It is able to achieve low costs through many methods including using secondary airports further away from a city than the main airport, allowing only online booking and check-in, and requiring customers to pay for all extras, amongst other methods. As we’ve already mentioned, there are a lot of businesses that decided the Blue Ocean strategy was the best for them. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price. Let’s consider each in turn. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a … An example of a successful execution of a blue ocean strategy is the iPod. Building an Effective Go-To-Market Strategy: Four Questions Answered, How to Successfully Leverage a Research Panel for Product or Service Launches. This can be painful because creating a blue ocean typically requires a large investment. escalation and price indices are factored into a cost estimate. The best example of Blue Ocean Strategy that I know of is that of Apple launching the iPhone. Despite being unreliable, they cost $1,500, twice the average annual income. Contact Launch Marketing to see how our turn-key marketing services can generate leads and drive revenue for your business. So, whilst microwave ovens were definitely blue ocean in the 1970’s, today they are definitely a red ocean space. Red Ocean Strategies A red ocean strategy involves competing in industries that are currently in existence. They focus on the value/cost trade-off. It requires the right research, patience and focus. To learn more about how we handle your data, read the. The authors were co-directors of the INSEAD Blue Ocean Strategy Institute. If you look at the model then it is immediately clear that on many points the iPhone scores less well than the other device. Tia: November 19, 2009 at 12:49 am. The second more common way is to create a blue ocean within a red one. With a red ocean strategy, there is cutthroat competition. Apple observed the flood of illegal music file sharing that began in the late 1990s, enabled by file sharing programs such as Napster, Kazaa, and LimeWire. Take Aways • Red ocean strategy is a market-competing strategy, while blue ocean strategy is a market-creating strategy • As red oceans are becoming bloodier, we need to create more blue oceans • “The only way to beat the competition is to stop trying to beat the competition!” 16. Companies pursue Blue Ocean Strategies to make competition irrelevant. This post defines Blue Ocean Strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. Within a red ocean where a bunch of competitors are fighting it out, eventually one of the companies will embrace innovation and change, creating a blue ocean and sustaining growth. A brand new product or service. Because blue oceans are new, with no existing customer base, a lot of time needs to be spent educating customers as to the benefits of the category. It can be difficult to succeed with the cutthroat competition in the business environment today. To understand red ocean strategy let us begin by defining blue ocean strategy. Instead, companies should pursue new spaces, “blue oceans”, … Click the link above or the picture below to read more. Blue Ocean Strategy is where a company creates a completely new market space (or market category). The researchers called this the Red Ocean, analogous to a shark infested ocean where … An example of blue ocean strategy is cirque du solei, they take the concept of circus and changed it, instead of animal the main part of the circus is the estravagant dance and other things like opera and ballet, also the customers are different, mostly of them are adults, unnatural for a normal circus. Required fields are marked *. To understand what the Blue Ocean Strategy is all about, we make a comparison between a red ocean and a blue ocean. : Make the value-cost trade-off. Here are a couple of examples of companies who’ve successfully implemented the blue ocean strategy to grow their business: Cirque du Soleil. A Red Ocean or a Blue Ocean? Copyright 2009-2018 Expert Program Management. An excellent example of a blue ocean strategy is eBay, who did it with the online auction industry or Cirque du Soleil with the circus industry. The successful creation of a blue ocean can create brand equity which could last for years or even decades. You can think of a blue ocean being a place where the sailing is easy (uncontested with clear water) if you can successfully introduce an offering. What are Your Short- and Long-Term Marketing Strategies? In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. This blog article takes a look at what kind of ROI some companies have achieved by implementing a blue ocean strategy by W. Chan Kim and Renée Mauborgne. INSEAD is a prestigious graduate business school in Fontainebleau, France.INSEAD also has campuses in Singapore and Abu Dhabi. Beat the competition. Also, remain aware of the industry that you are competing against as well as new introductions to the market that may disrupt any market share that you have attained. They are competing very successfully in the already saturated red ocean of the short-haul airline business. This can be summed up with the following phrase: eval(ez_write_tag([[300,250],'expertprogrammanagement_com-leader-1','ezslot_8',604,'0','0']));Applying this phrase to your own business could mean that you pay attention to new categories being created by your competitors, and then move into that space with conviction as soon as the category shows real signs of promise. : Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost. http://pinterest.com/https://www.pinterest.co.uk/expertpm/. Winning is zero-sum against competitors. If you’d like to learn more about blue ocean strategies, then the best book on the subject is probably Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. richa: April 20, 2010 