What is Blue Ocean Strategy

Hi

All us have put across what blue ocean strategy very well. I was lucky enough to work in HCl Tech, when Vineet Nayar (CEO & Board Member of HCL Tech) implemented this strategy. He turned around HCL revenue and he was called to speak in many important forums and also speak in important prestige’s management college in US & UK.

Defining the strategy is one important thing, the next biggest thing is planning and to execute the strategy. As we all know it means we entering into new unknown territory, so it is like starting from scratch, extra effort is needed by mgt to see that we are going in the right track. Once we start execution of the plan, it is important it is within the cost (low) and we get new customer who are not part of your revenue generation earlier.

All these are possible with innovation, which is achieved thro Random and systematic in approach with the organisation.

Internal the challenge is to overcome the mindset of the employees (Sales, Delivery, Support Group).

http://www.blueoceanstrategy.com

Blue Ocean Strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers.
We use the terms red and blue oceans to describe the market universe. Red oceans are 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. Here companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean bloody. Hence, the term “red” oceans. Blue oceans, in contrast, denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. Like the “blue” ocean, it is vast, deep, powerful, in terms of profitable growth, and infinite.

Red Ocean

Highly Contested Space for available talent
All recruiters focus here

• It’s a Red ocean of highly contested spaces
• Most efforts of CampusConnect portals are focused exclusively on this zone
• Increased incremental effort do not result in increased returns
• Highly contested spaces - Soon reach a resistance to increased efforts

Reports of businesses using Blue Ocean Strategy:

• China Mobile: China Mobile CEO Wang Jianzhou talked about China's hinterland as a classic "blue-ocean market," where the company is casting its net widely without worrying about getting tangled up with the nets of rivals.

• Pitney Bowes: Michael Critelli, the departing CEO of Pitney Bowes, explained how Pitney Bowes created the Advanced Concept & Technology Group (ACTG), a unit responsible for identifying and developing new products outside. Critelli cited ACTG's development of a machine, which enables people to design and print their own postage from their desktops, as an example of a blue ocean strategic move.

• Starwood: One group which has been exploring blue ocean thinking for the past three years is Starwood Hotels and Resorts. In an interview to INSEAD Knowledge, Robyn Pratt, Vice President, Six Sigma and Operational Innovation talks about how they are taking a step-by-step approach to implementing the concept.

Regards

Where the competition is nullified or it is irrelevand for example if a monoply is created in a market then the competition or the competitoris non existend.It can be created within a market segment where literallly no major competitor exists.The best example is there is a airline which caters to the needs of specific customers from UAE to Kish Island.This is done because those in visit visa has to change to job visas have to exit UAE for conversion of visa.This Airlines caters mainly to those segment of customers and there is no competitor since the fare is very cheap.I cannot reneber the name of Airline .

Reji Ismail

Best answer is by Mr.

As we see in our business market there can be two spaces-

1. Known market places This space is covered by Red Ocean Strategy, where boundaries are defined and rules are known.but drawback of this strategy is ....

• all industries are looking within boundaries thus market get so crowdy and certainly booldy

2.New market places This space specify as Blue Ocean Strategy. This is totally unknown market space and rules are waiting to be get, and used by industries as Demand creation

Here we reconstruct market boundaries to create Blue Ocean and instead of looking within boundaries we need to look alternate native industries and across buyers group..

thus we can configure blue ocean strategy as bloodless and more effective without inner competeness...

I found these nine key points of blue ocean strategy:

• BOS is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000).
• BOS is the simultaneous pursuit of differentiation and low cost.
• The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.
• BOS offers a set of methodologies and tools to create new market space.
• While innovation has been seen as a random/experimental process where entrepreneurs and spin-offs are the primary drivers – as argued by Schumpeter and his followers – BOS offers systematic and reproducible methodologies and processes in pursuit of innovation by both new and existing firms.
• BOS frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index.
• These frameworks and tools are designed to be visual in order to not only effectively build the collective wisdom of the company but also to effectively execute through easy communication.
• BOS covers both strategy formulation and strategy execution.
• The three key conceptual building blocks of BOS are: value innovation, tipping point leadership, and fair process.