Red ocean and blue ocean strategies comparison table. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. But its not always clear how to create a blue ocean strategy for yourself. Achieved via the delivery of features that have a highest marginal benefit to customer needs. It is worth noting the organizations will move between blue oceans and red oceans over time. The concept of blue ocean strategies is new in the business world as it was first published in 2005 in the bookmanual blue ocean strategy, by w. If we compare the blue ocean with the red ocean we find that whereas the former denotes all the industries not in existence now and hence, are potential opportunities for companies to enter and unlock demand, the latter denotes the existing industries and the known market space, which is characterized by reduced. It is aimed at enriching blue ocean strategy with a case study in which we see the process of creating a blue. We will introduce the aspects of red ocean strategies that most of the companies use around the world, and then we will compare the advantages and disadvantages of using blue ocean strategies. Most of us work in industries that require that we displace our competitors in order to grow. What is the difference between red ocean and blue ocean. I like to think of it as a naval battle field versus oceans that are uncontested with no enemies. First published in 2005, it was updated and expanded with fresh content in 2015.
Based on the book blue ocean strategy, a red ocean is defined as a market where multiple competitors fight for the same customers. Lets focus on two of the businessworlds trending marketing strategies for electronic market space today blue ocean vs. Blue ocean vs red ocean strategies 6 major differences red bull case study published on june 2, 2016 june 2, 2016 91 likes 5 comments. Ideal for strategy lectures or strategy analysis introduction, impress your audience with this appealing slide. Blue ocean strategy the blue ocean approach is a strategic tool that helps innovation strategists asses current and desired future strategic states whereas red ocean is a current state. 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. Each table is created as powerpoint tables, and are 100% editable. Blue ocean vs red ocean strategy free download as powerpoint presentation. Big rocks first ebook to learn foundational best practices to form your marketing strategy, evaluate your messaging and more. Blue ocean strategy challenges everything you thought you knew about strategic success and provides a. Successful trailblazing organizations will attract competition, creating a red ocean. The vieoints of the authors are discussed with a greater clarity in order to clearify both the terms with respect to different references provided.
This is the same idea expressed in the form of an analogy. That is, do you try to dominate existing markets or look for opportunities to create new ones. Porters five forces is a very competitive marketing strategy. Red oceans are all the industries in existence today the known market space. The result of the competition is destruction, which draws the analogy of red blood in. Red ocean in blue oceans, demand is created rather than fought over. A red ocean is a saturated market with industry competitors. Value innovation strategy competes in an uncontested market space. But its much more common for a blue ocean to be created from within a red ocean when a company expands the boundaries of an existing industry.
Blue ocean strategy including examples and pdf download. There are tons of competition in the existing market space. Red ocean strategies compete in existing markets which is referred to head. Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. The trouble is, instead of helping in the creation of profitable new markets, they anchor managers in red oceans and prevent them from entering blue waters. This blog article is a overview of some of the key points of the book by w. What levie did to illustrate the fact that so much of the hotel industry has fallen into a sea of sameness i. Origin of the terms professors chan kim and renee mauborgne introduced the concepts of red and blue oceans in their international bestseller blue ocean strategy. The fighting results in a red sea, because much of the energy is spent competing.
A company will have more success, fewer risks, and increased profits in a blue ocean market. In my own opinion, most businesses are operating under very challenging circumstances in zimbabwe. Blue ocean strategy and its implications for businesses. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant.
The blue ocean, on the other hand, is calm, smooth, with lots of food and little or no competition. Blue ocean strategy powerpoint templates present better. It views longterm competition as the main concern that business people should be. Blue ocean strategy, red ocean strategy, innovation, competition, cirque, rivals. The value of having a blue ocean strategy is better understood when compared to a red ocean strategy. He projected on the screen guestroom photos of eight different hotel rooms, belonging to different brands, and he asked who in the room could. Competing in the red ocean means aiming to beat your competition. How to create uncontested market space and make the competition irrelevant, professors w. Blue ocean vs red ocean strategy strategic management. The following table is useful in highlighting the different focus areas between a red ocean and blue ocean strategy. Kim and mauborgne claim that blue ocean strategy makes sense in a world where supply exceeds demand. The goal of a blue ocean strategy is for organizations to find and develop blue oceans uncontested, growing markets and avoid red oceans overdeveloped, saturated markets.
In an environment where income streams are not welldefined and where there is political and economic challenges, businesses suffer. How does blue ocean strategy differ from red ocean strategy. Blue ocean strategy red ocean strategy blue ocean strategy compete in existing market space. Want more secrets and tricks like the blue ocean strategy. In red oceans, there is a competitiveadvantage worldview. Blue ocean vs red ocean questions blue ocean vs red. There is ample opportunity for growth that is both profitable and rapid. Blue ocean vs red ocean strategies 6 major differences. In this article you will learn how to make your competition irrelevant and have sales and profit. History and background a video game console is just a computer that is made only. In contrast, blue ocean strategy is about how to get out of established market boundaries to leave the competition behind. What is blue ocean strategy about blue ocean strategy.
See comparison between red and blue ocean strategies here in one simple table. Innovation, new market space and creating demand are central characteristics. How to create uncontested market space and make the competition irrelevant, a book by professors w. Red oceans are all the industries in existence today. In simple terms, red ocean strategy is about how to outpace rivals in existing market space. This is where everyone would like to be and it is possible for you to have a blue ocean. There is a defined market, defined competitors and a typical way to run a business in any. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy versus creating a blue ocean blue ocean strategy. The red oceans are the markets where sharks fight for their share, while the blue oceans, competition is irrelevant. Instead of swimming in the bloodstained red ocean, you can create a blue ocean. Then, the team must answer the following questions in a written response coversheet and about 5 to 6 pages total for all the 4 questions.
Blue ocean businesses create new markets, new demand, and often give the business insulation against competition. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean strategy is a powerful framework for finding new business opportunities. Blue ocean strategy is a book published in 2005 and written by w. These competitors may possess a competitive advantage driven by cost, differentiation, or niche market strategies. Are you a fiveforces disciple or a blue ocean enthusiast. Two of these are red ocean and blue ocean strategies, which were introduced by w. These systems started to gain popularity in the 1970s with consoles that played only pong.