at … What is the Blue Ocean Strategy all about? The circus industry is no longer as popular as it once was. : Create uncontested market space. They are competing very successfully in the already saturated red ocean of the short-haul airline business. One final point to consider is that the majority of the most successful companies on the planet didn’t create the ocean they operate in, for example, Google and Facebook were not first in their space but they now dominate. Their strategy is focused on providing a low-cost no-frills airline. The disadvantage of the Blue Ocean Strategy Canvas is that no value is given to the parameter. Blue Ocean Strategy Examples. An example of blue ocean strategy is cirque du solei, they take the concept of circus and changed it, instead of animal the main part of the circus is the estravagant dance and other things like opera and ballet, also the customers are different, mostly of them are adults, unnatural for a … One industry in which a red ocean strategy would be necessary is the soft drink industry. This blog article is a overview of some of the key points of the book by W. Chan Kim and Renée Mauborgne.In this article you will learn how to make your competition irrelevant and have sales and profit … Blue Ocean Strategic Moves. You can safely choose 8 to 10 parameters. Propel your B2B marketing strategy. Treating Market-Creating Strategies as Niche Strategies. “The key goals of the red ocean strategy are to beat the competition and exploit existing demand.”. Here are examples of organizations which Layton sees as demonstrating a Blue Ocean Strategy: “NovoNordisk, … In another example of blue ocean thinking, the Nintendo Wii team looked at the traditional game console that relied on leading-edge power and performance as the key to their value proposition. Two of these are red ocean and blue ocean strategies, which were introduced by W. Chan Kim and Renée Mauborgne in 2005. Using the framework for building a compelling blue ocean strategy, we will apply the Blue Ocean Strategy Canvas to healthcare across three areas: Where the competition is investing. Blue Ocean Strategy Synopsis. 1. iTunes. Here are a few organizations that successfully captured a blue-ocean market: Cirque du Soleil: This Canadian entertainment company began in the 1980s as a bunch of “crazy people” with a vision of what the modern circus could be. Red Ocean Strategies have the following common characteristics:eval(ez_write_tag([[250,250],'expertprogrammanagement_com-box-4','ezslot_4',195,'0','0'])); A Red Ocean Strategy ultimately leads to an organization choosing to follow one of two strategies – differentiation or low cost. The traditional circus catered to kids. 2. : Create and capture new demand. The strategy is specifically a marketing theory and thus, a marketing strategy. Want More Secrets And Tricks Like The Blue Ocean Strategy? 3 rings), and pushing concession sales. This is a workshop presentation developed by KB Yip and YS Lieu for a Learning Institution. Which is Better? Furthermore, the aim of adopting this strategy is to search for a business in which very few firms operate and where there is no pricing pressure. The fundamental premise is that most companies fight competitors head-to-head in the same space, chasing the same customers with very similar products, creating a bloody-red ocean in their feeding frenzy. Description: Blue Ocean Strategy can be applied across sectors or businesses.It is not limited to just one business. Defining Blue Ocean Strategy: Red Ocean Versus Blue Ocean. When the iPod was introduced in 2001, Steve Jobs said that “with [the] iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go.” Apple looked beyond what was in the market at that time and introduced a product that created a new industry in and of itself. This causes the soft drink industry to be very competitive to enter and succeed in. Blue ocean. These markets are new and as such, there is the risk of completely misjudging the market and getting it wrong. As such, Red Oceans already contain a number of competitors. We all wan… This is an excellent example of the Blue Ocean strategy at work. : Make the competition irrelevant. Before iTunes, the music industry was losing millions of dollars to illegal downloads and consumption of music. Creating blue oceans. Trade off value for cost. This is a key principle of blue ocean strategy which sees low cost and differentiation being pursued simultaneously. It asserts that for businesses to win in the future, they must stop competing. If it’s you focused on sailing past red ocean in search for blue waters, untapped market potential, you increase your chances of survival and profit through new businesses … One is by launching or introducing a completely new product, service, or concept. However, it is a risky shift. Red ocean strategy: Blue ocean strategy: Compete in existing industry. Blue Ocean Strategy Examples. Blue ocean strategy canvas example. Austin, TX 78759. Blue Ocean Strategy How to Create Uncontested Market Space and Make the Competition Irrelevant Facilitators : Yip Khai Biau (firstname.lastname@example.org) & Lieu Yoke Sun Group/Presentation Title Agilent Restricted Date ##, 200X Make no mistake – it is 2018, it is the digital age of globalization, and every single business today is operating under intense competition in overly saturated markets. The first example in "Blue Ocean Strategy" is Cirque de Soleil. Blue Ocean Strategy is a theory explained in a 2005 book by W. Chan Kim and Renée Mauborgne, professors at INSEAD. While the authors of Blue Ocean Strategy suggest using the latter approach, no matter which you select, there are a few things to keep in mind. Blue Ocean Strategy Example. The following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy: It is worth noting the organizations will move between blue oceans and red oceans over time. It can be easily customized to suit the needs for other organizations. Blue Ocean Strategy - Summary and Examples 1. The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of the Nintendo Wii. When you break the bounds of existing industries, competition becomes irrelevant. The Nintendo Wii launched in 2006 and at its heart is the concept of value innovation. All the examples on the book are base in market research. Blue ocean strategy example – Apple iPod Blue Ocean Strategy Example – Cirque du Soleil. This blog article is a overview of some of the key points of the book by W. Chan Kim and Renée Mauborgne. Learn more about red and blue ocean strategies from the authors of the book on their website. