Blue ocean strategy

Al-Azhar University – Gaza
Faculty of Economics and Administrative Sciences
Department of Business Administration
The Extent Of Adoption Of Blue Ocean Strategy In
Pharmaceutical Industries Companies In The Gaza Strip
And Its Role In Enhancing Sustainable Competitive
Advantage
‫غزة‬ ‫قطاع‬ ‫في‬ ‫الدوائية‬ ‫الصناعات‬ ‫شركات‬ ‫في‬ ‫األزرق‬ ‫المحيط‬ ‫إستراتيجية‬ ‫تبني‬ ‫مدى‬
‫المستدامة‬ ‫التنافسية‬ ‫الميزة‬ ‫تعزيز‬ ‫في‬ ‫ودوره‬
Prepared by:
Sabreen N. doghmosh
Supervised By:
Dr. Belal Al- Bashiti
This study presented to complete the requirements for obtaining
a bachelor's degree
of business administration
2018-2019

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‫إقرار‬
‫العنوان‬ ‫تحمل‬ ‫التي‬ ‫الرسالة‬ ‫مقدم‬ ‫أدناه‬ ‫الموقع‬ ‫أنا‬:
‫إستراتيجية‬ ‫تبني‬ ‫مدى‬‫تعزيز‬ ‫في‬ ‫ودورها‬ ‫غزة‬ ‫قطاع‬ ‫في‬ ‫األدوية‬ ‫صناعة‬ ‫شركات‬ ‫لدى‬ ‫األزرق‬ ‫المحيط‬
‫المستدامة‬ ‫التنافسية‬ ‫الميزة‬
The Extent Of Adoption Of Blue Ocean Strategy In Pharmaceutical
Industries Companies In The Gaza Strip And Its Role In Enhancing
Sustainable Competitive Advantage
‫ما‬ ‫باستثناء‬ , ‫الخاص‬ ‫وبحثي‬ ‫جهدي‬ ‫نتاج‬ ‫هو‬ ‫إنما‬ ‫البحث‬ ‫هذا‬ ‫عليه‬ ‫اشتمل‬ ‫ما‬ ‫بأن‬ ‫أقر‬‫إليه‬ ‫اإلشارة‬ ‫تمت‬
‫ورد‬ ‫حيثما‬
Declaration
I understand the nature of plagiarism , and I'M aware of the
University's policy on this
The work provided in this research , unless otherwise referenced , is
the researcher's own work .
‫الطالب‬ ‫اسم‬‫دغمش‬ ‫نمر‬ ‫صابرين‬Student's Name
‫التوقيع‬‫دغمش‬ ‫صابرين‬Signature
‫التاريخ‬1/5/2018Date

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Dedication
I dedicate this research to colleagues and other members who assisted
and encouraged me in various ways.
To those who taught me patience and determination and it is the first
steps to reach the peaks .. My dear father
To the spring of tenderness for her continuous support in whatever
choose to do in life and for their constant encouragement and on their
understanding., and I sacrificed and patience for my love and affection
and pray .... My mother affectionate
To the souls of the martyrs, the wounded and the prisoners to all those
who contributed to the accomplishment of this work, dedicate the fruit of
this work
To the souls of my martyrs brothers ... Subhi and Salah

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Acknowledgements
I thank Allah for leading our way and to Him all the
credits go.
I would like to take this opportunity to thank
Dr. Belal Al- Bashiti
for supervising research and making valuable
comments and Suggestions to act upon. His kind
guidance and encouragementdrove me to complete
my research efficiently on time.

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List of Contents
Table of content
Address Page
* Dedication I
* Acknowledgment I I
* List of content I I I
* List of Tables V
* Abstract VI
Chapter "1" : Introduction 10
1.1 Background 10
1.2 Researchproblem 12
1.3 Researchvariable 13
1.4 Researchmodel 14
1.5 ResearchHypothesis 15
1.6 Researchobjective 15
1.7 Researchsignification 16
Research scope 16
Chapter "2" :
Literature review
23
2.1 Introduction & Background 17
2.1.1 Definition of Blue Ocean Strategy 17
2.1.2 Blue Ocean Analytical tools 18
2.1.3 Characteristics 18
2.1.4 Principles 22
2.1.5 BOS Framework 24
2.1.6 BOS four actions Framework 24

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2.1.7 Sequence of BOS 24
2.1.8 The concept of economic added value 25
2.2. competitive advantage concept 26
2.2.1 Competitive advantage strategies 27
2.2.2 sequence competitive advantage strategies 27
2.2.3 Competitive advantage Entries 28
2.2.4 Dimension of sustainable Competitive advantage 29
2.2.5 5 Reasons why organizations fail to achieve sustainable Competitive
advantage
31
2.3. previous studies 37
Chapter "3" : Researchmethodology 41
3.1. Introduction 41
3.2. Methodology of the study 41
3.3. Population & Sampling 42
3.4. Tool development and design. 43
3.5. Validity and reliability of the questionnaire 44
Chapter 4
―Findings and Analysis‖
63
4.1. Data analysis and hypothesis's test 63
4.1.
1
Introduction 66
4.2.
2
The relative weight of paragraphs areas 67
4.2 Result and recommendation 88
4.3 Reference 91

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List of Tables
Table (1) the distribution of the paragraphs on the resolution factors
Table (2)
Table No (3)Correlation coefficient of each field and Innovation Index
Table No (4)Correlation coefficient of each field and Increase index
Table No. (5)Correlation coefficient of each field the reduction index
Table No. (6)Correlation coefficient of each field and the exclusion index
Table No. (7)Correlation coefficient of each field and Quality of the product / service
Table No. (8)Correlation coefficient of each field and Creativity
Table No. (9)Correlation coefficient of each field and flexibility
Table No. (10)Correlation coefficient of each field and the cost
Table No. (11)Correlation coefficient of each field and Responding to customers
Table No. (12)Correlation coefficient of each field and Efficiency of the Organization
Table No. (13)Correlation coefficient of each field and Effectiveness of the Organization
Table No. (14)Correlation coefficient of each factor and process criterion
Table No. (15)Cronbach's alpha coefficient
Table No. (16)Normality distribution test

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Data analysis and hypothesis's test
Table (1)sample
Table (2) gender
Table (3) Age
Table (4) job position
Table (5) qualification
Table (6) Years of Experience
Table (7) Study Scale
Table (8) the arithmetic mean and the relative weight for the area of the Innovation Index
Table (9) the arithmetic mean and the relative weight for the area of the Increase index
Table (10) the arithmetic mean and the relative weight for the area of the reduction index
Table (11) the arithmetic mean and the relative weight for the area of the The exclusion index
Table (12) the arithmetic mean and the relative weight for the area of the Elements of Blue Ocean
Strategy Matrix
Table (13) the arithmetic mean and the relative weight for the area of the The exclusion index
Table (14) the arithmetic mean and the relative weight for the area of the Creativity
Table (15) the arithmetic mean and the relative weight for the area of the flexibility
Table (16) the arithmetic mean and the relative weight for the area of The cost
Table (17) the arithmetic mean and the relative weight for the area of Responding to customers
Table (18) the arithmetic mean and the relative weight for the area of Efficiency of the Organization
Table (19) the arithmetic mean and the relative weight for the area of Effectiveness ofthe Organization
Table (20) the arithmetic mean and the relative weight for the area of the dimensions of sustainable
competitive advantage
Table (21) the correlation coefficient
Table (22) multiple regression analysis for regression coefficients
Table (23) Results of tests of differences in averages about (blue ocean strategy)
Table (24) Results of tests of differences in averages

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:‫تعالى‬ ‫قال‬

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Abstract
This study aimed to identify the extent of adoption of the Blue Ocean Strategy in the
pharmacies, and its role in enhancing the competitive advantage.
This has been investigated through the implementation of the blue ocean strategic
indicators, which are innovation, increase, reduction, and elimination, and questioning their
impact on the dimensions of competitive advantage, which are product/service quality,
response to customers, the organization's effectiveness and efficiency, flexibility, cost, and
creativity.
The study used the descriptive analytical approach to describe and analyze the research
problem.
The study population consisted of (40) pharmacies.
The questionnaire was used as a main tool for collecting data in the comprehensive
inventory method, and 35 questionnaires were retrieved.
The study found that there is a remarkably significant interest and approval by pharmacies
on the application of the Blue Ocean strategy indicators.
The study also showed that there is a strong relationship between the Blue Ocean Strategy
and the sustainable competitive advantage.
The study also found that the individual indicators of the Blue Ocean Strategy (innovation,
increase, and reduction) have an impact on the dimensions of competitive advantage
(product/service quality, innovation, flexibility, cost, response to customers, and the
organization's effectiveness and efficiency). As for the elimination indicator, the study found
that it has no impact.
Thus, the study recommended the need to adopt and implement the Blue Ocean
Strategy indicators because of their importance in the creation of new brands and markets
that are free of competition. The study also recommended the application of the dimensions
of sustainable competitive advantage through the Blue Ocean strategy, which contributes to
achieving the sustainable competitive advantage.

