Blue ocean strategy involves creating new market space and demand rather than competing in existing markets. It focuses on value innovation to make competition irrelevant by creating products that buyers value. Analytical tools like the strategy canvas and frameworks like the four actions and six paths help identify new blue oceans. Creating blue oceans can lead to significantly higher profits and growth compared to competing only in red oceans.

1. MY TV
WIDE
Blue ocean strategy
Strategic management and globalization
Gocha Sharvashidze
sharvashidze93@yahoo.com
Budapest Business University

2. What is blue ocean strategy?
Blue Ocean Strategy vs Red Ocean Strategy
Value Innovation The Cornerstone of Blue Ocean
Strategy
Analytical tools for blue ocean (strategic
canvas)
Four actions framework
Six paths framework
Objectives

3. What is blue ocean strategy?
 Blue Ocean Strategy was developed by W.
Chan Kim and Renée Mauborgne.
 Meaning of blue ocean strategy

4. Blue Ocean Strategy vs Red Ocean Strategy
The only way to beat the competition is to stop trying to beat the
competition
In this concept, a
market space is
created which is free
from any competition.
It involves
competing in an
existing market
space
Competition is
irrelevant here and it
has no effect on the
success of a business.
industry boundaries are
defined and accepted,
and the competitive rules of
the game are known
prospects for
profits and
growth are reduced
Blue oceans denote all the
industries not in existence
today. This is the unknown
market space

5. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Business Launch
Revenue Impact
Profit Impact
14
38
61
86
62
39
The Profit and Growth Consequences of Creating Blue Oceans
launched in blue ocean launched in red ocean

6. Value Innovation The Cornerstone of Blue Ocean Strategy
value creation
focusing on beating the
competition,
you focus on making the
competition irrelevant
by creating a leap
in value for buyers and
your company, thereby
opening up new and
uncontested market
space
Technology driven

8. Analytical tools for blue ocean (strategic canvas)
The strategy canvas serves two purposes:
• To capture the current state of play in the known market space
• ,,from competitors to alternatives and from customers to noncustomers of the industry”

9. By looking across alternatives, however, Casella Wines, an Australian winery, redefined the
problem of the wine industry to a new one: how to make a fun and nontraditional wine that’s
easy to drink for everyone.
Example of us wine industry

10. Four actions framework

12.  Southwest Airlines
 Low Price
 Short Routes
 No Frills
 Point-to-Point
 One Aircraft:
Boeing 737
 High number of
Aircraft per Route
 No Meals
 Flexible/ Lower Staffing
 Cost focus
 American Airlines
 Premium Price
 Short, Long, & Int’l
 Variety
 Hub & Spoke System
 Multiple Aircraft
 Low number of
Aircraft per Route
 Meals & Service
 Higher Staffing
 Differentiation
focus

15. The Eliminate-Reduce-Raise-Create Grid

16. SIX PATHS FRAMEWORK

17. Industry 1
Industry 2
Industry 3
Untapped
market
New product
Reconstruct the boundaries of industry