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. Next up is the uniquely brilliant example of Cirque du Soleil, the legendary entertainment company that performs in over 300 cities for more than 150 million spectators in a world where circuses are dying down to slow extinction. Download Dan's Book, F.U. Blue Ocean Strategy Examples. Blue Ocean Strategic Moves. Introduction Blue Ocean Strategy evolves to Red Ocean good, concise article. Enter any market, any industry, and you’ll be immediately challenged by companies, big and small, selling similar products and services. They all serve important purposes. By submitting this form, you are opting into email marketing from Launch. The strategy aims to capture new demand, and to make competition irrelevant by introducing a product with superior features. Download our eBook, How B2B Leaders Can Gain (or Regain) Marketing Momentum. Share; Like; Download ... Khai Biau Yip, Director of Engineering. The circus industry is no longer as popular as it once was. A blue ocean exists when there is potential for higher profits, as there is now competition or irrelevant competition. Blue ocean strategy. It is clear what products and services customers want. This happened, for example, when Apple created its iTunes music download service in 2003. : Break the value-cost trade-off. Question What is Tesla Blue Ocean Strategy and examples . The traditional circus catered to kids. For years gaming companies had focussed on making better and better machines, Nintendo focussed my making the Wii fun. Canon. An example of a successful execution of a blue ocean strategy is the iPod. With the launch of iTunes, Apple unlocked a blue ocean of new market space in digital music that it has now dominated for more than a decade. In Blue Oceans, demand is created rather than fought over. Blue Ocean strategy is a framework which inspires to create a market for an innovative product or market where there is a less competition. It allowed for easy and affordable access to millions of songs and artists. You can think of the color red being used in the term red ocean because of the bloodbath that a highly competitive marketplace can sometimes feel like. Apple product iTunes is an example of Blue Ocean Strategy. This idea of strategy is the core of Chan Kim & Renée Mauborgne’s Blue Ocean Strategy (2005). This new market space is created by launching new offerings, with the aim being to make the competition irrelevant so that an organization can grow, uncontested, at least in the beginning. 1. In most industries there is little effort to … Apple entered into the digital music industry in 2003 with its product iTunes. This often requires overcoming an intense level of competition and can often involve the commoditization of the industry where companies are competing mainly on price. The business strategist finds that there is hope for the health care business. The second more common way is to create a blue ocean within a red one. With over 4 million copies sold, it is one of the most popular strategy texts today. This is a key principle of blue ocean strategy which sees low … It is a new day and we are back with a new topic of discussion exclusively for you all! Definition: 'Blue Ocean Strategy is referred to a market for a product where there is no competition or very less competition.This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. A good example of Red Ocean Strategy is the European airline operator Ryanair (or Southwest if you like in the US). Fight for existing demand. An example of a successful execution of a blue ocean strategy is the iPod. Your email address will not be published. : Exploit existing demand. This means that the water is bloody red; A red ocean focusses on the existing market space You are free to unsubscribe at any time. Click the link above or the picture below to read more. eval(ez_write_tag([[300,250],'expertprogrammanagement_com-large-leaderboard-2','ezslot_7',601,'0','0']));Nintendo created a blue ocean when it launched the Wii. Start From The Start. OFFICE Apple looked beyond what customers were asking for and created a successful product. You must keep in mind that there is a deeper potential of the marketplace that hasn’t been explored yet. This means that the water is bloody red; A red ocean focusses on the existing market space Blue oceans eventually become red oceans. In fact, they dominate so much that it creates a huge barrier to entry for new enterprises. Your email address will not be published. A Red Ocean Strategy is a strategy which aims to fight and beat the competition. For example, "competing factors" in blue ocean strategy are similar to the definition of "finite and infinite dimensions" in Funky Business. Launch Marketing Focus on current customers vs. focus on non-customers. Blue Ocean Strategy, Examples of Blue Ocean Strategy, The 8 Key Points of Blue Ocean Strategy, Difference between Red and Blue Ocean Strategy, Blue Ocean Four Action Frameworks, How to Use Four Action Templates, Eliminate, Reduce, Raise, Create, Conclusion.