|RED OCEAN STRATEGY||BLUE OCEAN STRATEGY|
|Compete in existing market space||Create uncontested market space|
|Beat the competition||Make the competition|
|Focus on existing customers||Focus on non-customers|
|Exploit existing demand||Create and capture new|
|Make the value-cost trade off (create greater value to customers at a higher cost or |
create reasonable value at a
|Break the value-cost trade off|
(Seek greater value to
customers and low cost
|Align the whole system of|
firm’s activities with its
strategic choice of
differentiation or low cost
|Align the whole system of a|
firm’s activities in pursuit of
differentiation and low cost.
This time I will be discussing about the in depth of the Blue Ocean strategy which was formulated by the Insead Business School Professors Kim and Mauborgne clearly explains that tomorrow’s leading companies success will not by fighting competitors, but by creating “blue oceans” of uncontested market space which will enhance in terms of market share and profitability and market capitalisation growth.
There should be a complete paradigm shift which the smart management requires as pioneered in the Blue Ocean strategy as – “value innovation” leveraging value for both the firm and creating the new customers, outsmarting competitors and unleashing latent demands.
Insead original text where the concepts of Blue Ocean has been given:http://www.insead.edu/blueoceanstrategyinstitute/BOS/index.cfm
The real challenge lies with the service companies to be in the blue ocean, they should constantly try to come up with innovative ideas and create tangible vales for the product or services to the customers and un served customers.
If not properly managed it can slip down from The Blue Ocean to The Red Ocean and starts bleeding.Yes it is an intelligent and a very tight walking for the top management guys to keep the firm in The Blue Ocean.
Courtesy: Insead ,France.