Blue Ocean Strategy – what is it?
Blue Ocean Strategy is a strategic management concept that involves creating a new market space free of competition, instead of competing in existing, crowded markets, known as red oceans. The term was popularized by a book by W. Chan Kim and Renée Mauborgne titled , “Blue Ocean Strategy,” in which the authors suggest that companies should strive to create , “blue oceans” – innovative markets or segments where competition is minimal or non-existent, allowing for high profitability and dynamic growth.
Unlike traditional strategies for competing in existing markets, where companies must fight for limited resources and customers, the blue ocean strategy focuses on value innovation (value innovation). This means simultaneously seeking to reduce costs and increase the value offered to customers, creating entirely new value for the market. Examples of companies that have succeeded with this strategy include Cirque du Soleil, which created a unique entertainment format combining circus, theater and art, and the Nintendo Wii, which opened up a new segment of the gaming market by focusing on casual gamers and interactive entertainment.
The Blue Ocean Strategy is implemented by analyzing current market trends, understanding unmet customer needs and breaking out of competitive patterns. Companies using this strategy create innovative products or services that not only meet new customer needs, but also create entirely new demand, allowing them to avoid price wars and win loyal customers.
Frequently asked questions
1. What is Blue Ocean Strategy?
Blue Ocean Strategy is a strategic concept of creating new, previously unknown market spaces (so-called blue oceans) where there is no competition, instead of competing in crowded markets (red oceans).
2. What are the benefits of using Blue Ocean Strategy?
Using Blue Ocean Strategy allows companies to avoid price wars, create new market demand and increase profitability through value innovation that benefits both the company and its customers.
3. What companies have succeeded with Blue Ocean Strategy?
Examples of companies that have succeeded with the Blue Ocean Strategy include Cirque du Soleil, which created a new entertainment category, and the Nintendo Wii, which focused on innovative video game solutions for a wide audience.
4. What is value innovation in Blue Ocean Strategy?
Value innovation is about simultaneously increasing customer value and reducing operating costs, leading to the creation of unique products or services that attract new customers and generate new demand.
