Introduction To Blue Ocean Strategy

Introduction To Blue Ocean Strategy by Ko Su Piow

For twenty-five years, competition has been at the heart of corporate strategy. Today, one can hardly speak of strategy without involving the language of competition: competitive strategy, competitive benchmarking, building competitive advantages, and beating the competition. Such focus on the competition traces back to corporate strategy’s roots in military strategy. The very language of corporate strategy is deeply imbued with military referencesâ€"chief executive “officers” in “headquarters,” “troops” on the “front lines,” and fighting over a defined battlefield.

Blue Ocean denotes the industries that not existence today â€" the unknown market space or market unattained by competition. Blue Ocean strategy provides a systematic approach to making the competition irrelevant. This framework had been presented by Mr. Kim W Chan and Mauborgne Renee in their most sellable book entitle “Blue Ocean Strategy â€" How to Create Uncontested Market Space and Make the Competition Irrelevant”.

Red Ocean & Blue Ocean

Imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. Red oceans represent all the industries in existence today. This is the known market space. Blue oceans denote all the industries not in existence today. This is the unknown market space.

In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of existing demand. The dominant focus of strategy work has been on competition-based red ocean strategies. As the market space of red oceans gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean bloody. Hence we use the term “red” oceans. Blue oceans, in contrast, are defined by untapped market space, demand creation, and the opportunity for highly profitable growth. Although some blue oceans are created well beyond existing industry boundaries, most are created from within red oceans by expanding existing industry boundaries. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. The term “Blue Ocean” is an analogy to describe the wider potential of market space that is vast, deep, and not yet explored. It will always be important to navigate successfully in the red ocean by out competing rivals. Red oceans will always matter and will always be a fact of business life. However, with supply exceeding demand in more industries, competing for a share of contracting markets will not be sufficient to sustain high performance. Companies need to go beyond competing in established industries. To seize new profit and growth opportunities, they also need to create blue oceans.

About the Author
ECO MAX Training & Learning Center provides Blue Ocean Strategy workshop for public listed companies, private held company, small businesses and Government body.

The author can be contacted via the web-site http://www.ecomaxmc.com/

Source: Blue Ocean Strategy, Business Strategy information at goarticles.com