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‫الدراسة‬ ‫ملخص‬
‫هدفت‬‫هذه‬‫الدراسة‬‫إلى‬‫التعرف‬‫على‬‫مدى‬‫اعتماد‬‫استراتيجية‬‫المحيط‬‫األزرق‬‫في‬‫الصيدليات‬‫ودورها‬‫في‬‫تعزيز‬‫الميزة‬
‫التنافسية‬.
‫وقد‬‫تم‬‫التحقيق‬‫في‬‫ذلك‬‫من‬‫خالل‬‫تنفيذ‬‫المؤشرات‬‫االستراتيجية‬‫للمحيط‬‫األزرق‬،‫وهي‬‫االبتكار‬،‫الزيادة‬،‫التخفيض‬،
‫والقضاء‬،‫والتشكيك‬‫في‬‫تأثيرها‬‫على‬‫أبعاد‬‫الميزة‬‫التنافسية‬،‫وهي‬‫جودة‬‫المنتج‬/‫الخدمة‬،‫واالستجابة‬‫للعمالء‬،‫وفعالية‬
‫المؤسسة‬.‫والكفاءة‬‫والمرونة‬‫والتكلفة‬‫واإلبداع‬.
‫استخدمت‬‫الدراسة‬‫المنهج‬‫الوصفي‬‫التحليلي‬‫لوصف‬‫وتحليل‬‫مشكلة‬‫البحث‬.
‫تكون‬‫مجتمع‬‫الدراسة‬‫من‬(40)‫صيدلية‬.
‫تم‬‫استخدام‬‫االستبيان‬‫كأداة‬‫رئيسية‬‫لجمع‬‫البيانات‬‫في‬‫أسلوب‬‫الجرد‬‫الشامل‬،‫وتم‬‫استرجاع‬35‫استبيانا‬.
‫وجدت‬‫الدراسة‬‫أن‬‫هناك‬‫ا‬ً‫م‬‫اهتما‬‫ا‬ً‫ظ‬‫ملحو‬‫وموافقة‬‫من‬‫الصيدليات‬‫على‬‫تطبيق‬‫مؤشرات‬‫استراتيجية‬‫المحيط‬‫األزرق‬.
‫كما‬‫أظهرت‬‫الدراسة‬‫وجود‬‫عالقة‬‫قوية‬‫بين‬‫استراتيجية‬‫المحيط‬‫األزرق‬‫والميزة‬‫التنافسية‬‫المستدامة‬.
‫كما‬‫وجدت‬‫الدراسة‬‫أن‬‫المؤشرات‬‫الفردية‬‫الستراتيجية‬‫المحيط‬‫األزرق‬(‫االبتكار‬،‫الزيادة‬،‫والحد‬)‫لها‬‫تأثير‬‫على‬‫أبعاد‬‫الميزة‬
‫التنافسية‬(‫جودة‬‫المنتج‬/‫الخدمة‬،‫واالبتكار‬،‫والمرونة‬،‫والتكلفة‬،‫واالستجابة‬‫للعمالء‬،‫وفعالية‬‫المؤسسة‬.)‫والكفاءة‬.)‫أما‬
‫بالنسبة‬‫لمؤشر‬‫التخلص‬،‫وجدت‬‫الدراسة‬‫أنه‬‫ليس‬‫له‬‫أي‬‫تأثير‬.
‫وبالتالي‬،‫أوصت‬‫الدراسة‬‫بضرورة‬‫اعتماد‬‫وتنفيذ‬‫المحيط‬‫األزرق‬
‫مؤشرات‬‫االستراتيجية‬‫بسبب‬‫أهميتها‬‫في‬‫خلق‬‫عالمات‬‫تجارية‬‫وأسواق‬‫جديدة‬‫خالية‬‫من‬‫المنافسة‬.
‫كما‬‫أوصت‬‫الدراسة‬‫بتطبيق‬‫أبعاد‬‫الميزة‬‫التنافسية‬‫المستدامة‬‫من‬‫خالل‬‫استراتيجية‬‫المحيط‬‫األزرق‬،‫والتي‬‫تساهم‬‫في‬‫تحقيق‬
‫الميزة‬‫التنافسية‬‫المستدامة‬.

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1.Introduction:
1.1. Background:
The pharmaceutical industry in Palestine is one of the promising manufacturing industries. It
has recently started to support the national economy and is one of the most important pillars of
the national economy, one of the promising industries in Palestine in terms of production,
employment and export.
The industry plays a key role in securing basic drug needs for the Palestinian local market.
The vast majority of domestic production is consumed locally in the West Bank and Gaza Strip
market.
The Palestinian pharmaceutical industry has made significant progress in the past two decades.
Investments in this sector are more than $ 70 million invested in this sector in the past seven
years, with the aim of increasing production lines and improving quality to reach international
standards.
Four companies have been able to obtain the manufacturing standard with high Palestinian
quality within the international specifications, which are granted according to the specifications
of the World Health Organization, and two companies have acquired the European certificate of
good manufacturing; the drugs are present in about 20 foreign markets, including Gulf
countries, In addition to the former Soviet Union.
The rapid changes in our world today are the main rules that require these companies to change
and adopt non-traditional ways and means to reach the top of the competitive pyramid between
companies in today's world, especially in light of the advanced technology that made the
exchange of information and knowledge and knowledge It is not difficult, but it is considered
by some to be easy, which has strengthened the entry of new and competitive companies into
the market.
The profitability of any economic sector is determined by the different forces of
competition within it. The superiority of any institution within this sector depends on
adopting an effective competitive strategy that allows it to acquire and maintain a
sustainable competitive advantage that distinguishes it and ensures its superiority over
the other competitors in the long term and successfully confronting its competitors.
Every institution before strategy is to study and evaluate the strategies of competitors to

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be able to know their activities, but there are some believe that this concept has become
relatively old in the eyes of those who advocated the application and adoption of the
Blue Ocean strategy in modern time as many companies looking for New strategies with
innovative approaches away from traditional strategies.
The blue ocean strategy concept is a development of the concept of strategic
management in the evolving and changing world of business,
Although competitive aspects are very important for the firms but keeping more
attention to this issue will make the firms become far away another attributes which is
creating a new market that there is no competitor in that and makes competition
meaningless, this is exact meaning of Blue Ocean strategy (Buisson and Silberzahn,
2010).
Assume that global market is divided by two parts: Blue Ocean and Red Ocean. Red
ocean defines the whole businesses that exist and they are known area of market. In the
red ocean all the boundaries and limitations are obvious and also the play law which is
using in the market is very clear. In red ocean firms try to perform the best to achieve
much more return for their firms due to this fact that red ocean market is very crowded
being lucrative is very hard, to make story short this competitive environment has made
it so bloody and gain profit is very hard for firm to achieve (Parvinen, Aspara et al.,
2011). To add more, in red ocean strategy there are some parameters that play
significant role for existing in business like cost, competition and price, and competition
should be suitable and good enough for expanding the companies’ services and
products. Differentiation is another competitive advantage that makes a lot of cost
because companies compete with the same practice rules (Chang, 2010).On the other
hands Blue oceans are those industries which have not yet been defined, those which are
not exit currently. Blue Ocean is a place with no competitor in it (Totally new market);
therefore this environment is a place with high potential of getting lucrative and
profitable return for those firms which create it. In addition we should consider that
competitive environment does not exist in this market (Burke, Van Stel et al., 2009).
Researchers believe that building Blue Ocean is not a static progress, it is dynamic.
When a firm has competitive advantage, and its better performance shows all the things
imitators show themselves in market. Studies prove that a good blue ocean strategy is
the one that is hard to imitate. The factors which influence on cost structure and value

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proposition and value innovation are firm’s action and strategy. It is obvious that the
most powerful value innovation, will cause the least imitation, and also prevent imitators
to enter market.
Kim and Mauborgne (2015) summarize the difference between the Red and Blue Ocean
strategy.
The first involves competition within the current market area, while the second involves
the creation of unregistered market space. The first also works to defeat the competitors.
The second is to make competition not available. The first focuses on exploiting the
current demand and conducting the analysis of value and cost. And the first is to make the
organization's activities as a whole follow the strategic choice between excellence or cost
leadership. The second is to focus the organization's activities as a whole to seek
uniqueness and cost leadership together. Therefore, (The quality of the product / service -
customer response - the efficiency of the organization - the efficiency of the organization -
flexibility - cost - creativity), which will be clarified in the research board later.
1.2 ResearchProblem:
Many pharmaceutical companies in the Gaza Strip operate in an unstable
environment characterized by constant change, which limits their ability to invest their
technical and marketing capabilities to suit the needs of their customers or even to stand
up and confront large commercial companies in the Gaza Strip. Imposed on the Gaza
Strip for more than ten years and the restrictions imposed on imports and exports
because of the Israeli measures, which requires these companies to make a double effort
to adopt new strategies and innovative methods contribute to overcome the difficult
circumstances surrounding Ha (Ayesh, interview, 2016).
The problem today is that the main problem faced by many companies in the Gaza Strip
is the lack of marketing expertise and knowledge of competitive methods based on
innovation and continuous innovation.
Lack of knowledge of these principles leads to the completion of work The company
and its withdrawal from the market, as mentioned (Almansi, interview, 2016) Member
of the Federation of Industries in Palestine that the most important factors to be taken
care of by pharmaceutical companies to focus on two basic criteria, namely quality and

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price as they contribute significantly to improve the competitive position For the
company, Raslan and Nasr 2011 report that one of the most prominent obstacles facing
business organizations in Palestine is the failure to apply modern administrative methods
and reliance on family expertise, as well as the failure to apply modern and innovative
technological methods, where local products are subjected to fierce competition by
cheap foreign goods that flood the market Local.
Therefore, the pharmaceutical companies in the Gaza Strip will be highlighted and their
adoption of the Blue Ocean Strategy as a modern competitive strategy especially in light
of the rapid changes and changes in the business world. This strategy aims to achieve
sustainable competitive advantage through the exploration of the principles and
indicators of the ocean strategy Blue and its impact on Pharmaceutical companies, so
the problem of research in the main question is the following:
1.3 Researchquestion:
What is the role of the Blue Oceanstrategyin enhancing the sustainable
competitive advantage of pharmaceutical companies in Gaza Strip?
From which the following questions emerge:
1. How far is the blue ocean strategy adopted by the following indicators
(innovation, increase, redundancy, reduction) in the pharmaceutical companies
in the Gaza Strip?
2. Is there a relationship between Blue Ocean strategy and sustainable
competitive advantage?
3. To what extent the blue ocean strategy indicators (innovation, increase,
redundancy, and downsizing) affect the competitive advantage of companies?
4. Are there statistically significant differences at the level of α0.05 between
respondents' responses to the extent of adoption of the Blue Ocean strategy due
to personal demographic characteristics (job title, gender, age, scientific
specialization, degree, years of work experience) and demographic
characteristics Related to the company (age and experience of the company)?

