Blue Ocean Strategy• How to Create Uncontested Market Space and Make the Competition Irrelevant• Don’t Compete with Rivals—Make Them Irrelevant• Yet in today’s overcrowded industries, competing head-on results in nothing but a bloody “red ocean” of rivals fighting over a shrinking profit pool.
Blue Ocean Strategy• Kim and Mauborgne argue that tomorrow’s leading companies will succeed not by battling competitors, but by creating “blue oceans” of uncontested market space ripe for growth• Such strategic moves—termed “value innovation”—create powerful leaps in value for both the firm and its buyers, rendering rivals obsolete and unleashing new demand.
RED OCEAN STRATEGY•Compete in existing market space•Beat the competition•Focus on existing customers•Exploit existing demand
Red Ocean Strategy• Make the value-cost tradeoff• (create greater value to customers at a higher cost or create reasonable value at a lower cost)• Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost
BLUE OCEAN STRATEGY• Create uncontested market space• Make the competition irrelevant• Focus on non-customers• Create and capture new demand
BLUE OCEAN STRATEGY• Break the value-cost tradeoff (Seek greater value to customers and low cost simultaneously)• Align the whole system of a firm’s activities in pursuit of differentiation and low cost
Four Actions Framework• Which of the factors that the industry takes for granted should be eliminated?• Which factors should be reduced well below the industrys standard?• Which factors should be raised well above the industrys standard?• Which factors should be created that the industry has never offered?
Formulating Principles• Reconstruct market boundaries• Focus on the big picture, not the numbers• Reach beyond existing demand• Get the strategic sequence right