Abdel Salam H. Busalim – MC122009Abdelrahamn M. Ibrahim – MC112078 Mozhdeh Vahid - MC122055 Mojtaba Zare - 20123M10085 Komeil Raisian Mat - MC 112157 Dr.Ab Razak Che Hussin
Definitions:Blue Ocean Strategy is a way to make the competitionirrelevant by creating a leap in value for both the companyand its customers and create new demand in new marketspaceRed oceans mean, all the industries in existence today theknown market space. In the red oceans, industry boundariesare defined and accepted, and the competitive rules of thegame are known.
Blue Ocean and Red Ocean Blue Ocean Red Ocean Create uncontested market space. Compete in existing market space Make the competition irrelevant. Beat the competition. Exploit existing demand. Create and capture new demand Align the whole system of a company’s Align the whole system of a company’s activities in pursuit of differentiation and low activities with its strategic cost. Break the value/cost trade-off. Make the value/cost trade-off.
The cornerstone of blue ocean strategy
Action framework• Which of the factors that the industry takes for granted should be eliminated?• Which factors should be reduced well below the industry’s standard?• Which factors should be raised well above the industry’s standard?• Which factors should be created that the industry has never offered?
Principles of formulating BOSReconstruct Market Boundaries : path One : Look across alternative industries Path Two: Look across strategic groups within industries Path Three: Look across the chin of buyers Path Four : Look across Complementary products and services offering. Path Five : Look across functional or emotional appeal to buyers . Path Six : Look across TimeFocus on the big picture not the numbersReach beyond existing demandGet strategic sequence rightOvercome key organizational hurdlesBuild execution into strategy
Successful Case study
Successful Case study Other circuses focused on: Benchmarking the competition High-profile “stars”, which increased costs but who were largely unknown to the general public Traditional venue Traditional audiences
Successful Case study• Cirque du Soleil focused on: Creation of a hybrid between the circus and the theatre Retention of the symbolic and glamorous aspects of circus, such as the tent and the more breathtaking aspects, such as acrobats. Incorporation of more comfort, sophistication, elegance and theatrical plots; this brought not only the richness of theatre but a whole new demographic of customers It looked across market boundaries and created new ones.
Advantages of BOSThe current market space gets increasingly crowded, profit and growthprospects shrink, BOS opens prospects for new market space .Create new and capture demands from the new market space.Drive profitable growth.The competition in blue oceans strategy is irrelevant.
limitations of BOSThe value innovation does not make sense to companys conventional logic.Blue ocean strategy may conflict with other companys brand image.Natural monopoly; the market often cannot support a second payer.Network externalities discourage imitation, because imitation often requiredchanges in the existing business practices .