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1.4 Research Variables:
Research variables of the study are the following:
1. The dependent variable: Sustainable competitive advantage the sustainable competitive
advantage dimensions include: (product / service quality, customer responsiveness,
organization effectiveness, organization efficiency, flexibility, cost, innovation).
2. Independent variable: Blue Ocean Strategy with the following indicators: (Factor of
Innovation - Factor of Increase - Reduction Factor - Exclusion Factor) (Kim & Mauborgne
2015)
1.5 ResearchModel
Figure (1):
Independent
variable:
Blue Ocean
Strategy
dependent
Variable:
Competitive
Advantage
 The factor of
innovation
 Increase factor
 Reduction factor
 Exclusion factor
 Product /
service quality
 Responding to
customers
 Effectiveness
 Efficiency of the
organization
 Flexibility
 Cost
 Creativity

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1.6 Research Hypotheses:
The first hypothesis:
There is a statistically significant relationship at the level of α<=0.05 level between the
blue ocean strategy in terms of its individual indicators (innovation - increase - reduction
- redundancy) and sustainable competitive advantage in its dimensions combined.
The second hypothesis:
There is a statistically significant effect at the level of α <= 0.05 for blue ocean strategy
indicators (increase index - exclusion index - reduction index - innovation index) to
adopt the sustainable competitive advantage of pharmaceutical companies in the Gaza
Strip.
The third hypothesis:
There were statistically significant differences at the level of significance of ( α <= 0.05
)between respondents' response to the extent of adoption of the blue ocean strategy due
to personal demographic characteristics (job title, sex, age, scientific specialization,
degree, years of work experience) and demographic characteristics Company and its
expertise).
1.7Research Objectives:
1. Recognize the extent to which food companies adopt the Blue Ocean Strategy as a
competitive strategy through which gaps that are not addressed by competitors are
discovered.
2. Identify the extent to which competitive advantage is achieved by employing the
dimensions of sustainable competitive advantage (product / service quality, customer
response, effectiveness and efficiency of the organization, flexibility, cost, innovation)
through the adoption of the blue ocean strategy.
3. Test the relationship between blue ocean strategy indicators (innovation - increase -
redundancy - reduction) and sustainable competitive advantage.

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4. Study the impact of blue ocean strategy indicators (innovation index - increase index -
reduction index - exclusion index) to adopt the competitive advantage of sustainable
pharmaceutical companies in the Gaza Strip.
5. Study the differences between respondents' response to the extent of adoption of the
blue ocean strategy which is attributed to the personal demographic characteristics (job
title, gender, age, scientific specialization, degree, years of work experience) and the
demographic characteristics related to the company (age and experience of the company
1.2Research Significance:
 Scientific importance: the importance of the study is limited, in that it is an attempt
by the scientific attempts that seek to identify t the role of the Blue Ocean strategy in
enhancing the sustainable competitive advantage of pharmaceutical companies .
 Practical importance: This study addresses a vital and important subject that the
previous studies have not provided as required, and this study provides a practical
analysis of identifying the role of the Blue Ocean strategy in enhancing the
sustainable competitive advantage of pharmaceutical companies.
1.3 Research Scope:
 Human Scope: pharmacist who work inside the pharmacies.
 Location Scope: Gaza strip
 Time Scope: 16 February-2 May of 2018.
 Sample : random sample .

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2.1 Introduction and Background:
2.1.1 Definition of Blue Ocean Strategy
BOS is a strategic approach of disruptive innovation. The goal of BOS is to create a new market
space (Blue Ocean) yet keep costs low, but not to out-perform the competition in the existing
industry (Red Ocean). The main ideas of BOS are all about value innovation: promoting value
for buyers while driving down costs for companies. Dialing up value for buyer means raising
and creating elements the industry has never offered. Reducing costs stands for elimating and
reducing the factors of current industry competition, and achieving scale economies via higher
sale volume. It tells firms that the best way to beat competition is to capture new demand, make
the competition irrelevant, break the value-cost trade-off, and align the whole system of a firm’s
activities in pursuit of differentiation and low cost. (Kim et al., 2005, Page 1-3).
BOS gives a key question to entrepreneurs: Why do some companies succeed in creating new
market space while others fail? The book found: first, the great firms fail because they are
short-sighted on existing market and reluctance of change.
Second, the profit and growth consequences of creating new market spaces are significantly
higher. And third, market spaces can be created by all types of companies in all types of
industries (ibid.).
2.1.2 Blue Ocean Analytical tools
Strategic canvas is a diagnostic tool of building up a BOS. Drawing a productive strategic
canvas need to get three things done. Firstly, it should show the strategic profile of an industry
by listing the factors very clearly (including possible future factors) that affect competition
among industry players. Secondly, based on listed factors and strategic profile of current and
potential competitors, manager should identify which factors they invest in strategically.
Finally, drawing the value curve to show details of how strategy canvas invest in factors in the
current competition, even in the future (Kim et al., 2005, Page 23-45)
Four actions framework: To craft a new value curve, managers usually have to anwser four
questions, so called here the four actions framework:
1) Eliminate: which of the factors that the industry takes for granted should be
eliminated?

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2) Reduce: which factors should be reduced well below the industry’s standard?
3) Raise: which factors should be raised well above the industry’s standard?
4) Create: which factors should be created that the industry has never offered?
The Four actions framework is a key tool to identify the actions towards creating a new value
curve. Eliminate and Reduce represent the factors that manager should reduce and eliminate
strategically thus reducing costs, Create and Raise are the factors that manager should invest in
(ibid.).
2.1.3 Three characteristics:
Finally, a good BOS should consist of three characteristics, they are focus, divergence, and a
compelling tagline.
Specifically, company should not diffuse its efforts across all key factors of competitions, but
instead shaping of its value curve diverges from other players based on looking across
alternatives, until the compelling tagline is clear and relevant (ibid.).
2.1.4 Six Principles to create a BOS
There are six principles of formulating and executing BOS that allow companies
to break from the competition and unlock uncontested market (Blue Ocean). The
six paths are attempt to redress six assumption's that keep companies competing in
red oceans (Kim et al., 2005, Page 45-47). Specifically, six assumptions are
showed as following:
1) Define their industry similarly and focus on being the best within it
2) Look at their industries through the lens of generally accepted strategic groups, and
strive to stand out in the strategic group they play in
3) Focus on the same buyer group, be it the purchaser (as in the office equipment industry),
the user (as in the clothing industry), or the influencer (as in the pharmaceutical
industry)
4) Define the scope of the products and services offered by their industry similarly

10
5) Accept their industry’s functional or emotional orientation
6) Focus on the same point in time—and often on current competitive threats in
formulating strategy
The six principles will be introduced separately in details to correct above assumptions (ibid.).
1. Principle: the SIX PATHS to reconstruct market boundaries:
The first principle of BOS is to reconstruct market boundaries, which is try to solve search risk
many firms struggle with. Based on this issue the book found six paths framework to remarking
market boundaries instead of looking within these boundaries. Specifically, to break out of the
accepted boundaries, top management should look across alternative industries, across strategic
groups, across buyer groups, across complementary product and service offerings, across the
functional-emotional orientation of an industry, and even across time (Kim et al.,2005, Page 47-
80).
PATH 1:
Look across alternative industries: means that the company doesn't only competes with other
companies in same industry but also with those other companies in various industries that
produce alternative products or services. But what do alternatives mean? In the one hand,
products or services have various forms but provide the same function, which means these
products or services are largely subsites for each other. In the other hand, alternatives also mean
products or services that own different functions and forms but the same purpose.
PATH 2:
Look across strategic groups within industry: just as BOS can often be used by looking across
alternative industries, they can be unlocked by looking across strategic groups. Strategic group
stands for a group of companies within an industry that peruse a similar strategy. The
determination of same strategy group are mostly based on 2 dimensions: price and performance.
In this respect, the key to look across existing strategic groups is to break out of narrow field of
vision by understanding which factors determine customers’ decisions to trade up or down from
one group to another.
PATH 3:
Redefines the industry buyer group: In reality, for most industries it’s hard to find a definition

11
of who the target buyer is, though, there are chain of buyers who directly or indirectly involved
in the actual perchase decision. These chain of buyers are involved in purchasers, users and
important influencers.
Somehow these three groups may overlapp, but they often differ. Thus, managers should
redefine the industry buyer group, but not only focus on buyers.
PATH 4:
Look across to complementary product and service offering: In most cases, some other
products or services for a company, which not belong to their core products or servicies, affect
their customers’ purchasing behaviors. So, finding untapped value in complementary products
and services is a key to define total solutions. That is, manager should think about what happens
before, during, after the products or services are used and offered. Most importantly, they have
to find what are the pain points and how can they eliminate them through a complementary
offering.
PATH 5:
Rethink the functional-emotional orientation of the industry: Except for products or services,
companies in an industry also compete on appeal. The appeal is usually divided in rational
appeal and emotional appeal, specifically, some industries compete strongly on price and
function, other industries compete principally on feelings. In order to create a blue ocean,
manager should redefine or challenge functional-emotional orientation of their industry, which
means if their companies compete on emotions in an industry, the managers have to find the
elements that perhaps can stripe out to become more functional and vice versa.
PATH 6:
Participates in shaping external trends over time: Most industries or companies are subject to
external trends or einrivoments. Based on observable current insights, proactively identifies
how trends will change value to customers over time is a key question can show manager how
to create a blue ocean opportunities. Decisive to business, irrevesible and clear direction are
three principles, which are critical for company to assess trends over time. Managers should
know how will these external factors impact the industry and how can they leverage them?
2. Principal: focus on big picture, beyond numbers
. This principle is trying to mitigating the planning risk of investing a lot of efforts, time, capital
and resources but achieving only tactical red ocean moves. It tends to reach a common

