It is a dangerous bad book because it takes some thinking to figure out why it is bad, despite its success, and despite the fact that its key metaphor of blue ocean vs. To aid you in completing this step and all the other steps in. There are four guiding principles for the successful formulation of blue ocean strategy. Based on a study of 150 strategic moves spanning more than 100 years and 30 industries, blue ocean strategy addresses this question and provides a systematic approach to drafting and implementing your own blue ocean strategy. The visual and actionable frameworks and tools such as the strategy canvas, four actions framework and six paths form the analytic foundations of the blue ocean. The simplicity principle and why six is the perfect number. As discussed in the two previous articles, blue ocean strategy bos has been with us in its formalised state since 2004 and since then it has been much talked about, often idealised and sometimes maligned. The insead blue ocean strategy institute is dedicated to extending the research on blue ocean shift, blue ocean strategy, and blue ocean leadership by chan kim and renee mauborgne and disseminating it to professors, researchers and practitioners around the globe. The structure can be created or recreated by the steps taken by players in the market. Blue ocean strategy is about value innovation in general, in which no emphasis is put on reducing the speed to market. They represent businesses that may not be around today, or werent around until they came on to the scene. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Chan kim and renee mauborgne in their book blue ocean strategy. The first four principles address blue ocean strategy formulation.
Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level. In the worlds most popular sport, soccer, the perfect aerodynamic ball is made up of 20 hexagons and 12 pentagons. Strategy and thinking is not limited by preconceived barriers, and a shift happens from a focus on the supply side to a focus on the demand. See standard industrial classification manual 1987 and north amer. Instead of fighting headon with your competitors, how do you create uncontested market space and make the competition totally irrelevant. Reach beyond existing demand reduce scales reisk 4. It is the intersection between these analytic techniques and the six principles of formulating and executing blue oceans that allow companies to break from the. In china, six is considered a lucky number because it represents flow and wealth. Keywords blue oceans, value innovation, four action framework, strategy. Principles of blue ocean strategy principles of blue ocean strategy are the six main principles that guide companies through the formulation and execution of their blue ocean strategy in a systematic risk minimizing and opportunity maximizing manner. Blue ocean strategy is a bad book, but it is not your usual bad book. Reviewing the blue ocean strategy universiteit twente.
In this article you will learn how to make your competition irrelevant and have sales and profit. Reconstruct market boundaries reduce search risk 2. The six main principles guide companies through the formulation and execution of blue ocean strategy in a systematic, riskminimizing manner. Blue ocean strategy is a book published in 2005 and written by w. It enables them to successfully identify out of the haystack of possibilities that exist, commercially compelling blue oceans by reconstructing market boundaries. Blue ocean strategy how to create uncontested market. Formulating blue ocean strategy 75 mins 120 mins 120 mins exploration. Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to bring the blue. To break from competition, a organization has to reconstruct the market boundary which is the first and foremost principle in creating blue ocean strategy. Value innovation is the cornerstone of blue ocean strategy 1 and it is the strategic move that allows a company to create a blue ocean. Blue ocean strategy including examples and pdf download.
The blue ocean strategy approach to strategy is based on six principles that cater for the major risks of a new market creation project. Chan kim and renee mauborgne, develops and explains how to beat the competition by reaching beyond it into new unexplored markets. Working with our partners at thinkers50 we have created email protected it showcases some of the very best thinkers in the field of strategy and beyond. Built on common strategic patterns of blue ocean strategy. Expertise in saas deployment to the accounting profession and small to medium sized business owners, blue ocean principles works with vendors to create strategies that increase user adoption and partnerships to support growth initiatives. For app developers we help make the competition irrelevant. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. Based on an eponymously titled book, this strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Blue ocean strategy how to create uncontested market space. Blue ocean strategy formulation the four principles of. How to create uncontested market space and make the competition irrelevant, a. This course introduces the key concepts, frameworks and tools of blue ocean strategy and lays out the fundamental methodology and process for creating and capturing blue oceans. Formulation principles reconstruct market boundaries focus on the big picture, not the numbers reach beyond existing demand get the strategic sequence right 2.
