It is the intersection between these analytic techniques and the six principles of formulating. The six principles of blue ocean strategy formulation principles risk factor each principle attenuates evaluation principles risk factor each principle attenuates strategy canvas the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. Beyond competing proven steps to inspire confidence and seize new growth. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. Renew blue ocean as much as possible and remove any renewal risk. Rather than concentrating on beating the competitors, the company must actually prioritize on making the competition irrelevant. The six principles show how to reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic. A blue ocean strategy adopts the belief that markets and industries are not structured to beget competition. The cornerstone of the blue ocean strategy is value innovation.
Examining a wide range of strategic moves across a host of industries, blue ocean strategy highlights the six principles that every company can use to. There are six basic approaches to reconstruct market boundaries, also known as six paths framework. The only reason more big companies dont set sail for them, they suggest, is that the dominant focus of strategy work over the. These four formulation principles address how an organization can create blue oceans by looking across the six conventional boundaries of competition six paths framework, reduce their planning risk by following the four steps of visualizing strategy, create new demand by unlocking the three tiers of noncustomers and launch a commercially viable blue ocean idea by aligning unprecedented utility of. Blue ocean is a slang term referring to the uncontested market space. In increasing numbers of industries, supply exceeds demand. Made by group d of the minor global trendwatching 2015. The six principles of blue ocean strategy this figure highlights the six. Blue ocean strategy bos is the simultaneous pursuit of differentiation and lowcost to create new market space. Although there is an inevitability to having to compete in crowded markets, there are too many advantages to avoiding this situation to ignore the possibility of looking for blue space. Six sigma vs blue ocean strategy in order to succeed in a capitalistic society, a business must have a defined edge over its competition.
Blue ocean strategy is a powerful framework for finding new business opportunities. The misconception that blue ocean strategy and differentiation strategy are synonymous. Blue ocean strategy is a new way of thinking, a new strategic mind set, a bold new path to winning the future. The six paths framework in formulating blue ocean strategy. In an already contested market, there is a natural cap in place on the potential of your business. It enables them to successfully identify out of the haystack of possibilities that exist, commercially compelling blue oceans by reconstructing market boundaries. The second part describes the four principles of blue ocean strategy. Formulating and executing blue ocean strategy six principles of blue ocean strategy reconstruct market boundaries focus on the big picture, not the numbers reach beyond existing demand get the strategic sequence right overcome key organizational hurtles build execution into strategy the following chapters will give you the principles and. Creating a blue ocean sales approach arbor dakota strategies.
In this article you will learn how to make your competition irrelevant and have sales and profit. Blue ocean strategy summary strategic management business. The impact of creating blue oceans we set out to quantify the impact of creating blue. Summary of the first four chapters of the international bestseller blue ocean strategy. Blue ocean strategy refers to a companys creating a new, uncontested market space that makes competitors irrelevant, creates new consumer value, and decreases costs. Blue ocean strategy chapter 6 get the strategic sequence right netflix in this chapter, professor w. Chan kim and renee mauborgne in their book blue ocean strategy. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was. Achetez et telechargez ebook blue ocean strategy, expanded edition.
This chapter f i g u r e 14 the six principles of blue ocean strategy. The authors define blue oceans as markets associated with high potential profits. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. Chan kim build up the regulations which can robust the business model to ensure that a healthy profit on blue ocean market space. Blue ocean strategy seeks to make the competition irrelevant by creating a leap in value for both the company and its buyers. Blue ocean shift is the essential followup to blue ocean strategy, the classic 3. But its not always clear how to create a blue ocean strategy for yourself. This principle aims to help reduce management risk by incorporating a system of fair process into the development of the strategy, managerial and employee attitudes and behaviors, and consequently the execution of the strategy.
How to create uncontested market space and make the competition irrelevant by w. Blue ocean strategy, also referred to as blue ocean shift, is a marketing strategy where there is a single firm selling a differentiated product or there can be very few firms selling products that are differentiated in the market. Finally, the managers should concern the ease of imitate. This blog article is a overview of some of the key points of the book by w. Canon copier industry case study blue ocean strategy. To break from competition, a organization has to reconstruct the market boundary which is the first and foremost principle in creating blue ocean strategy. It may be the technological advancement of its products or services, its cuttingedge marketing programs, or the way. Kim and mauborgne 2004a indicate that demand is generated in. All this only makes the principles, frameworks and tools of blue ocean strategy more and more applicable to the business practice today and tomorrow.
The six principles of blue ocean strategy formulation principles risk factor each principle attenuates reconstruct market boundaries focus on the big picture, not the numbers reach beyond existing demand get the strategic sequence right search risk planning risk scale risk business model risk evaluation principles risk factor each principle attenuates. An introduction to blue ocean strategy mba knowledge base. Expertise in saas deployment to the accounting profession and small to medium sized business owners, blue ocean principles works with vendors to create strategies that increase user adoption and partnerships to support growth initiatives. Value innovation strategy canvas four actions framework six paths. Drawing on more than a decade of new work, kim and mauborgne show you how to move beyond competing, inspire your peoples confidence, and seize new growth, guiding you step by step through how to take your organization. The first four principles address blue ocean strategy formulation. Quite simply, they only serve one set menu for 6 weeks. This can be done by creating more value for buyers enabling the company to open up a whole new uncontested market space, the blue ocean. Six principles of blue ocean strategy there are six main principles that guide companies through the formulation and execution of their blue ocean strategy in a systematic risk minimizing and opportunity maximizing manner.
