Skip to main content

What is Blue Ocean Strategy?

Blue Ocean Strategy is a marketing theory from a book published in 2004 which was written by W. Chan Kim and Renée Mauborgne, professors at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute. Before proceeding further let us know something about Red Ocean as it is famously quoted. This is related to the ocean of already existing opportunities where competition is neck to neck to attain dominance. Red Ocean signifies a saturated market where companies try to dominate and the mistake of trying to do that reflects in their operational costs whereas Blue Ocean presents a systematic approach to making the competition irrelevant and capture their own blue oceans. Red Ocean can be considered as a place which has been filled with blood due to killing each other in order to attain dominance.

Blue Ocean Strategy can be applied across sectors or businesses. It is not limited to just one business. For example, when Apple ventured into the Music Industry with its IPod, there was no player already in this market of selling music. The competition was made irrelevant by choosing a new area/market. The book suggests that it is better to find new avenues than fighting for space in the already filled pool. Blue Ocean is a lifetime opportunity to create, control and conceive the market by strategic choices and align it with long term goals and depends on Value Innovation.

Value Innovation is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company. The concept of Value Innovation is developed by W. Chan Kim and Renée Mauborgne and is the cornerstone of market-creating strategy.

Value to buyers = offering’s utility – price
Value to company = offering’s price – cost
Value innovation is achieved only when the whole system of utility, price, and cost is aligned.


Cost savings are made by eliminating
and reducing the factors an industry
competes on.
Buyer value is lifted by raising and
creating elements the industry has
never offered.












Pic Credits : © Kim & Mauborgne.

Comments

Post a Comment

Popular posts from this blog

Types of Artificial Intelligence (AI)

By now even a 10th class student studying in a remote village is familiar with this word. In the recent times, we have heard a lot about voice assistants, chat bots, robots etc and the activities they are involved in. But did you notice that all the machines involved use AI but have variations in it. For example, AlphaGO – Google’s GO playing AI developed by its subsidiary Deep Mind plays only the game but doesn’t perform any other activity and the chat bots that we come across are programmed to answer questions related to specific topics and Sophia the popular humanoid robot can talk, maintain eye contact, recognise individuals and recently has been upgraded with functional legs. All these use AI but vary in the degree of complexity involved. Hence, AI can be categorized into 3 types based on the application and they are  • Artificial Narrow Intelligence (ANI) • Artificial General Intelligence (AGI) • Artificial Super Intelligence (ASI) All the voice assis...
Post a Comment
Read more

Technological Singularity

Have you seen the famous Indian Super Star Rajinikanth’s movie Robo. If you have seen am sure you remember the post interval scene where chitti creates thousands of other chittis. Ever wondered what if that was really possible and if the world is heading in that direction? Read through and get to know yourself…. These days there are a lot of articles about Artificial Super Intelligence and Robots. Boston Dynamics is one of the front runners in creating robots. Although why are they doing with such intensity is a discussion for another day but one thing to think about is will Robots ever match human intelligence?   People in this space say singularity is really achievable. The state when Robots’ cognitive abilities surpasses human intelligence, is called Singularity and the latest news from the tech community is that singularity is as near as 2045 which means Generation Z and the late 1990s people will be surely there to watch it happen and as well play a...
Post a Comment
Read more

Customer Success (Manager)

This isn’t a new role/department but is a part of Marketing and not many are aware of it. It is still nascent but picking pace in the tech sector due to the toughness in retaining existing customers. Every company looks to increase Customer Lifetime Value (CLTV) and this department ensures it. In simple words, CLTV or CLV refers to the prediction of the net-profit earned through customer relationship. It involves the use of complex predictive analysis techniques. A June 1 analysis of LinkedIn data found 14,523 open jobs in the United States for customer success managers, and nearly 6,000 more in other countries. What's striking is that right now, only about 62,000 LinkedIn members worldwide already carry that job title. So the posted appetite for new hires in customer success amounts to nearly a third of the current workforce in the field. By now, you must be worrying what exactly is Customer Success (CS) and what kind of job is it and how different it is from Customer...
Post a Comment
Read more