12
understanding of current position and where to head to based on drawing a strategy canvas.
This approach will align the creativity of a wide range of people within an organization, bring a
strategy the best practices communicated across business units, make the strategy easy for
execution, until blue ocean be created.
In order to unlock people’s creativity, the process of creating BOS involves a lot of visual
stimulation, which has four major steps, they are visual awakening (As- Is Analysis), visual
exploration (6 paths framework & identify divergent factors), Strategy fair (4 actions
framework & To-Be strategic), and visual communication (before-and-after comparison &
focus). Specific to corporate strategy, manager can use the pioneer-migrator-settler map as
visualization tool for mapping growth potential of portfolio (Kim et al., 2005, Page 81-100).
3. Principal: Reach beyond existing demand.
In most cases, as companies used to embracing customer preferences through finer
segmentation in a competitive environment, they often face the risk of creating too small target
markets. This principal is trying to minimize the scale risk by maximizing the demand for a new
offering. To accomplish this, manager should challenge two conventional strategy practices of
focusing on existing customers and finer segmentation, instead accommodating buyer
preferences and thinking commonalities over differences; noncustomers before customers; and
DE segmentation before perusing finer segmentation. Unlocking noncustomers offers big blue
ocean opportunities , there are three tiers of noncustomers that can be transformed into
customers based on differ of their relative distance from target market, they are “Soon to be”
noncustomers (tier 1), “Refusing” noncustomers (tier 2), and “unexplored” noncustomers (tier
3). All in all, manager should not focus on a specific tier but should look across tiers instead.
The rules here is to focus on the tier that represents the biggest catchment at the time in their
industry. But they should also explore whether there are overlapping commonalities across all
three tiers of noncustomers (Kim et al., 2005, Page 101-116).
4. Principal: Get the strategic sequence right.
This principal is trying to put forward the strategic sequence and validate a commercially
viable blue ocean idea.
Company should build it’s BOS in the sequence of buyer utility, price, cost and adoption (Kim
et al., 2005, Page 117-146).
5. Principal: Overcome key organizational hurdles.

13
Compared with red ocean strategy, BOS represents a big difference from the status quo. So the
challenge of execution exists, which brings four hurdles.
The first hurdle is from cognitive: waking those employees up whom feel uncomfortable of
shifting certain strategy.
The second hurdle is limited resources. The third is motivational hurdle due to unmotivated
staff. The final hurdle is politics, any reform will bring opposition from some powerful vested
interests. But tipping point leadership is a productive approach to overcome these four hurdles
fast in executing a break from status (Kim et al., 2005, Page 147-171).
6. Principal: Build Execution into Strategy.
A successed execution of BOS is not only up to top management, but to everyone from the top
to the front lines. The more removed people are from the top and the less they have been
involved in the execution of the strategy. This principal can help managers to minimize the
management risk of distrust, noncooperation and even sabotage, so introduction of a fair
process is a key part in executing of strategy. There are three core elements that define E
principles of fair process: engagement (involving individuals into strategy), explanation
(everyone should be explained), and clarity of expectation (state clearly the new rules of the
game) (Kim et al., 2005, Page 171-185).
2.1.5 BOS-framework:
To enable the identification of an uncontested market in the EFVI, we first developed and
detailed the logic of the BOS by establishing an encompassing BOS-framework.
We systemically build the BOS-framework by reviewing the related publications of Kim and
Mauborgne (2005a), with a focus on the 2005-book entitled “Blue Ocean Strategy”.
Kim, W.C. and Mauborgne, R. (2005a), “Blue Ocean Strategy: from theory to practice”,
California
Management Review, Vol. 47 No. 3, pp. 105-21.
Already crafting this framework may provide added value to the reader, because Kim and

14
Mauborgne did not provide a detailed framework as Porter did with, e.g. his Porter’s Five
Forces Model. An explanation may be that the BOS is more differentiated, and takes into
account many diverse aspects of strategic management aspects, such as taking the consumer
perspective (buyer utility map) to develop a strategic management-orientation that satisfies their
needs.
Essential building blocks in the encompassing BOS-framework as we developed it, are the
Business Analysis, the Strategic Canvas, the Six Searching Paths Framework (SSPF), the Four-
Actions-Framework (FAF), and the so-called Sequence of the BOS (SBOS). The conceptual
aim is to identify a commercially viable value innovation, which entails the simultaneous
pursuit of differentiation and low costs (Kim and Mauborgne, 2005c).
Kim, W.C. and Mauborgne, R. (2005c), “Value innovation: a leap into the Blue Ocean”,
Journal of
Business Strategy, Vol. 26 No. 4, pp. 22-8.
Evidently, this combined pursuit of business strategies fundamentally counters the generic
strategies of Porter (1980, 1985), but suits the Strategy clock-concept by Faulkner and Bowman
(1995). But first, how are these four building blocks related?
We will now develop the logic of the BOS-framework, by detailing and relating its four
essential building blocks, but starting with detailing the characteristics and functionality of the
strategic canvas. The strategic canvas is a diagnostic and action framework for building a
compelling BOS (Kim and Mauborgne, 2005a).
The strategic canvas is a diagram where on the horizontal axis the taken for granted business
factors are named which the industry competes on and invests in. On the vertical axis, the
offering level that buyers receive across the granted business factors is ranked from low to high.
The line connecting the offering level of each business factor is called value curve (Kim and
Mauborgne, 2005a).
Kim, W.C. and Mauborgne, R. (2005a), “Blue Ocean Strategy: from theory to practice”,
California Management Review, Vol. 47 No. 3, pp. 105-21.
The Business Analysis focuses on two areas. The business analysis is executed, first, to identify
the taken-for-granted Business Factors (BFs), on which the competition base. For example, in
the wine industry price, use of enological terminology, marketing, aging quality, vineyard
prestige and legacy, wine complexity and wine range prevail as such Business Factors (Kim et

15
al., 2009).
Kim, W.C., Mauborgne, R., Hunter, J., Marks, B. and Mortensen, W. (2009), “Crafting winning
strategies in a mature market: the US wine industry in 2001”, Harvard Business Review, July 1,
p. 9.
Second, the execution of the business analysis allows one to identify the most suitable searching
paths to a new market space. For example, low-budget airlines combined the positive effects of
traveling by train and by car to create a new market. In that manner, they focused on attracting
new buyer groups, the third of the six so-called “searching paths”, now to be explained.
2.1.6 Four-actions-framework
The Four-Actions-Framework implicates four possible actions either to create new value for the
buyer or to increase the buyer utility considering the new business concept, derived by means of
the SSPF (Kim and Mauborgne, 2004a). The aim of the authors is to pursue both differentiation
and low cost by Reducing, Eliminating, and Raising already existing taken-for-granted-
Business Factors (BFs), and additionally Creating new ones (Leavy, 2005). “Reduce” and
“Eliminate” are focused on BFs which are taken for granted (Leavy, 2005), with the aim of
reducing costs compared to competitors (Kim and Mauborgne, 2005a). One should “Eliminate”
BFs which deliver no added value for the new business concept. BFs are “Reduced”, when they
still add to the success of the new business, but may have a slightly lower prominence. In
contrast, “Create” and “Raise” are focused on facilitating actions delivering added value and
superior performance (Leavy, 2005).
The action “Raise” is restricted to taken-for-granted-Business Factors, which should be raised,
because, although hardly valued by the industry, they have a significant influence on the buyer
utility. Finally, the creation of factors is required when one needs to establish a new source of
value for the buyer. Raised and created BFs mainly promote the differentiation focus. They
enable the realization of the characteristics of the new business. In summary, the incentive
behind the FAF is to increase the buyer’s revenue and to generate new demand (Leavy, 2005).
By means of the Four-Actions Framework one can derive the key success factors for the new
business concept.
Leavy, B. (2005), “Value pioneering – how to discover your own ‘Blue Ocean’: interview with
W. Chan Kim and Rene´e Mauborgne”, Strategy & Leadership, Vol. 33 No. 6, pp. 13-20.

16
2.1.7 Sequence of Blue Ocean Strategy
Finally, the so-called Sequence of BOS (SBOS) evaluates the new business systematically on
the following four items: buyer utility, price, cost, and organizational adoption, e.g. cognitive or
motivational challenges. If and only if all four hurdles can be overcome then the product or
service is a commercially viable Blue Ocean-idea, a feasible value innovation. For reasons of
space and priority we will not detail this SBOS here any further.
In principal, the encompassing BOS-framework with the five essential building blocks supports
the identification, and determination of old and new taken-for-granted-Business Factors, the
new business concept, the related new key success factors, and the assessment of the newly
identified product or service.
Having established the detailed logic integrating the different tools comprising the Blue Ocean
Strategy-framework, we are able to investigate the strength of the BOS-framework applying it
to the saturated EFVI. But first the research methodology is to be introduced.
2.1.8 The Concept of Economic Added Value, and Its Advantages and
Disadvantages:
The foundation philosophy of economic added value is that investors expect reward for
providing financial sources and bearing business risk. Operating profit of the company should
outpace the cost of capital to create value for shareholders. In calculating accounting profit,
only the financial cost is considered through debt and managers assume funds provided by the
shareholders without cost. But in the concept of economic added value, the cost of financing
through shareholders is also considered, because money does not enter company automatically
and each value has a cost. Among all approaches for measuring performance, approach based
on residual income and economic added value, has attracted the most attention.
Stewart believes that earnings, earnings per share and earnings growth, are misleading
measures of firm performance and among this economic added value are the best criteria for
performance evaluation. A company that for years has a positive economic added value causes
the shares to be sold only and to create value for shareholders, but if the company is not able to
earn returns over cost of capital, not only does not create value for shareholders, but also causes
the loss of value (Young 1997).

