Diese Präsentation wurde erfolgreich gemeldet.
Die SlideShare-Präsentation wird heruntergeladen. ×

Blue ocean strategy & red ocean strategy

Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Anzeige
Wird geladen in …3
×

Hier ansehen

1 von 28 Anzeige

Blue ocean strategy & red ocean strategy

Herunterladen, um offline zu lesen

The “Blue Ocean” approach is a strategic tool that helps innovation strategists’ asses current and desired future strategic states whereas..Red Ocean is a current state.

The “Blue Ocean” approach is a strategic tool that helps innovation strategists’ asses current and desired future strategic states whereas..Red Ocean is a current state.

Anzeige
Anzeige

Weitere Verwandte Inhalte

Diashows für Sie (20)

Andere mochten auch (20)

Anzeige

Ähnlich wie Blue ocean strategy & red ocean strategy (20)

Weitere von Prof.(Dr.) Nitin Zaware (12)

Anzeige

Aktuellste (20)

Blue ocean strategy & red ocean strategy

  1. 1. Blue Ocean Strategy & Red Ocean Strategy 1Prof. (Dr.) Nitin Zaware Prof. (Dr.) Nitin Zaware
  2. 2. Blue Ocean Strategy The “Blue Ocean” approach is a strategic tool that helps innovation strategists’ asses current and desired future strategic states whereas..Red Ocean is a current state. A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, cultural, or other forms of value). 2Prof. (Dr.) Nitin Zaware
  3. 3. The process of business model construction is part of business strategy. The business model concentrates on value creation. It describes a company or organization's core strategy to generate economic value, normally in the form of revenue. The sustainability of a business is always defined by future events, and the future is always uncertain. The future presents both risks and opportunities. 3Prof. (Dr.) Nitin Zaware
  4. 4. Blue Ocean Strategy "Blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing cost”. BOS is all about minimizing risks due to competition threat and maximizing opportunities by exploring new boundaries. Formulating and executing Blue Ocean Strategy have their own principles that define and separate blue ocean strategy from competition-based strategic thought. Blue ocean strategy is about gaps rowing demand. 4Prof. (Dr.) Nitin Zaware
  5. 5. Blue Ocean Strategy-Meaning: Blue ocean strategy means, the market where market boundaries and industry structure can be reconstruct by the actions and beliefs of industry players. The structure and market boundaries exist only in managers’ minds; practitioners who hold this view do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. 5Prof. (Dr.) Nitin Zaware
  6. 6. Characteristics of Blue Ocean Strategy 6Prof. (Dr.) Nitin Zaware
  7. 7. Characteristics of Blue Ocean Strategy 1) Non Existent Industries: In a Blue Ocean Strategy one tends to see a creation of a whole new industry as you innovate and create products and services that are highly unique and unseen. Blue Ocean Strategy denotes all the industries not in existence till today. 2) Undefined Market Space: The market space in blue ocean strategy is unknown as it has been uncontested and is to be created and developed. The producer has a slight idea about its returns, but is completely oblivious of its potential, scope, and span of coverage. 3) Undefined Industry Boundaries: Again even the Industries boundaries are undefined as these will be new industries and would mean that the scope of the industries can be as large as one's imagination, creativity, and potential. 7Prof. (Dr.) Nitin Zaware
  8. 8. Characteristics of Blue Ocean Strategy: 4) Unknown Competitive Rules: The rules of the market are not defined, the policies governing the industries are not even developed, the scope of the market, industry is just stipulated and the competition is almost negligible. 5) High Profit & Growth Opportunity: Clearly when there is no risk of an immediate competitor on the product, the industry thus formed by the producer is in every sense skewed and inclined towards the producer. 6) Value Innovation: Blue Ocean Strategy works on the principle of value innovation which means that it radically looks only towards an innovative idea to create new or an improved product which is far better than its counterparts. 8Prof. (Dr.) Nitin Zaware
  9. 9. Characteristics of Blue Ocean Strategy: 7) Innovation & Creativity: Innovation and Creativity are the essentials in this strategy as the producer's only aim is to develop an innovative and an efficient product that either out performs existing products far behind technologically or it is something never thought of and unheard to everybody. 8) Create a Market: The benefit of going solo as an innovator is that you create the market for yourself, examining the need of the customer and segmenting the consumer pool. You can also installed utility of the product which makes it equally possible to be consumed by another segment of the market. 9Prof. (Dr.) Nitin Zaware
  10. 10. Characteristics of Blue Ocean Strategy: 9) Developing Future Demand: When the first press conference was conducted by Steve Jobs for I Phone, he didn't show case his product, but instead he built a relationship with the customers in his very presentation. He got their attention and he immediately made a blow by tempting them to buy the product. 10) Focus on Creating Future Customers: It's not just about creating customers, but instead building a pool of high loyal customers who would look up to the brand as their own and idealize their every new product. 10Prof. (Dr.) Nitin Zaware
  11. 11. Principles of Blue Ocean Strategy: 11Prof. (Dr.) Nitin Zaware
