3. BOS defined…
The avoidance of costly
competition through innovation
with the aim to create a market
where no firms currently
operate, leaving the company
to expand without competition.
Musfiqur Rahman
6. Red Oceans
•Red oceans refers to
–Industry boundaries defined and accepted
–Competitive rules of game known
–Companies try to outperform rivals;
cutthroat competition
–As market space gets crowded, prospects
for profit and growth reduced
–Products become commodities
–Red ocean strategy is a market-competing
strategy Musfiqur Rahman
8. Blue Oceans
•Blue oceans refers to
–Undefined market space, demand creation,
opportunity for highly profitable growth
–Most are created from within red oceans by
expanding existing industry boundaries
–Rules of game waiting to be set
–Competition irrelevant
–Blue ocean strategy is a market-creating
strategy
Musfiqur Rahman
9. The Rising Imperative of
Creating Blue Oceans
• Supply is exceeding demand in most industries
• global competition is intensifying
• Problems:
– Accelerated commodization of products and services
– Increasing price wars
– Shrinking profit margins
• Red oceans becoming bloodier, need to be
concerned with creating blue oceans
Musfiqur Rahman
11. Red Ocean Vs. Blue Ocean
• Compete in existing
market space
• Beat the competition
• Exploit existing demand
• Make the value-cost
trade-off
• Align the whole system
of a firm’s activities
with its strategic choice
of differentiation or low
cost
• Create uncontested market
space
• Make the competition
irrelevant
• Create and capture new
demand
• Break the value-cost trade-
off
• Align the whole system of a
firm’s activities in pursuit of
differentiation and low cost
Musfiqur Rahman
14. What factors should be
eliminated that the
industry has taken for
granted?
Eliminate
What factors should
be reduced well below
the industry standard?
Reduce
What factors should be
created that the industry
has never offered?
Create
What factors should
be raised well beyond
the industry standard?
Raise
Four Actions
to create a
Blue Ocean
2. Focus on the Big Picture, Not the
Numbers…
2. Focus on the Big Picture, Not the
Numbers…
Musfiqur Rahman
16. Viewing the Cost / Value Relationship as
Inverse…
Cost
Reduction
Value
Increase
• Increase of value implies
increase of cost
• Reduction of cost implies
decrease in value
Musfiqur Rahman
23. Green Ocean Strategy
• Green Ocean Strategy is not about greening or
saving the environment.
• Discipline of strategy that concentrates on
how to maximize both fixed, internal and
human resources.
• Instead of copying or benchmarking against
the competition, the focus is to be more
realistic in relation to what the business can
actually commit or deliver.
Musfiqur Rahman
24. Green Ocean Strategy
• Using the analogy of beach and ocean, before
one reaches the blue part of the ocean, there
is the green.
• So it makes more sense that if a business can
stay within the Green Ocean, where the water
is clearer and nearer the shore, then this
would be less risky, more practical, and
eminently more desirable.
Musfiqur Rahman
26. Conclusion
While traditional competition-based
strategies (red ocean strategies) are
necessary, they are not sufficient to sustain
high performance.
Companies need to go beyond competing to
seize new profit and growth opportunities.
Musfiqur Rahman
Editor's Notes
To win in the future New Market Space, companies must stop competing with each other.
Because the only way to beat the competition is to stop trying to beat the competition.
To understand this idea, imagine a market universe composed to two sorts of oceans:
-red oceans and
-blue oceans.