Research by W. Chan Kim and Renée Mauborgne of INSEAD shows something interesting. As many as 86% of companies in the “red ocean” generate only 39% of total profit. Meanwhile, 14% of companies in the blue ocean achieve 61% of profits. This shows how important innovation and industry analysis is.
Cirque du Soleil is a great example of success in the blue ocean. Combining theater, art and circus, they have achieved huge revenues in 20 years. Other circuses would have had to work for it over 100 years. This proves that an innovative approach opens up new opportunities.
The most important conclusions:
- Blue Ocean Strategy implies the creation of new market segments.
- Innovations are the key, allowing to avoid direct competition and create new demand.
- Research indicates that blue ocean companies have higher profits and stability in the market.
- Examples of such companies are Cirque du Soleil, Apple and Netflix.
- The main principles of the strategy include the transformation of market boundaries and the innovation of values, which provides an advantage.
Blue Ocean Strategy Definition
The strategy of the blue ocean is to create new markets that the competition has not yet discovered. Puts on innovationsto give customers added value in a unique way. This approach allows companies to long term success and be more competitive.
Basics of the concept
It's about avoiding competitive struggle, creating something new. Companies that do this respond to new customer needs. Cirque du Soleil, for example, completely changed the circus, introducing a fresh look at entertainment.
Difference Between Red and Blue Ocean
The red oceans are full of competition, where everyone fights for the customer. These are products for the price fight. In contrast, the blue oceans open up new opportunities without competition. Here, companies can create unique products that bring customers a unique added value.
With the blue ocean strategy, you can reduce costs and offer lower prices. Innovations and new markets increase profits by 61% compared to companies that only improve old products.
The main principles of the blue ocean strategy
The successful application of the Blue Ocean Strategy requires a focus on six main principles. These principles include, among other things, the reconstruction of market boundaries. They also include exploring the needs of consumers and creating new demand.
Reconstructing the boundaries of the market
Reconstructing the boundaries of the market is the key to the blue ocean strategy. Companies achieve this by recognizing and remodeling current market boundaries. This allows you to eliminate restrictions and find new opportunities.
Eliminating constraints leads to unique solutions and growth.
“Netflix has been successful by introducing innovative solutions such as online DVD rental and streaming, rather than competing directly with Blockbuster.”
This example shows how to effectively change the market. This leads to other paths of development even in competitive industries.
Creating value innovation
At the heart of the Blue Ocean strategy is the creation of value innovation. This process is about reducing costs and finding new opportunities at the same time. These innovations are about products and services, offering exceptional value.
- The strategy underlines the importance of delivering value to customers through innovation.
- Companies use ERRC (Eliminate, Raise, Reduce, Create) frameworks to create unique value propositions.
- Reorganizing your business approach is the key to long-term success.
“Uber has revolutionized the taxi industry by removing restrictions like paying in cash. It is based on a business model with technology.”
The blue ocean strategy is not only Reconstruction of the market. It is also planning and growth strategiesthat minimize risk and maximize chances. The key is to deliver value at a low cost.
The Blue Ocean Strategy in Practice
The blue ocean strategy is to create something new and avoid competition. Examples of companies that have stood out are Apple with iTunes and Cirque du Soleil. Both companies have shown how innovation can change industries.
An example is also Cannon, which created a simple to use personal scanner. This allowed them to reach new customers. By eliminating unnecessary features, Canon has introduced an offer that is ideal for individual users.
The book”Blue Ocean Strategy” has become a bestseller around the world. W. Chan Kim and Renée Mauborgne show how their methods contribute to the success of companies. Tools such as the value curve are the key to this success.
Ford, thanks to the Model T, has significantly increased its place in the automotive market. This shows how important it is innovation con la strategia del oceano blu. Companies care about creating innovations and setting development directions.
longterm competitiveness It requires new ideas in the market. Kim and Mauborgne describe how this can be achieved. Their book is a guide to creating value and gaining an edge.
Tools used in the Blue Ocean Strategy
The blue ocean strategy is a fruit Fifteen years of research W. Chan Kim and Renée Mauborgne. It enjoys great popularity among managers around the world. It allows companies to innovate and achieve long term success.
The main tools of this strategy include Strategy Canvas and the Four Action Scheme. They help in the simple introduction of innovations.
Strategy canvas
Strategy Canvas allows you to analyze the offer of competitors. It identifies opportunities for important innovations.
This allows companies to show what they are unique in the market. Managers can understand the market more deeply. This helps in making informed decisions.
Scheme of four actions
The Four Action Plan focuses on four key areas: eliminate, reduce, lift and create. This approach requires an analysis of the current situation of the company.
By asking important questions, companies decide what to change. Thanks to this, they can stand out without direct rivals.
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