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Red Queen Effect and Blue Ocean Strategy

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The Definition of Red Queen Effect and Blue Ocean Strategy

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Red Queen Effect and Blue Ocean Strategy

  1. 1. Red Queen Effect Burcu Durmuşoğlu Büşranur Akgül Bige Özcan
  2. 2. Biological Definition Leigh Van Valen proposed the metaphor of an evolutionary arms race which was appropriate for the description of biological processes with dynamics similar to arms races. In this processes, an adaptation in a population of one species may change the selection pressure on a population of another species, giving rise to an antagonistic coevolution.
  3. 3. Red Queen Effect in Action
  4. 4. "The rabbit runs faster than the fox, because the rabbit is running for his life while the fox is only running for his dinner."
  5. 5. Business Definition The red queen effect is a metaphor used in the business world to describe the unsuccessful efforts of a company to get ahead of its competition. Companies typically research or study the competition and then implement strategies to help boost their company sales and profits.
  6. 6. Red Queen Effect in Business This is an effective and practical method of outmaneuvering the competition. While this technique works in theory, companies might not achieve their goals because the competition engages in the same business practice. Despite a company's efforts to surpass the competition, the company does not move forward or grow.
  7. 7. “Now, here, you see, it takes all the running you can do just to keep in the same place.” •If you do nothing, you fall behind. •If you run hard, you stay in place.
  8. 8. “If you want to get somewhere else, you must run at least twice as fast!” •If you transform, you can move ahead.
  9. 9. How does do this transform? • Visibility • Efficiency • Effectiveness • Adaptable • Support
  10. 10. “Red Queen Effect” is in place where there are two emerging strong competitors who, by trying to stay ahead of the other, keeps improving their products at a pace that effectively drives the remaining competitors out of the market or to the brink of irrelevance. Unlike biological predator-prey relationships, each technology is both predator and prey. The customer usually benefits from them.
  11. 11. According to Leigh Van Valen If the longer tree which get longer one way to others in the forest that consist of the same trees benefit more from the sun. The trees that in the shadow are prolonged in order to receive light from the sun. Otherwise, they will starve and die.
  12. 12. Who will be faster than everbody even than the industry itself about creating the difference?
  13. 13. It’s all about being innovative. Organizations that don’t have innovation culture need adviser like Cheshire cat which represents knowledge and wisdom in Alice Wonderland.
  14. 14. - Alice: Can you help me to find my way? - Cheshire Cat: It’s depend on where you want to go to. Where do you want to go? - Alice: It doesn’t matter. - Cheshire Cat: Then, it doesn’t matter which way you choose to go.
  15. 15. In the areas of intense competition, innovation that created thereby differentiate the value for customer, dragging companies to the blue ocean.
  16. 16. According to Kim who founder of Blue Ocean Strategy
  17. 17. Blue Ocean Strategy A framework which inspires to innovate and develop new demand and new markets to sell your products instead of fighting with competition over the same market share and satisfying the same demand.
  18. 18. Characteristics of Blue Ocean Strategy • Create uncontested market space • Make the competition irrelevant • Create and capture new demand • Break the value/cost trade-off • Align the whole system of company’s activities in pursuit of differentiation and low cost.
  19. 19. Four Actions Framework
  20. 20. The most popular example of blue ocean strategy is Cirque du Soleil. • Founded in 1984. • Canadian Company • Canada’s largest export.
  21. 21. According to Kim Cirque made the profit without competing in the market. They created uncontested market space.
  22. 22. What does the traditional circus offers? • Animal act - Rising public concern about the treatment of circus animals. • Three ring show - The higher ticket prices discouraged parents from making purchases.
  23. 23. What does Cirque du Soleil offers? • Enchanted and sophisticated clown shifting away from slapstick • Glamorized the tend with glorious external finish and a high level of audience comfort, more relaxation
  24. 24. 4 Actions of Cirque du Soleil
  25. 25. Value Innovation for Cirque du Soleil
  26. 26. Red Queen Effect vs Blue Ocean Strategy ➢In red queen effect, there is an existing market space and competition occurs in this market space. In blue ocean strategy, escaping from the fighting in competition thereby creating uncontested market space. ➢ In red queen effect, companies focus on innovation in same demand and same markets. In blue ocean strategy, companies focus on developing new demand and new markets. ➢ In red queen effect, being innovative is the most important term within the competition. In blue ocean, being creative is the most important term within the industry.
  27. 27. ➢In red queen effect, being quick with in the same industry’s standard is important. In blue ocean strategy, raising above with in the industry’s standard is important. ➢In red queen effect, experimental learning is exist. In blue ocean strategy, observational learning is exist. ➢In red queen effect, in both sides of competition eventually customer benefit from it. In blue ocean strategy, before the customer, company have advantage of being first in the uncontested market space.
  28. 28. ➢In red queen effect, companies try to respond consumer buying behavior. In blue ocean strategy, companies try to shape consumer buying behavior. ➢Market penetration cause of red queen effect on companies. Market saturation cause of companies tending to blue ocean strategy.

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