17
A company’s market value equals to its total market value of equity and market value of debt.
Economic added value is the difference between the total market value of the business unit and
its economic capital.
Unlike the rate of return that reflects only the result of a period, the market added value, is a
cumulative measure of corporate performance. This measure shows how the company has
planned its capital.
Son the primary goal of any company should be to maximize the market value added. Of
market value added benefits is to show how a company successfully has used its capital and
predicted the future profit opportunities (Kramer & Peterd, 2001).
kramer, J. k. and J. R. Peterd (2001). ''An Interindustry Analysis of Economic Value Added as a
proxy for Market Value Added''. Journal of Applied Finance , Vol. 11, Issue 1, 45-50.
2.2 Competitive advantage concept:
The developments in the business environment have been driven by rapid and rapid scientific
and technological progress. There has been a growing interest in sustainable competitiveness
and its importance in business organizations of all kinds to cope with rapid changes and to cope
with rapid developments. Competitive competitive advantage means different and different
things for business organizations. Customers, or competitors, and may be due to a low price or
desirable characteristics, or to different resources owned by an organization without other
organizations.
(Porter & Day) asserts that competitive advantage is a strategic goal and that it stems from
within the organization and is valuable, long-term, fast-paced, renewable and can be developed.
Others define it as an investment of financial, human and technological resources to produce
value for customers that meet their needs and excellence from competitors.
Some also spoke about the types of competitive advantages organizations might have (Barney,
2006)
It is classified according to time period. It is a competitive advantage with extended time
periods where the organization can create a greater value than competitors, and competitive
advantage with a short period of time, which is quickly imitated from competitors called
temporary competitive advantage.

18
2.2.1 Competitive Advantage Strategies:
Business organizations conduct different competitive strategies to shape and shape the direction
that the organization must take to achieve competitive advantage in accordance with changes in
the environment, competition between firms and the complexity of markets under economic
openness. Thompson & Strickland (2003) defines it as " In order to attract customers and bear
competitive pressure and improve its position through the struggle with competitors and
achieve competitive advantage.
Porter defines it as building and building defenses against competitive forces, or finding a
position in the industry. Each organization has a comprehensive competitive strategy, which is a
mixture of goals used and means to achieve these goals, and a set of behaviors that lead to
continuous and continuous advantage over competitors.
2.2.2 Sources of Competitive Advantage:
The competitive advantage is achieved by connecting the internal capabilities of the
organization with external capabilities, which means that the sources of competitive advantage
are internal and are the capabilities, skills and resources of the organization. Externalities are
the public environment as well as the open system of the organization from inputs, processes
and outputs (Pitts & Lei, 1996)
As follows:
1. Internal sources: Resources related to the organization's resources such as factors of
production, distribution channels, activities and skills. The competitive advantage is achieved
by the organization's use of its strengths to carry out its activities to generate value that
competitors can not achieve through the use of unique resources.
2. External sources: The external environment and its variables constitute a source of
competitive advantage. The external environment includes a range of political, economic,
demographic and technological factors that affect the organization negatively or positively.
Strategists believe that successful organizations are outward-oriented as they take their
positions on the client and the market.

19
2.2.3 Competitive Advantage Entries:
The sources and portals of maximizing the Organization's competitive potential are its
resources; that is, human resources, financial resources, material resources, as well as
technological resources. There are several approaches to the competitive advantage, including
the resource-based approach that includes FAO resources and core resources associated with the
Organization, Knowledge Based Approach Knowledge has played an active role in the success
of organizations and their transformation into the knowledge economy, which has enabled
organizations to cope with competition. The organization also has to focus on the underlying
concept of the value chain, which is to add as much value as possible The lowest possible cost
and the measurement of the contribution of the value provided and the profit for each part of the
chain, which is based on value analysis, as well as the introduction of strategic analysis, which
deals with the analysis of internal and external environment factors, and the last entry of the
structure of the industry, which shifted from the focus on general environmental analysis to the
industrial analysis of competitors Which aims to determine the degree of attractiveness of an
industry to current or future producers as well as to identify key success factors in the industry.
Organizations should understand the nature of their competitive strategy and their competitors.
Opportunities to understand the competitive forces, known as the forces of competition and
Porter, which sets the rules of competition and the extent of the organization's ability to profit-
taking and reminds them (Wheelen & Hunger, 2008) (Kotler & Armstrong, 1999)
As follows:
1. Entry of new or potential competitors: Existing producers are trying to place many barriers
to avoid entry of new competitors to the market, which could threaten their survival in the
market or may affect their market share, because it will be distributed to the entrants in the
market, which is a threat to them.
2. The bargaining power of buyers: This is a threat to the industry on the other hand through
buyers seeking to reduce prices and negotiate on the required quality and additional services.
These activities may reduce the profitability of the organization. The buyers are very influential,
depending on the characteristics of that category in terms of Purchase made by that category,
nature
(Product is differentiated or not distinct, cost).

20
3. The bargaining power of processors: The category of suppliers or processors is of great
importance in the industry, with the effect it may have on the provision of raw materials for
services or products such as the threat to raise prices, the importance of their sales and
characteristics or the reduced quality of goods or services purchased.
4. The threat of alternative products: the products of other industries that can satisfy similar
needs to customers, and alternatives may pose a threat to many organizations to achieve profits
as well as maintain market share.
5. Competition between current organizations: There are various forms of competition
among organizations. Price competition, complementary services, and customer commitments
may be competitive. Price competition affects the profitability of the organization. Several
factors influence the intensity of competition.
2.2.4Dimensions of sustainable competitive advantage:
1. Product / Service Quality:
Quality is a changing situation and is related to the state of the product or service provided as
well as individuals, processes and the environment as well as the needs of the customer.
Armstrong (2009) considers quality to be the satisfaction of customers and is the basis for
achieving sustainable competitive advantage. The old concept was to focus only on the
characteristics of the product or product, and achieving quality in all areas of work is a difficult
task, making things more difficult, especially as customers change their perceptions of quality.
Evan (1993) set out the quality dimensions of the product or service (performance, body,
durability, serviceability, reliability) and (Krajwaski & Rizman, 1999) defined it (conformity of
specifications, value, conformity to use, support, (Lovelock & Wright 1999) with five
dimensions (reliability, sensitivity, responsiveness, precision, care). These dimensions represent
a competitive strategy that enables the organization to link competition with market conditions
on the one hand, consumer requirements, and the activities of the organization on the other.
2. Customer Response:
Achieving and maintaining loyalty is a necessary foundation for sustaining the competitive
advantage of the organization. One of the key ways to enhance the competitiveness of the
organization is to continue to deliver new services of better quality and faster response than

21
competitors to meet the needs and needs of its customers.
3. Efficiency and effectiveness of the organization:
First: Efficiency of the Organization:
Efficiency refers to providing the highest value to the customer for what the customer thinks is
appropriate for that value
It also means the ability to adapt to and stay in the environment (Johnson & Scholse, 1997),
which represents the efficient use of available human, financial and physical resources
(Browan, 1996).
Productive efficiency means the continuous improvement of the capacity of the production
component to increase production as well as the possibilities available. It focuses on increasing
production or improving its quality or reducing the waste of the materials used in the available
resources. The development of creativity reduces costs and high production and adds value to
the customer(Adams &Lamont, 2003)
Johnson & Schole (1997) noted that efficiency can be achieved from
During the reduction of costs, through several factors, including:
- Economies of scale: This is the high productivity of the organization, which helps to reduce
the cost of one unit of the product.
- Process design or product: Includes evaluation of efficiency in the production process.
- Experience and learning: The more the individual learns the efficient and the better way to
carry out the productive task, the greater the productivity of the organization, the less costs, and
the better ways of learning through avoiding learning and avoiding errors at a time.
Second: the effectiveness of the organization
Business organizations are effective when they can achieve their objectives through the means
as the ability of the organization to establish the resources available to them, as defined by Daft
(2001) as the ability of the organization to available resources and use them efficiently to
achieve limited goals.
According to Cherniss (2002), efficiency is only a reflection of the Organization's negotiating
ability to invest opportunities and obtain scarce environmental resources.
Jones (1984) recognized that organizational effectiveness is the capacity of the organization to

22
satisfy the needs of its beneficiaries and its impact on its survival.
4. Flexibility:
Flexibility is an important competitive dimension at the level of business organizations because
it highlights the organization's ability to adapt to customers' needs and expectations, as well as
creativity in developing its internal resources and adapting to the external environment.
Dilworth (1992) defines it as the organization's capacity to respond to production capacity And
product mix.
Ivan (Evan, 1997) points out that many organizations use flexibility as a competitive weapon
by expressing capacity and adaptability to changing environment conditions. In )Heizer's,
2001(, the possibility of making substantial changes in the market location Which depend on
creativity, design and sizes.
5. Cost:
Reducing the cost of production or final product is one of the priorities most products seek,
because they are reflected in the final price of the product or service. It also gives the
organization a high competitive advantage, especially in markets where the consumer has a
high price sensitivity. )Dilworth, 1996), which distinguishes the cost-focused organization to
achieve a competitive advantage by reducing its capital and labor force and allocates its
operations to competitors in the market.
1. Cost of manpower
2. Cost of equipment, facilities and technology.
3. Cost of raw materials.
Achieving the advantage requires competition for the organization by determining the cost of
raw materials and other labor costs in order to design a production system that reduces the cost
of one unit. Porter (1996) believes that the institution can achieve competitive advantage by
reducing the costs of its value- With the same competition, which makes it able to impose a
price lower than the price of competitors with the same level of profit, or achieve greater returns
if competitors resort to similar prices.
6 - Creativity:
Martin (1998) recognizes that strategic innovation is more than just producing new and exciting
products. It is important to be a cornerstone of the overall strategy. When innovation is built

23
into strategic paths, it will certainly create a competitive advantage that is hard to imitate.
- Creativity is a force for small organizations that compete with large organizations.
- Creativity is the key to the output of small organizations that are looking for success to
compete.
- Enhancing the competitiveness of the organization.
- Organizations are able to innovate continuously through the competitiveness of the
organization.
2.2.5 Reasons why organizations fail to achieve sustainable competitive
advantage:
There are many reasons why business organizations fail to achieve competitive advantage,
which is lost by profit-taking and the deterioration of their competitive position
Hill & Jones (2008) notes that there are three main reasons for failure to achieve sustainable
competitive advantage:
1. Idle: It refers to the difficulty of changing organizational strategies and structures and
adapting to environmental change, especially in dynamic environments, as well as the presence
of those who have the power or influence that may impede change and innovation in the
organization, which is a threat to the collapse and failure of the organization.
2. Commitments to the previous strategy: Adhering to predetermined previous strategies and
not keeping up with dynamic market developments may have resulted in the loss of competitive
advantage.
3. ECARIS: A Greek myth that reflects the failure of an organization if it follows its own path
of success and relies on its current strategy and does not change its strategies with the dynamic
development of the market, it quickly falls short of future market demands and customer
expectations. And the difficulty of maintaining a sustainable competitive advantage, Hill and
Jones (2008) believe that FAO should use several tactics to avoid failure:
- Focus on building barriers to competitive advantage.
- Improvements and continuous learning.
- Find the best industrial applications.
- Overcome idle.

