This document discusses blue ocean strategy and red ocean strategy. [1] Blue ocean strategy involves creating new market space and making competition irrelevant by creating value for customers in ways currently not offered. [2] Red oceans refer to existing market space where competition is fierce and industry boundaries are defined. [3] The document provides principles for formulating a blue ocean strategy including reconstructing market boundaries and focusing on big picture value innovation rather than numbers.

1. Abdel Salam H. Busalim – MC122009
Abdelrahamn M. Ibrahim – MC112078
Mozhdeh Vahid - MC122055
Mojtaba Zare - 20123M10085
Komeil Raisian Mat - MC 112157
Dr.Ab Razak Che Hussin

2. Definitions:
Blue Ocean Strategy is a way to make the competition
irrelevant by creating a leap in value for both the company
and its customers and create new demand in new market
space
Red oceans mean, all the industries in existence today the
known market space. In the red oceans, industry boundaries
are defined and accepted, and the competitive rules of the
game are known.

3. Blue Ocean and Red Ocean
Blue Ocean Red Ocean
Create uncontested market space.
Compete in existing market space
Make the competition irrelevant. Beat the competition.
Exploit existing demand.
Create and capture new demand
Align the whole system of a company’s
Align the whole system of a company’s
activities in pursuit of differentiation and low
activities with its strategic
cost.
Break the value/cost trade-off. Make the value/cost trade-off.

4. The cornerstone of blue ocean strategy

5. Action framework
• Which of the factors that the industry takes for granted should be eliminated?
• Which factors should be reduced well below the industry’s standard?
• Which factors should be raised well above the industry’s standard?
• Which factors should be created that the industry has never offered?

6. Principles of formulating BOS
Reconstruct Market Boundaries :
path One : Look across alternative industries
Path Two: Look across strategic groups within industries
Path Three: Look across the chin of buyers
Path Four : Look across Complementary products and services offering.
Path Five : Look across functional or emotional appeal to buyers .
Path Six : Look across Time
Focus on the big picture not the numbers
Reach beyond existing demand
Get strategic sequence right
Overcome key organizational hurdles
Build execution into strategy

7. Successful Case study

8. Successful Case study
Other circuses focused on:
Benchmarking the competition
High-profile “stars”, which increased costs but who were
largely unknown to the general public
Traditional venue
Traditional audiences

9. Successful Case study
• Cirque du Soleil focused on:
Creation of a hybrid between the circus and the theatre
Retention of the symbolic and glamorous aspects of
circus, such as the tent and the more breathtaking aspects,
such as acrobats.
Incorporation of more comfort, sophistication, elegance
and theatrical plots; this brought not only the richness of
theatre but a whole new demographic of customers
It looked across market boundaries and created new ones.

10. Advantages of BOS
The current market space gets increasingly crowded, profit and growth
prospects shrink, BOS opens prospects for new market space .
Create new and capture demands from the new market space.
Drive profitable growth.
The competition in blue oceans strategy is irrelevant.

11. limitations of BOS
The value innovation does not make sense to company's conventional logic.
Blue ocean strategy may conflict with other company's brand image.
Natural monopoly; the market often cannot support a second payer.
Network externalities discourage imitation, because imitation often required
changes in the existing business practices .