blue ocean strategy

1. BLUE OCEAN STRATEGY
IS IT THAT SIMPLE TO FIND A NEW MARKET?
Presented by: Pragati Srivastava

2. TABLE OF CONTENTS
1. Introduction
2. History
3. Differences between the red
and the blue ocean
4. Strategy implementation
5. Influential factors
6. Merits
7. Demerits
8. Real world instances
9. Verdict

3. INTRODUCTION
The blue ocean strategy is about helping your company gain uncontested market space
separate from other, similar businesses.
Specifically, the Blue Ocean Strategy is a strategy that changes the frame of innovation
within a company and its industry, replacing “competitive advantages” with “value
innovation” in order to create new demand and discover uncontested market space.
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4. HISTORY
W. Chan Kim and Renee Mauborgne came up with the idea after they conducted a study of 150
strategic moves spanning 100 years and involving 30 industries. They found that the best option
would be for companies to generate demand in a new market space rather than to compete for the
same market space.
They published these findings in a 2005 book called 'the Blue Ocean Strategy', which detailed
what the strategy meant, examples of why other strategies are not sustainable, and examples of
companies succeeding using their methods. Before the introduction of the Blue Sky Strategy, the
existing theory on competition was headed by Michael Porter who claimed that successful
businesses were either niche-players on a market or low-cost providers.
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5. DIFFERENCES BETWEEN THE RED OCEAN AND THE
BLUE OCEAN
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Compete in existing market
Beat the competition
Exploit new demands
Make the value cost trade off
Align the whole system of a firm's activities with
its strategic choice of differentiation or low cost
Create uncontested market space
Make the competition irrelevant
Create and capture new demand
Break the value-cost trade-off
Align the whole system of a firm's activities in pursuit of
differentiation and low cost

6. IMPLEMENTATION OF
THE BLUE OCEAN
STRATEGY
Kim and Mauborgne’s book suggests taking the following steps to implement a blue ocean strategy:
Figure out a starting point for introducing your new offerings, and hire employees who will help
you build the strongest team and brand identity.
Assess your current team’s strengths and weaknesses, and determine how to improve them.
Identify pain points that your current and new customers might have.
Develop products and services that address these pain points in ways unlike any other business.
Write a formal plan for your shift and test your new products and services (and the processes
you’ll take to get there).
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7. INFLUENTIAL FACTORS
To discover an elusive blue ocean, Kim and
Mauborgne recommend considering what they call
the “four actions framework” to reconstruct buyer
value elements in crafting a new value curve. The
framework poses four key questions, they are
listed in the picture shown.
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8. MERITS
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First mover
advantage
Higher
margin
Low
competition
Less
stressful

9. DEMERITS
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Difficulty
in finding
the right
ocean
Risk of
arriving too
early
Risk of
being too
different
Low
success rate

10. REAL WORLD
INSTANCES
Uber:- Uber is a brainchild of the Blue Ocean Strategy and has dramatically transformed the
picture of the transportation industry by discarding the nuisance of denial of services, meter
issues and unwanted bargaining arguments. Uber devised a new market by the amalgamation of
advanced technology and modern devices.
Ford Motors:- With its introduction of the Model T car, The Ford Motor Co. in 1908, created an
automobile which was less expensive and more reliable. It created the mass-producing
manufacturing process offering cars at a fraction of the price offered by competitors. The
company captured 61% of the market share by 1921, also replacing the principal mode of
transportation, i.e., horse-drawn carriages.
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11. VERDICT
Creating Blue Oceans is not a static achievement but a dynamic process. Once a company creates a
blue ocean and its powerful performance consequences are known, sooner or later imitators appear
on the horizon.
In general terms, the success in the market relies on how consistent the innovation is and how the
firm can hold it through a period of time in order to make the competence irrelevant.
To maximize the size of the blue ocean, one needs to expand the audience and look towards those
groups that do not belong to the client list or simply are non-customers.
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