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2.3 Previous Studies on Blue Ocean Strategy:
1- Sharma & Seth & Niyazi (2010) “ Blue Ocean Strategy: A vehicle for Entrepreneurship
Development and Economic Growth in Rural Areas”:
The study aims at identifying the impact of leadership in the economic development of the local
community through the blue ocean strategy perspective and emphasizing the use of this strategy
at different levels in the rural / rural rural markets.
The study used a sample of companies operating in the market to find non-competitive rural
markets. The results of the study confirmed that there is a close relationship between the
concept of entrepreneurship and the close association with the philosophy and principles of the
Blue Ocean strategy. The study also showed that the pioneering spirit of developing rural
markets in India can be found or Implemented through the effective use of the Blue Ocean
Strategy.
The study also focused on improving the market situation in terms of improving financial
transactions by providing the best services to rural villages, and considered that providing the
best services and improving the market situation of villages Rural areas should be seen as a
matter of social responsibility, and the study considered that the size of the market is an asset
owned by the company.
2- Burke & van Stel & Thurik (2008) “Blue Ocean versus Competitive Strategy: Theory
and Evidence”.
The study aims at framing the theoretical contribution of the blue ocean strategy and the search
for experimental power using a broad industry analysis. Previous studies did not make a clear
difference between using the strategy over the long term and across the short term.
The study aims to contribute to two main elements: First, there is a methodology to test the blue
ocean strategic strategy versus the short-term (long-term) Red Sea strategy. This methodology
will provide a general outline so that the appropriate strategy can be defined based on the time
period.
In order to facilitate the understanding of the study and its results, the researchers developed the
theory of the beach, which is a combination or a common framework between the two strategies
for comparison purposes. It is also an effective and easy way to communicate with the public.

25
Competitiveness based on long term time appears in the Blue Ocean, the model explained that
the Blue Ocean and competitive strategies are not necessarily alternatives to a separate choice
but may be complementary to each other.
Burke, A., Tugrik, R., Stel, R. (2008) “Blue Ocean versus Competitive
Strategy: Theory and Evidence”. Zoetermeer.
3- Silva (2008) “BANKING FORESIGHT: BLUE OCEAN STRATEGY FOR
INTEGRATED DEVELOPMENT”.
The study aims to contribute to the development of Sri Lanka's banking sector by creating areas
outside competition with other banks through future growth and challenging the status quo
through various strategic ideas.
Where the study was conducted on Sri Lanka's banking sector, where the banking sector plays
an important role in advancing the economic development of Sri Lanka, especially after three
decades of conflict.
Banks are operating in an overcrowded environment of competition and congestion. In the
search for profits and sustainable growth, banks seek to find a competitive edge and
differentiate services offered to increase their market share.
The study recommends that the value added of financial solutions provided by banks that open
local and global horizons to the Sri Lankan economy be developed, as well as training and
knowledge resource development to meet the new challenges in the banking sector. The study
recommends that the Blue Ocean strategy be implemented to break out of the traditional system
and find market space free of competitors.
Silva, V. (2008). Banking Foresight: Blue Ocean Strategy for Integrated
development, P131-146.
4- Zhao, Jinwei (2010). “ Application of Blue Ocean Strategy to Chinese 3G Mobile
Telecom Industry”.
The aim of the Blue Ocean Strategy was to implement the third-generation Chinese mobile
phone company. The researchers used the Porter's five-power model to analyze the competitive
environment of the company. Eleven factors were identified in the company's competitive
advantage: network quality, network coverage, Other network services - Convenient network

26
software - Suitable for network devices - Pay rate for quality given - Ease of use - Traditional
mobile phone functions - Internet charting tools and mobile internet service provider.
The researchers used the questionnaire to analyze the factors that are most important and
important for the participants and the Internet service. The researchers also used the Blue Ocean
strategy matrix (increase - reduction - exclusion - innovation) to create a new market space for
the Internet.
The two researchers found a number of modifications to the services provided by the company
by meeting the requirements of the Blue Ocean strategy, namely: the development of the mobile
phone service to provide it as a basic service and the promotion of other complementary
services such as network services, coverage rate, prices given for the appropriate quality,
Reduce the cost of investment services such as Internet graphic planning tools, network quality
and traditional job resource displacement in traditional mobile phones for other areas.
Finally, the researchers recommend Chinese companies to seize the space of the new market
for mobile phones "3G".
5- (Georgiana, 2010) Blue Ocean Strategy as instrument of underpinning
entrepreneurial initiatives.
The aim of the study is to focus on the diagnosis of the competitiveness of the corporate spirits
chain in Romania, in order to determine the preconditions of the strategic trends of the spirits
market through the Blue Ocean methodology.
The study found that the competition in Romania in the sector of spirits has increased
significantly in recent years, which leads to finding a new strategic direction to create a market
space free of competitors, has been through the study to know the quality standards that must be
available spirits from the perspective of the buyer Or the customer that helped build the strategy
matrix needed to implement the Blue Ocean Strategy. Elements of the strategy matrix were
applied to identify elements that could be removed and retained the important elements that
needed to be developed for Friesent. And reduced the cost of storage for spirits by eliminating
this element permanently and reducing the investment capital related to the life span of the
products, which increased the value of the cash flow of the company, and added a new element
to the curve Its value is the ease of use, selection and unique taste so that the purchase decision
is very easy for the customer, especially the youth group, which provided them with unique

27
features of the product such as (dense foam of drink - high degree of feces - acid taste of drink -
Thus, the company has achieved a great satisfaction for the needs of a group of customers,
especially for youth, thus creating a market space free of competition. The study recommended
that new strategies should be used to justify the market needs and respond to customers' needs.
6- Nityananda, Mohanty(2012) " Strategic Entrepreneurship: Key toSuccess For
Competitiveness & Globalization "
The study aimed to examine or test the creativity of strategic entrepreneurial projects adopted
by innovating entrepreneurs and highlight what could be the cornerstone of their
competitiveness as well as a source of globalization, growth and sustainability in the changing
and accelerating circumstances of today's world.
The study discusses the value creation of leading companies that need to act strategically. This
stems from the concept of complementarity between strategic and entrepreneurial thinking,
which is called strategic entrepreneurship. The concept of strategic entrepreneurship consists of
several elements: leadership actions, strategic actions, Strategy.
The researchers suggest that strategic entrepreneurs should understand the Blue Ocean strategy
and should go beyond the boundaries of the industry to discover unknown needs to meet them,
target unknown clients in the industry, move between different strategic groups and consider
alternative alternatives, Plus to beat
On regulatory obstacles and focus on resources that maximize opportunities and exploit them.
The researchers recommend that the escape from competition lies in the availability of a new
product or service quality and distinct since it is not enough low cost product because many
large companies are offering low-cost products, so it must be innovative and based on the
specifications of the target group.
The researchers recommend entrepreneurs and entrepreneurs that the shift from traditional
entrepreneurship to strategic entrepreneurship is imperative to accommodate all possible
variables in the world. This is to adopt a business strategy that is capable of absorbing variables
by employing the blue ocean strategy and applying its own framework.
7- Vester, Daniel (2012).” Synthesizing a blue ocean”
The study aims at determining how ideal electronic music companies can benefit from
strategies of innovative value to add innovative value to their products and create new markets
that differ from their current markets. The researcher relied on the theoretical framework to use

28
competitive strategies that suit the work of electronic music companies.
The researcher used the blue ocean strategy tools and matrix to develop the product process of
Arturia Company, which specializes in the production of electronic musical instruments. The
company has a distinguished staff with diverse skills that were taken into consideration during
the study.
The results of the study showed that blue ocean strategy tools and their framework can help
electronic music companies to add innovative value to their products as well as to create new
markets. The results show that companies must determine the innovative value with factors
associated with the product, Customer feedback and not only when using the product.
The researcher recommends that companies focus more on the emotional attractiveness of the
product, rather than technical specifications, and this is a challenge to traditional legacies that
are available to companies and therefore must be removed through the strategy of reduction.
8- Alhaddi (2014). “Blue Ocean Strategy and Sustainability for Strategic Management ".
The study aims to highlight the role of the Blue Ocean Strategy in implementing sustainability
initiatives by being guided by the similarity between sustainability and Blue Ocean Strategy by
being a driving force for innovation and value through the conceptual framework of the study.
The framework proposes three steps: definition, selection and selection. The researcher explains
how to implement the steps in the first step. Managers define the organization's goal and then
define the strategy that will contribute to achieving the goal.
Where elements are complementary to each other through the application of the framework.
The study also tackled the concept of sustainability and its role in creating value from the
implementation of good / beneficial initiatives that define the value of sustainability. Therefore,
Blue Ocean Strategy as a business competitive strategy can be used to take advantage of
sustainability as a field of growth and innovation,
This paper suggests using the Blue Ocean strategy to implement sustainability initiatives,
guided by the similarity between BOS and sustainability in terms of innovation and value.
This is done through the introduction of BOS and sustainability in an integrated conceptual
framework, which enables the managers of organizations to serve as the guiding principle in the
development of the organization's strategy. The researcher recommends further research and
studies on the optimal utilization of sustainability as an engine of innovative value.

