The document discusses the concept of "Blue Ocean Strategy", which promotes creating new market space rather than competing in existing industries. It was proposed by W. Chan Kim and Renée Mauborgne of INSEAD as an alternative to Michael Porter's view that businesses must be low-cost or niche players. Blue Ocean Strategy involves creating new demand through value innovation that benefits both customers and the company. Once a blue ocean is created, it will eventually become crowded and competitive like existing markets. The document then provides examples of case studies on the IBSCDC website that demonstrate Blue Ocean Strategy, such as how IBM created the new market for utility computing and how Toyota pioneered the hybrid vehicle market.

1. Blue Ocean Strategy
Source: http://www.ibscdc.org/blue-ocean-strategy-case-studies.asp
Successful businesses are either low-cost providers or niche players – thus says Michael Porter. However, many
have opposed this idea and claim that it is flawed. For instance, Charles W. L. Hill, an educator, in 1988, proposed
that a combination of differentiation and low-cost might be helpful for firms to achieve a sustainable competitive
advantage and claimed that Porter's model was flawed because differentiation can be a means for firms to achieve
low cost. Swedish educators Jonas Ridderstråle and Kjell Nordström, on the other hand, in their 1999 book Funky
Business, follow a similar line of reasoning. They argue that ‘Competitive Strategy is the route to nowhere’ and that
firms need to create ‘Sensational Strategies’ which is about playing a different game.
A similar strategy proposed by W. Chan Kim and Renée Mauborgne of INSEAD, is the ‘Blue Ocean Strategy’,
which promotes creating ‘Blue Ocean’ or new market space rather than competing in an existing industry. It is in
many ways similar to the ideas presented in Funky Business. For example, the ‘competing factors’ of the Blue
Ocean Strategy are similar to the definition of ‘finite and infinite dimensions’ defined in Funky Business. Kim and
Mauborgne claim that their strategy makes sense where supply exceeds demand. Once a blue ocean is created, it
eventually turns ‘red’ over a period of time and ceases to guarantee success.
Red Ocean is the known market place (or industries), for which industry boundaries are defined and accepted, and
the competitive rules of the game are known. Companies, here, try to outperform their rivals to grab a greater share
of product or service demand. Profits and growth are reduced as the market space gets crowded. Products
become commodities or niche with cutthroat competition turning the ocean red. Hence, the term red ocean gets
coined. Blue oceans, in contrast, denote a non-existent industry or an unknown market space, where competition and
demand is created rather than fought over. Competition, here, is irrelevant because the rules of the market are not set
and there is ample opportunity for rapid growth and profitability. However, the corner-stone of Blue Ocean Strategy
is 'Value Innovation', either in product, service or delivery, which creates value (not found in the current market)
simultaneously for the buyer and the company.
I needed to explain the concept of ‘Blue Ocean Strategy’ in my class and was in search of some live examples that
would demonstrate the above differences. With some search on the internet, I found many sites that explained the
concept in detail but did not have examples. However, in the process I landed up in a website named
www.ibscdc.org, where I got what I was looking for. The site contained quite a few case studies that demonstrated
the concept with real life business examples. IBSCDC offered case studies like – Utility Computing: IBM On-
demand, which demonstrated the introduction of a new concept called ‘utility computing’ in the IT industry by IBM;
Toyota’s hybrid vehicles which helped in creation of a new market space for the company in the US; the case study
of Tivo which pioneered the concept of interactive television and gave rise to a whole new industry.
However, the web site was easy to browse – across pages, with clear categorization of the case studies and tabs that
took the user to the list of related case studies that the user needs. Moreover, a click on the title of the case study
presented a well written abstract and other details needed by the user. It offers a huge collection of case studies
related to various topics like business strategy, entrepreneurship, finance, economics, operations management,
corporate governance, HR, organizational behavior, marketing, international trade, CSR, etc.
Related Blue Ocean Strategy Cases
Cirque du Soleil: Creating a Blue Ocean by Balancing Creativity and Business
LG Electronics: The Blue Ocean Strategy
Toyota’s Prius: A Revolution or a Fad?
Cirque du Soleil: The Making of an Entertainment Brand
Promoting Prius In U.S
USA’s Banking Industry’s Growth Strategies: CitiGroup’s Unconventional Wisdom