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  1. 1. Despite earning the accolade, Top Business Book of the Year 2005 by, : How to CreateUncontested Market Space and Make the Competition Irrelevant, the publics interest has not paralleled thesignificance of its business contributions. Blue Ocean Strategy has been regarded as a revolutionary business strategy tool. In this article I will provide an introductory brief of the ideas and principles of BlueOcean Strategys business logic as filtered through my personal ocean strategy
  2. 2. How Blue Ocean Strategy Even Came About Since the sunrise of thebusiness age companies have battled nose-to-nose in search ofcontinued lucrative growth in their respected industries Companies fighta competitive advantage battling over soul of the market place, but havestruggled for delineation However, these tactics which focus onhead-to-head competition should not be the way to generate profitablegrowth in the future In a book that challenges everything you thought youknew about the necessities for strategic achievement, co-authors andfounders of Blue Ocean Strategy W Chan Kim and Renee Mauborgnedispute that traditional competition-based strategies result in a red oceanof bloody competition in which rivals are combating over a reduction ofthe profit pool Based on a study of 150 strategic moves spanning morethan a hundred years and 30 industries, the authors dispute that lastingachievement comes not from battling competitors, but from creating "blueoceans unexploited innovative market spaces ready for growth Suchstrategic moves--which the authors call "value innovation"--createauthoritative leaps in value that often make rivals outdated for more thana decade
  3. 3. Blue Ocean Strategy presents a systematic approach to making thecompetition irrelevant and outlines principles and tools any business canuse to make and capture blue oceans Milestone works that upendcustomary thinking regarding strategy, this book charts a daringinnovative path to winning the future W Chan Kim is the BostonConsulting Group Bruce D Henderson Chair Professor of Strategy andInternational Management at INSEAD Renee blue ocean strategyMauborgne is the INSEAD Distinguished Fellow and Professor ofStrategy and Management Example Lets consider how Netflix, onlineand rent-by-mail movie business, successfully moved across existingindustry standards and applied Blue Ocean
  4. 4. For a moment think of how you rented movies in the late 1990s You hadto drive to the store and rent movies at a moderately high price Worst ofall, you had to return them quickly amidst your business schedule or faceshamefully high late fees This usually meant rushing back to the store by11:00am Until 1997, when Netflix redefined the way we borrowed movies Netflixs came up with a 100% consumer-focused way to rent movies asits business model challenged the existing industry standards Netflixcreated its blue ocean by being entirely different from its competition: * Ithad no store as movies were selected by clients online
  5. 5. This kept costs down for Netflix, and for its consumers * Since movieswere mailed out the public no longer had to drive to plunge them off *Postage was taken care of by Netflix, getting free of another source ofcustomer irritation * Delayed fees were eliminated You could keep amovie as long as you wanted * Movies could also be watched onlineThis eliminated waiting, and added extensive value for customers
  6. 6. * Pricing was set using a flat-fee monthly membership formation, as analternative of on a "per movie" basis This gave members more value fortheir money Netflix completely changed the way the public rentedmovies, and changed how movie rental companies delivered thosemovies As an effect, they had full control of the online and rent-by-mailmarketplace for nearly a decade Competition has now crawled in, butNetflix has had such a huge head start in the business and hasestablished its brand name that its going to be tough for the competitionto tremble them Its imperative to understand that companies dont haveto entirely redefine their business or business in order for Blue OceanStrategy to work Popularly, blue oceans are created from within existingorganizations
  7. 7. Its typically about designing one new product or service and linking it towhat buyers actually wish for; even if they dont comprehend they yearnfor it Key Points: is a way for your business to leave the competitionbehind, and go into a market thats open and without interruption Itscornerstone concepts are that companies can present themselves, andtheir clients, value while still increasing above their competition in asignificant way You can apply Blue Ocean Strategy to your business byexploratory standards and steps that are a given in your business Lookto connect the lines, and classify what your consumers really want fromyour company, and what existing problems you can assist work out
  8. 8. blue ocean strategy