29
2.3.1 Previous Studies on Sustainable Competitive Advantage:
1- Mara & Ministry of Education (2014). “Sustainable Competitive Advantage in Small
and Medium Enterprises Through a Qualitative Lens: Insights on Intellectual Capital”.
The study aims at identifying elements of sustainable competitive advantage that help SMEs to
develop effective competitive strategies from the outset, especially intellectual capital and its
impact on intellectual capital.
The focus group approach was used to explore the perception of sustainable competitive
advantage and intellectual capital for small and medium-sized enterprises. Data were analyzed
for the study. The results showed that SMEs used cost and differentiation strategies to achieve
sustainable competitive advantage. Vital to value creation for customers. The study also
recommended that human capital should be considered and developed as the most important
component of intellectual capital.
2- Lee & Pae & Park (2014). “The important role of corporate social responsibility
capabilities in improving sustainable competitive advantage ”.
The study aims to investigate the impact of social responsibility on the association of
companies in terms of customer orientation, price or price premium, which are key elements
affecting competitive advantage.
The researchers used the questionnaire tool, where 168 questionnaires were distributed to 7
Korean companies that carried out many community activities and public relations with the
local community. The results also showed that the social responsibility activities as well as
public relations activities have a positive impact on the company's ability and improve social
responsibility. The customer is guided by the customer's desire to purchase. The results also
indicate that the company should take into account the activities related to public relations and
social responsibility to improve the perception of employees towards social responsibility.
3-CARSTEN REUTER AND KAI FOERSTL(2010)” SUSTAINABLE GLOBAL
SUPPLIER MANAGEMENT: THE ROLE OF DYNAMIC CAPABILITIES IN
ACHIEVING COMPETITIVE ADVANTAGE”
Organizations face increased pressure from stakeholders to incorporate a plethora of corporate
responsibility (CR) and sustainability aspects in their business practices. Legal and extra-legal
demands are dynamically changing; almost no organizational function is unaffected. Owing to
the outsourcing wave of the last decade, in particular purchasing and supply management

30
(PSM) plays an ever more important role in assuring sustainable production of the firm’s
products offered in the marketplace. The supply base of many Western firms has become
increasingly global and spend volumes have shifted towards emerging countries. In order to
avoid the risk of reputational damage to the buying company, the PSM department must ensure
that their international suppliers comply with their corporate codes of conduct and that
environmental and social misconduct at supplier premises does not occur. In this paper,
‘‘sustainability’’ refers to the pursuit of the tripartite of economic, environmental, and social
performance. We contribute to prior research in the fields of sustainability and CR by extending
insights of the dynamic capabilities view to analyze how the PSM function integrates
sustainability aspects in its global supplier management processes. Based on four case studies in
the chemical industry, we propose that profound sustainable global supplier management
(SGSM) capabilities are a source of competitive advantage. These capabilities are path
dependent and particularly valuable when organizations are receptive to external stakeholder
pressure. Early movers in the field of SGSM reap competitive benefits to a notable extent as a
result of resource accumulation and learning processes over time.
4-Sayedeh Parastoo Saeidi(2015) “How does corporate social responsibility contribute to
firm financial performance? The mediating role of competitive advantage, reputation, and
customer satisfaction”
Direct relationship between corporate social responsibility (CSR) and firm performance has
been examined by many scholars, but this direct test seems to be spurious and imprecise. This is
because many factors indirectly influence this relation. Therefore, this study considers
sustainable competitive advantage, reputation, and customer satisfaction as three probable
mediators in the relationship between CSR and firm performance. The findings from 205
Iranian manufacturing and consumer product firms reveal that the link between CSR and firm
performance is a fully mediated relationship. The positive effect of CSR on firm performance is
due to the positive effect CSR has on competitive advantage, reputation, and customer
satisfaction. The final findings show that only reputation and competitive advantage mediate the
relationship between CSR and firm performance. Taken together, these findings suggest a role
for CSR in indirectly promoting firm performance through enhancing reputation and
competitive advantage while improving the level of customer satisfaction.

31
Previous Studies on on Blue Ocean Strategy and Sustainable Competitive
Advantage:
1- Andrew Burke(2009): Blue Ocean versus Competitive Strategy: Theory and Evidence
Blue ocean strategy seeks to turn strategic management on its head by replacing ‘competitive
advantage’ with ‘value innovation’ as the primary goal where firms must create consumer
demand and exploit untapped markets. Empirical analysis has been focused on case study
evidence and so lacks generality to resolve the debate. We provide a methodological synthesis
of the theories enabling us to bring statistical evidence to the debate. Our analysis finds that
blue ocean and competitive strategies overlap and managers do not face a discrete either/or
decision between each strategy. Our evidence for the Dutch retail industry indicates that blue
ocean strategy has prevailed as a dominant long term viable strategy.
2- Abdulraheem Ali Alghamdi(2011): The Role of Market Knowledge in the Adoption
of the Blue Ocean Strategy and its Impact on Achieving Competitive Advantage: a
Study Conducted in the Saudi Telecom Company (STC)
This study deals with an important and vital subject that focuses on determining the role of
market knowledge and Blue Ocean Strategy in achieving competitive advantage, and that is
because of the scarcity of management studies in general, and marketing studies in particular,
which addressed the nature of the relationship and impact between these three concepts .The
study problem was represented by the question: what is the state of the Blue Ocean Strategy in
Saudi Arabian organizations, how is it affected by market knowledge and what is its impact on
achieving competitive advantage. This study aims to reveal the extent of the realization of the
organization under study of market knowledge and Blue Ocean Strategy. It also aims to
determine the relationship and impact between market knowledge dimensions and the
dimensions of the Blue Ocean Strategy, determining the relationship and impact between the
Blue Ocean and the dimensions of the competitive advantage strategy, the relationship and
impact between market knowledge dimensions and competitive advantage dimensions and
determining the relationship and the indirect impact of market knowledge on achieving
competitive advantage through the Blue Ocean Strategy. The study was conducted on
employees who occupy supervisory positions in Marketing department of Saudi Telecom
Company. The number of valid questionnaires for analysis amounted to (64), which were
analyzed using statistical software (SPSS). The study reached several conclusions, including:
There is a high degree of acknowledgement among participants in the study about: market

32
knowledge dimension, Blue Ocean Strategy and competitive advantage; there is a relationship
and impact between market knowledge dimension and Blue Ocean Strategy dimension; there is
a relationship and impact between Blue Ocean Strategy dimension and competitive advantage
dimension; there is a relationship and impact between market knowledge dimension and
competitive advantage dimension, there is a relationship and an indirect impact of market
knowledge on achieving competitive advantage, and that is through the Blue Ocean Strategy.
3- Abdulraheem Ali Alghamdi(2016): Market Knowledge, Blue Ocean Strategy, and
Competitive Advantage (Direct and Indirect Relationships and Impact)
This study deals with an important and vital subject that focuses on determining the role of
market knowledge and Blue Ocean Strategy in achieving competitive advantage, and that is
because of the scarcity of management studies in general, and marketing studies in particular,
which addressed the nature of the relationship and impact between these three concepts .The
study problem was represented by the question: what is the state of the Blue Ocean Strategy in
Saudi Arabian organizations, how is it affected by market knowledge and what is its impact on
achieving competitive advantage. This study aims to reveal the extent of the realization of the
organization under study of market knowledge and Blue Ocean Strategy. It also aims to
determine the relationship and impact between market knowledge dimensions and the
dimensions of the Blue Ocean Strategy, determining the relationship and impact between the
Blue Ocean and the dimensions of the competitive advantage strategy, the relationship and
impact between market knowledge dimensions and competitive advantage dimensions and
determining the relationship and the indirect impact of market knowledge on achieving
competitive advantage through the Blue Ocean Strategy. The study was conducted on
employees who occupy supervisory positions in Marketing Department of Saudi Telecom
Company. The number of valid questionnaires for analysis amounted to (64), which were
analyzed using statistical software (SPSS). The study reached several conclusions, including:
There is a high degree of acknowledgement among participants in the study about: market
knowledge dimension, Blue Ocean Strategy and competitive advantage; there is a relationship
and impact between market knowledge dimension and Blue Ocean Strategy dimension; there is
a relationship and impact between Blue Ocean Strategy dimension and competitive advantage
dimension; there is a relationship and impact between market knowledge dimension and
competitive advantage dimension, there is a relationship and an indirect impact of market
knowledge on achieving competitive advantage, and that is through the Blue Ocean Strategy.

33
3. Research Methodology
3.1 Introduction:
The study methodology and its procedures is considered as a major hub from which to
accomplish the practical side of the study, and from it the data needed to conduct a
statistical analysis to come up with results that are interpreted in the light of the
literature study on the subject of the study is obtained, and thus it achieves the
objectives that it seeks to achieve.
This chapter contains a description of the methodology used and the community and
the study sample, as well as the study tool used and the method of its preparation and
the way of its construction and development, and the extent of its sincerity and
persistence. It also includes a description of the procedures carried out by the
researcher in designing and codifying the study tool, and the tools used to collect the
data of the study, and the chapter ends with the processors that have been used in the
statistical analysis of the data and the conclusions extraction, and here is a description
of these procedures.
3.2 Study methodology:
Based on the nature of the study and the objectives that it seeks to achieve, the
researcher has used the descriptive analytical method, which is based on the study of
the phenomenon as it is in fact, and it is interested in describing it precisely
description and expressed it in a qualitatively and quantitatively expression, and this
approach does not content with the collecting information on the phenomenon in order
to investigate its manifestations and its different relations, but it also extends to the
analysis, connectivity and interpretation to reach the conclusions on which to build the
proposed scenario, so that it increases the stock of knowledge on the subject.
1 - Secondary sources: where the researcher whistled in the treatment of the
theoretical framework for the search to the secondary data sources, which is appeared
in books and Arab and foreign-related references, periodicals, articles, reports, the
previous researches and studies on the subject of the study, and the researching and
reading on various Internet sites.