Blue ocean strategy is a landmark idea founded by w. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. Ipf bos in order to optimize the implementation of blue ocean strategy, making the value of the company and the products to be better in the consumers. It is a coalition dedicated to helping organizations bridge the gap between strategy design and strategy delivery. Eight key points of blue ocean strategy insead knowledge. The process sounds very much like how bos is used every day in the business world because not surprisingly, people in practically any industry ask similar questions. Subsequent chapters introduce the principles that drive the successful formulation and implementation of blue ocean strategy and explain how they, along with the analytics, are applied in action. The evolution of blue ocean strategy ims engineering college. What is blue ocean strategy about blue ocean strategy. Achieved via the delivery of features that have a highest marginal benefit to customer needs. About us blue ocean principles business development. Chan kim and renee mauborgne allows managers to address the search risk many companies struggle with. The book the origin of the terms red and blue oceans comes from blue ocean strategy how to create uncontested market space and make the competition irrelevant.
International journal of economics, co mmerce and management, u nited kin gdom. Blue ocean strategy workshop at disted hospitality campus. Companies should instead look for new market space and ways to reinvent the industry. There are six basic approaches to reconstruct market boundaries, also known as six paths framework. Focus on the big picture, not the numbers reduce planning risk 3. Blue ocean principles business development consulting.
Value innovation strategy competes in an uncontested market space. This short article examines the many ways blue ocean strategy bos can be used to create a better educational system. How to create uncontested market space and the make competition irrelevant 2005. Blue ocean strategy is a strategy that advice companies to go to a new market, which interest customers and avoid competition from the existing market. There are six main principles that guide companies through the formulation and execution of their blue ocean strategy in a systematic risk minimizing and opportunity maximizing manner.
Of the many strategic planning models that exist, the blue ocean strategy could be considered the pacifist of the group. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. The six principles of blue ocean strategy risk factor each principle attenuates evaluation principles risk factor each principle attenuates formulation principles 8. An introduction to blue ocean strategy mba knowledge base.
Principles of blue ocean strategy free download as word doc. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. The six principles of blue ocean strategy formulation principles 1. In this article you will learn the plan they outline for how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Blue ocean strategy and sustainability for strategic. In this way, it swam into a blue ocean, offering a plastic watch at a price that allowed people to purchase two or three watches at one. Typically, companies in the red ocean pursue incremental improvements for customers through either low cost or differentiation. We hope that it acts as a catalyst for readers to get things done. One thing that is very difficult to argue with, however, is the attractiveness of. This strategy targets six principles that can be used in every organization so that they can arrive at a successful development and fulfilment of new markets. Strategy can also be defined as a general direction set for the company and its various components to achieve a desired state in the future. Applying the six paths framework to reconstruct market. The six principles of blue ocean strategy formulation principles risk factor each principle attenuates reconstruct market boundaries focus on the big picture, not the numbers reach beyond existing demand get the strategic sequence right search risk planning risk scale risk business model risk evaluation principles risk factor each principle attenuates.
This blog article is a overview of some of the key points of the book by w. Blue ocean principles offers marketing management and strategy consulting for technology vendors looking to expand marketshare in the accounting community. Blue ocean has six basic principles t o form a strategy. The six paths framework in formulating blue ocean strategy. The concept of blue ocean is based on the idea that the business universe is made up. Strategy in a practical way the study of six principles play a significant role 4. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. The premise of the book is that companies can succeed by creating. The next two parts of the book cover these two categories of principle respectively, in addition to the application of tools and.
Strategy is an action that managers take to attain one or more of the organizations goals. The blue ocean strategy seems to be a perfect solution for present companies to become sustainable successful. Tru group inc blue ocean strategy belongs in the dead sea. The authors use the metaphor of the blue ocean as a direct contrast to red oceans.
Principles of blue ocean strategy strategic management. Our aim is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. Innovation, new market space and creating demand are central characteristics. The six principles are presented in the following table. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. In their 2017 new york times bestselling book, blue ocean shift, kim and mauborgne share how to put these practical marketcreating tools into practice to move from red to blue oceans and to do so in a way that people own and drive the process. Execution principles overcome key organizational hurdles build execution into strategy the four actions framework. Blue ocean strategy formulation the four principles of strategy formation. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Only then can companies step up to the challenge of creating blue oceans in a smart and responsible way that is both opportunity maximizing and risk minimizing.
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