Blue Ocean Strategy

By : Rohit, Kanika, Pulkit, Sidharth, Ashwin

What is Blue Ocean Strategy?

It argue that companies can succeed not by battling competitors, but rather by creating “blue oceans” of uncontested market space.

It unlocks new demand.

It creates leap in value for the company, its buyers and it’s employees.

Part 1 : Value Innovation

The simultaneous pursuit of differentiation & low cost.

It is the alignment of innovation with utility, price & cost position. This creates uncontested market space & makes competition irrelevant.

E.g. “Nano Car” is adopted combination of differentiation & low cost. It is the outcome of combining value innovation & playing a different game.

Part-2 : 4 Principles1.Reconstruct market boundaries.

2.Focus on the big picture, not the numbers.

3.Reach beyond existing demand.

4.Get the strategic sequence right.

Part-3 : IMPLEMENTATION PRINCIPLES

1.Overcome key organizational hurdles

a)Cognitive b)Resource c)Motivational d)Political

2. Build execution into strategy

Red Ocean Strategy v/s Blue Ocean StrategyRED OCEAN STRATEGY BLUE OCEAN STRATEGY

Compete in existing market space. Create uncontested market space.

Beat the competition. Make the competition irrelevant.

Exploit existing demand. Create & capture new demand.

Make the value cost trade - off Break the value cost trade - off

Fight to win. Win without fighting.

Example 1 IRON MAN

STARK company used to produce weapons for U.S.

army but it created a new market place by giving birth

to IRON MAN.

Thus, making the competition irrelevant.

Example 2 : CASHEWS I am currently running business of dry fruits.

If I sell 10 tons of cashew with 5 more shops

doing the same thing. Then, I can choose for

1ton of roasted & salted cashew especially with

liquor. Thus, creating & capturing new demand.

Example3 : IPLEarlier, we used to have O.D.I’s & Test match as the only

format of cricket. But it was very boring.

So, Lalit Modi introduced IPL which proved to be an

entertainment bomb.

Thus, creating uncontested market space.

Conclusion

It is the strategic move neither the company nor industry that creates “Blue Ocean” and sustains high performance.

The Blue Ocean Strategy tries to align innovation with utility, price & cost positions.

The book suggests that both differentiation & lower costs are achievable simultaneously.

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