34
2 -the primary sources: to address the analytical aspects of the research topic, the
researcher resorted to primary data collection through questionnaire as head of the
research, specifically designed for this purpose.
3.3 Population and sample
The pharmacies operating in the Gaza Strip are 40 pharmacies.
The researcher used the simple random sampling method to take the sample.
3.4 Tool development and design:
The researcher prepare a study tool to see
(The Extent of Adoption of Blue Ocean Strategy in Pharmacies in and Its Role in
Enhancing Sustainable Competitive Advantage),
the researcher followed the following steps to build the questionnaire:
1 - see the administrative literature and previous studies relevant to the subject of the study, and
take advantage of them in the construction of the questionnaire and the formulation of its
clauses.
2 –the researcher consulted with a number of experienced people in determining the
dimensions of the questionnaire and its clauses.
3 - Identifying the key areas covered by the questionnaire.
4 - Determining the paragraphs that fall under each factor.
5 - The design of the questionnaire in the initial image has consisted of two basic parts.
Questionnaire study consists of two major parts:
Section I: It is a personal data on the respondent (gender, Age, qualification, Major and Years
of Experience)
The second part is a study areas, and consists of a 58-paragraph, distributor on the following
themes:

35
Table (1) the distribution of the paragraphs on the resolution factors
#
N. items
1.
Elements of Blue
Ocean Strategy
Matrix
Innovation Index 6
2. Increase index 5
3. The reduction index 6
4. The exclusion index 5
Elements of Blue Ocean Strategy Matrix 22
1
The dimensions of
sustainable
competitive
advantage
Quality of the product / service 5
2
Creativity 4
3
Flexibility 5
4
the cost 5
5
Responding to customers 6

36
6
Efficiency of the Organization 6
7
Effectiveness of the Organization 5
The dimensions of sustainable competitive advantage 36
Total 58
the gradient (1-5) has been used to measure the responses of the respondents to the questionnaire by
paragraphs (Table):
Table (2)
Level
strongly
agree
Agree
I don't
know
disagree
strongly
disagree
Scale 5 4 3 2 1
the researcher has chosen the gradient(1-5)to respond, and the closer the answer of 5 indicated high approval
on what is stated in paragraph concerned.
3.5 Validity and reliability of the questionnaire:
The questionnaire Validity:
Validity questionnaire intended to measure what questions questionnaire was developed to
measure it, the researcher has verified the validity of the questionnaire in two ways:
the researcher offered a questionnaire on a group of arbitrators consisted of () specialists in the
areas of academic, Pharmacists, professional, statistical aspects and the names of the arbitrators
in Annex (),the researcher has responded to the opinions of the arbitrators and performed the

37
necessary delete and modify in the light of the proposals submitted, and thus came out the
questionnaire in its final form .
2 - The scale honesty:
First, the internal Validity
Honestly meant the internal validity and consistency of each paragraph of the questionnaire
with the domain that this paragraph belong to, and the researcher calculates the internal
consistency of the questionnaire through the expense of correlation coefficients between each
paragraph of the areas of the questionnaire and the total score of the field itself.
- The results of the internal consistency:
Axis 1: Elements of Blue Ocean Strategy Matrix
Table No. (3) shows the correlation coefficient between each paragraph of the factor of "
Innovation Index," and the total score of the field, which shows that the correlation coefficients
indicated a function at the level of moral 0.05 ≥α, and so the field is honest to put the measure.
Table No (3)Correlation coefficient of each field and Innovation Index
# Innovation Index
Pearson
Correlation
coefficient
Sig.
1 Pharmaceutical innovations contribute to the creation
of new markets for the company and to the acquisition
of great customers
0.677* 0.000
2 The pharmacy applies the principle of innovation in its
operations
0.773* 0.000
3 The pharmacy creates an innovative environment that
encourages employees to perform their duties
0.708* 0.000

38
4 The pharmacy has the potential to transform creative
creative ideas into useful outcomes, whether products
or services
0.811* 0.000
5 The pharmacy investigates innovative strategies that
help it achieve its competitive advantage
0.751* 0.021
6 The pharmacy has responsibility for the management
of innovation
0.728* 0.004
*Correlation is significant at the 0.05 level , value of Correlation (R) table from (30,0.05) Equal
0.349
Table No. (4) shows the correlation coefficient between each paragraph of the factor of " Increase
index," and the total score of the field, which shows that the correlation coefficients indicated a
function at the level of moral 0.05 ≥α, and so the field is honest to put the measure.

39
Table No (4)Correlation coefficient of each field and Increase index
Increase index
Pearson
Correlation
coefficient
Sig.
1 The pharmacy is looking for better delivery methods for
customers
0.537* 0.000
2 The pharmacy seeks to increase its sales by opening new
branches
0.517* 0.000
3 The pharmacy follows a unique way of displaying its products
to attract its customers
0.689* 0.000
4 The pharmacy constantly increases the quality of its products
to win the satisfaction of its customers and increase its profits
0.720* 0.000
5 The introduction of new techniques and methods helps the
marketing mix strategies (product - price - promotion -
distribution - people processes - productivity and quality -
environment) in increasing sales
0.656* 0.000
0.349
Table No. (5) shows the correlation coefficient between each paragraph of the factor of
" the reduction index," and the total score of the field, which shows that the correlation coefficients

40
Table No. (5)
Correlation coefficient of each field the reduction index
# The reduction index
Pearson
Correlation
coefficient
Sig.
1 The pharmacy continuously seeks to minimize errors, thus
enhancing the quality of its products
0.680* 0.000
2 The pharmacy adopts a policy of flexible change, which
contributes to the development of its products
0.752* 0.000
3 The pharmacy has certain plans to reduce overall costs by
reducing unnecessary costs
0.585* 0.000
4 The pharmacy seeks to reduce the risks and opportunities lost
when supplying raw materials and during their use
0.756* 0.000
5 The pharmacy works to reduce waste in time and effort in the
production process
0.807* 0.000
6 Promote responsible community pharmacy by reducing
harmful elements of the environment
0.621* 0.000
0.349
Table No. (6) shows the correlation coefficient between each paragraph of the factor of
" the exclusion index," and the total score of the field, which shows that the correlation coefficients

41
Table No. (6)
Correlation coefficient of each field and the exclusion index
# The exclusion index
Pearson
Correlation
coefficient
Sig.
1 The pharmacy shall exclude some of the production equipment
and systems that are not necessary for the company.
0.426* 0.005
2 The pharmacy excludes some marketing and operational
activities that result in heavy expenses, which increases the
total cost.
0.767* 0.000
3 The pharmacy works to exclude sales representatives or
marketing men who charge the company without actual
outputs or increase in sales rates
0.639* 0.000
4 The pharmacy works to reduce the cost of invested capital
related to the temporal life of the products.
0.477* 0.000
5 The pharmacy excludes procedures and routine complications
in the production processes and during the delivery of the
service or product, especially the non-useful to the customer.
0.757* 0.000
*Correlation is significant at the 0.05 level , value of Correlation (R) table from (30,0.05) Equal 0.349
The second axis: the dimensions of sustainable competitive advantage
Quality of the product / service," and the total score of the field, which shows that the
correlation coefficients indicated a function at the level of moral 0.05 ≥α, and so the field is
honest to put the measure.

42
Table No. (7)
Correlation coefficient of each field and Quality of the product / service
# Quality of the product / service
Pearson
Correlation
coefficient
Sig.
1 Achieve high quality in pharmacy products and services
superior to competitors.
0.743* 0.000
2 There is a development in the quality of pharmaceutical
products to meet the expectations of the expected customers
0.608* 0.000
3 The senior management is concerned with focusing on the
application of international quality standards and considering
them as the basis for the work.
0.794* 0.000
4 The pharmacy focuses on continuously improving the quality
of the production process and regards it as one of the main
strategies for competition.
0.726* 0.000
5 The pharmacy adopts the principle of continuous
improvement, which focuses on improving product quality and
providing additional benefits to the customer
0.672* 0.000
Table No. (8) shows the correlation coefficient between each paragraph of the factor of " Creativity," and the total
score of the field, which shows that the correlation coefficients indicated a function at the level of moral 0.05 ≥α,
and so the field is honest to put the measure.

43
Table No. (8)
Correlation coefficient of each field and Creativity
# Creativity
Pearson
Correlation
coefficient
Sig.
1 Marketing Department has creative and innovative ways to
deliver pharmacy products
0.870* 0.000
2 The pharmacy has the ability to create sophisticated methods and
tools that help in convincing customers to buy the company's
products
0.863* 0.000
3 The pharmacy focuses on the development of new products or
new marks for its products
0.783* 0.000
4 The pharmacy uses creative and innovative methods to guide
consumer behavior and meet their needs
0.754* 0.000
Table No. (9) shows the correlation coefficient between each paragraph of the factor of " flexibility,"
and the total score of the field, which shows that the correlation coefficients indicated a function at the
level of moral 0.05 ≥α, and so the field is honest to put the measure.

44
Table No. (9)
Correlation coefficient of each field and flexibility
# Flexibility
Pearson
Correlation
coefficient
Sig.
1 The pharmacy has the diverse capacities and capabilities to
adapt and respond to the unique needs of all customers and
markets
0.800* 0.000
2 Pharmacy is flexible enough in production processes in terms
of changing machines, machines and any other requirements.
0.791* 0.000
3 We always take into account the flexibility of scale and take
into account the studies of final demand forecasting
0.722* 0.000
4 The pharmacy has sufficient flexibility to develop the quality
of the product as desired by the customer.
0.750* 0.000
5 The pharmacy has the ability to respond to changing
environment conditions which are a competitive advantage for
the company.
0.811* 0.000
Table No. (10) shows the correlation coefficient between each paragraph of the factor of " the cost,"
and the total score of the field, which shows that the correlation coefficients indicated a function at the
level of moral 0.05 ≥α, and so the field is honest to put the measure.

45
Table No. (10)
Correlation coefficient of each field and the cost
# The cost
Pearson
Correlation
coefficient
Sig.
1 The pharmacy pursues a low cost driving strategy to increase
sales with an appropriate product quality
0.644* 0.000
2 The pharmacy uses a marketing mix policy to reduce costs
related to promotion and distribution
0.656* 0.000
3 Pharmaceutical products are characterized by low cost
compared to competitors
0.768* 0.000
4 The pharmacy focuses on reducing the costs of storage and
transportation, which helps to reduce the total costs
0.729* 0.000
0.349
Responding to customers," and the total score of the field, which shows that the correlation
coefficients indicated a function at the level of moral 0.05 ≥α, and so the field is honest to put the
measure.

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