The belief that blue ocean strategy is the same as innovation. Red oceans are all the industries in existence today the known market. A critical analysis on the blue ocean strategy and an approach. This strategy targets six principles that can be used in every organization so that they can arrive at a successful development and fulfilment of new markets. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any organization can use to create and capture their own blue oceans. Formulating and executing blue ocean strategy six principles of blue ocean strategy reconstruct market boundaries focus on the big picture, not the numbers reach beyond existing demand get the strategic sequence right overcome key organizational hurtles build execution into strategy.
How to create uncontested market space by reconstructing market boundaries. This is a focus on generating additional demand rather than improving or increasing supply through value innovation. The six principles of blue ocean strategy risk factor each principle attenuates evaluation principles risk factor each principle attenuates formulation principles 8. Table 2 describes the six principles of blue ocean strategy. Companies go to great lengths in order to develop their competitive edge.
The blue ocean strategy book defines red oceans as those which already contain a high level of competition. Chan kim and renee mauborgne allows managers to address the search risk many companies struggle with. Founders often unconsciously use blue ocean principles in early sales but do not know how to translate that to the sales people they bring in to scale their company. The insead blue ocean strategy institute is dedicated to extending the research on blue ocean shift, blue ocean strategy, and blue ocean leadership by chan kim and renee mauborgne and disseminating it to professors, researchers and practitioners around the globe.
The term of blue ocean appears when kim and mauborgne 2005 tried to define a new. Tbpl applied this strategy to achieve a blue ocean shift, using an analytical. We have the will power, expertise and ethical mind set in conducting our services, offering insideout approach to our clients from the board room to customer contact level, helping them to succeed globally. In other words, when you go headtohead against rivals for a share of the existing market, this is like competing in a red ocean. Examining a wide range of strategic moves across a host of industries, blue ocean strategy highlights the six principles that every company can use to successfully formulate and execute blue ocean strategies. Identify the direction that leads to blue ocean opportunities.
The sustainability and renewal of blue ocean strategy in the final chapter, professor w chan kim introduces how to maintain a sustainability and renewal of blue ocean strategy. Blue ocean strategy page 1 main idea the best way to beat your competition is, in fact, to stop competing against them. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. Blue ocean concepts, like all strategy frameworks, require strategy development, communication and execution. Also, they serve as essential pointers about their future strategy. Look across industries, groups, buyer groups, product and services, and time. The second stage of the sequence of blue ocean strategy is price.
Principles and the understanding of service innovation in design. This article is a continuation of our previous blue ocean strategy article well, the previous article delved into the first two steps of formulating a blue ocean strategy, which is a business concept devised by professors w. Pricing innovation profit model of blue ocean strategy blue ocean idea index the blue ocean idea index is a simple but robust test demonstrating how the sequence of utility, price, cost, and adoption form an integral whole to ensure commercial success through blue ocean strategy. Download citation blue ocean strategy despite a longterm. Use a visualizing approach to focus on the big picture. In this summary, well give a synopsis of the key concepts, tools and tips from the book. Six paths framework blue ocean shift blue ocean strategy. Blue green red and purple ocean strategy slideshare. Blue ocean principles business development consulting. The managers should consider the business should generate high volume of return. Blue ocean strategy formulation the four principles of. Pdf the business players always compete for competitive advantages to. The belief that to create a blue ocean, you must be first to market. The point we want to make here is that while amazon needs to learn more about the principles of marketcreating strategy, other retailers need to.
Blue ocean strategy how to create uncontested market. The misconception that blue ocean strategy is a lowcost strategy that focuses on low pricing. It involves the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. We did not want to be too ambitious and set ourselves up for failure. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. Use features like bookmarks, note taking and highlighting while reading blue ocean shift. Last but not least importance, our entire team at blue ocean strategy has the passion to see china to succeed in a platform beyond china. It enables them to successfully identify out of the haystack of possibilities that exist, commercially compelling blue oceans. Blue ocean strategy how to create uncontested market space and make the competition irrelevant. Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. Principles of blue ocean strategy are the six main principles that guide companies through the formulation and execution of their blue ocean strategy in a systematic risk minimizing and opportunity maximizing manner. These six principles are detailed in the body of the book and respond for almost 52% of.
The second of the two implementation principles involves designing execution levers into the strategy itself. Blue ocean strategy provides a systematic approach to break out of the red ocean of severe competition and make the competition irrelevant by reconstructing market boundaries to create a leap in value for both the company and its buyers. Many organizations struggle with one or more of these elements. Strategy canvas four actions framework errc grid six paths framework. Blue ocean strategy including examples and pdf download. What is blue ocean strategy about blue ocean strategy. The company simply cannot execute blue ocean strategy, blue ocean marketing or blue ocean sales if the founderceo does not fully understand blue ocean principles. All these principles can serve all sorts of companies, no matter the industry they are in. The book suggests you need to look at what the market is doing and competing on and create a strategy that is vastly different than that of the rest of the market. Strategy canvas the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy. The four principles to of blue ocean strategy formulation. Pdf blue ocean strategy how to create uncontested market. Then they should concern this business can be closed tied to the total number of people using it. The first principle of blue ocean strategy is to reconstruct market boundaries to.
Pdf blue ocean strategy as a tool for improving a companys. Chan kim and renee mauborgne have created a comprehensive set of analytic. Creating blue oceans cirque du soleil created uncontested new market space that made the competition. Blue ocean has six basic principles to form a strategy.
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