.e. all the industries in existence today. •In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.•Red ocean metaphor to describe an overcrowded market space of competitors all fighting for the same piece of the pie.

Characteristics•Industries focus on competing in a marketplace which already exists• They focus on beating the competition• They focus on the value/cost trade-off• They focus on exploiting existing demand

ExampleRYAN AIR

• Competing in very large airline industry • Low cost airline• Uses secondary airports away from main airports• Only online booking and check-in• Customers to pay for all extras

Red Ocean Strategy

Blue Ocean Strategy

• Existing market focus • New market creation

• Beat competition • Make competition irrelevant

• Capture more of existing demand

• Create new demand existing demand

• Make a value/cost tradeoff • Disprove the value/cost tradeoff

GLOBAL MARKET ENTRY

STRATEGIES

EXPORTING IS AN ENTRY STRATEGY

Indirect Exporting

Direct Exporting

Global StrategyGlobal Strategy as to enter the global market with one strategy.

E.g. Apple phone, laptop, I pad etc.

FOREIGN PRODUCT AS AN ENTRY STRATEGYLicensingA company assigns the right to a copyright a trademark to

another company for a fee or royalty.

E.g. journal Harvard business FranchisingSpecial form of licensing in which the franchiser makes a total

marketing program available including brand name, logo, products and methods of operations.

E.g. McDonalds , KFC.

OWNERSHIP STRATEGIESCompanies investing in foreign markets face ownership

decisions.

Wholly owned subsidiaries Operation in a host country that are fully owned by a foreign parent firm. They can

involve marketing , assembly, or full scale integrated production operations. E.g. Skoda, Ford manufacturing plant.

Joint venturesJoint ventures means finding a foreign partnerE.g. Maruti Suzuki, TATA DOCOMO

Strategic alliancesTwo partners contribute a fixed amount of recourses and the

ventures develops on its own.

E.g. Nokia used Microsoft software for handsets.

ENTERING THROUGH MERGERS AND ACQUISITIONSMergers means a statutory combination of two or more

corporations by the transfer of the properties to one surviving corporation.

Combination of Company in one company.The 2002 merger of Hewlett-Packard and Compaq Computer

E.g. Procter & Gamble a consumer goods company, engaged in just such a transaction with its 2005 merger with Gillette.

ACQUISITIONSAcquisitions means Corporate action in which a

company buys most stakes in order to control the

target firm.

E.g. Vodafone’s purchase of 52% stake in Hutch Essar for about $10 billion

TURNKEY PROJECTTurnkey projects involve a contract for construction of

operating Facilities that are transferred for a fee to the owner when the facilities are ready to commence operations.

E.g. Construction project like C Link in Mumbai.

Production SharingProduction Sharing as name suggest share the production

facilities. E.g. kpo, bpo etc.

COUNTERFEITS AND PIRACYToday the biggest problem international marketers face in

trying to protect their brands is counterfeiting.Counterfeiting is the illegal use of a registered trademark.A counterfeiter copies a branded product, cashing in on its

brand equity.E.g. Pirating of DVD

Thank you!!!