  12. 12. Principles of Blue Ocean Strategy: 1) Reconstruct Market Boundaries: This principle identifies the paths by which managers can systematically create uncontested market space across diverse industry domains, hence attenuating search risk. 2) Focus on the Big Picture, not the Numbers: This principle, which addresses planning risk, presents an alternative to the existing strategic planning process, which is often criticized as a number-crunching exercise that keeps companies locked into making incremental improvements. 3) Reach beyond Existing Demand: To create the greatest market of new demand, managers must challenge the conventional practice of aiming for finer segmentation to better meet existing customer preferences, which often results increasingly small target markets. 12Prof. (Dr.) Nitin Zaware
  13. 13. Principles of Blue Ocean Strategy: 4) Get the Strategic Sequence Right: The fourth principle describes a sequence that companies should follow to ensure that the business model they build will be able to produce and maintain profitable growth. 5) Overcome Key Organizational Hurdles: Tipping point leadership shows managers how to mobilize an organization to overcome the key organizational hurdles that block the implementation of a blue ocean strategy. 6) Build Execution into Strategy: fair process to address the management risk associated with people’s attitudes and behaviors. Because a blue ocean strategy represents a departure from the status quo, fair process is required to facilitate both strategy making and execution by mobilizing people for the voluntary cooperation needed for execution. 13Prof. (Dr.) Nitin Zaware
  14. 14. Red Ocean Strategy: The Red Ocean Strategies suggest that there is no way that a corporation can achieve both kinds of competitive advantages. The Red Ocean companies try to outperform their rivals to grab a greater share of existing demand. Meaning: Red Ocean Strategy is a head-to-head battle where the players of a particular segment compete with each other remaining in the same market space i.e. within the boundaries of the same industry on the principle of ‘competitive advantage. Definition: "Red oceans represent 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". 14Prof. (Dr.) Nitin Zaware
  15. 15. Characteristics of Red Ocean Strategy: 15Prof. (Dr.) Nitin Zaware
  16. 16. Characteristics of Red Ocean Strategy: 1) Existing Industries: Red Ocean strategy talks about existing, current industries and product or service segment. The producer or the company doesn't go away from its existing Industry and conduct business as competitive with its other competitors within the industry. 2) Defined Market Space: Market space is space within which any producer conducts business and is able to sell its produce to the possible buyers. In this form of strategy the market space is known as it has existed since the inception of the industry. 3) Defined Industry Boundaries: The boundaries around which the Industries scope and span revolves around is limited and very much defined and well accepted by the producer and his/her counterparts boundaries are defined and accepted. 16Prof. (Dr.) Nitin Zaware
  17. 17. Characteristics of Red Ocean Strategy: 4) Known Competitive Rules: Competitive rules are known and defined, the policies on which the industry is governed is updated and modernized to its capacity of ensuring better and healthy environment within the industry. 5) Low Profit Growth Opportunity: Fairly having a divided form of market share only ensures a low profit and growth opportunities as each producer is capable of sustaining while providing differentiated and higher quality product. 6) Competitive Advantage: The market on a Red Ocean Strategy works on the principle of competitive advantage where, due to a higher technology or supply of cheaper raw material or marginally higher product quality or better logistics can be seen as a competitive advantage. 17Prof. (Dr.) Nitin Zaware
  18. 18. Characteristics of Red Ocean Strategy: 7) Low Cost or Differentiation: The best way to survive or sustain in such a market condition is to either through a strategy of low cost if the producer has an advantage on cost of production, raw material, labour, logistics and warehousing. 8) Beat the Competition: The company's only goal and outlook is to beat the competition by hook or crook to render them a better margin of profit or market share. Thus they put down every form of investment to compete and fight for even a single percent market share. 9) Exploit Existing Demand: Pricing decisions are made tactfully to not just cover the cost incurred on production, but also to collect enough profits before their counterparts make a move to hamper their sales. 18Prof. (Dr.) Nitin Zaware
  19. 19. Characteristics of Red Ocean Strategy: 10) Focus on existing customers: For any particular industry, market or economy of scale, the buyers are limited on the basis of gender, taste, preference, age, income etc. Thus the available consumer pool in most cases is mostly limited. 19Prof. (Dr.) Nitin Zaware
  20. 20. Difference between Red & Blue Ocean Strategies: Basis Red Ocean Strategy Blue Ocean Strategy Industries Red Oceans represent the fiercely competitive arena where most companies compete Blue oceans, denote all the industries not in existence today- the unknown market space, untainted by competition. Competition This strategy focus on the competition within the existing market space. This strategy focuses on creation of uncontested market space. Approach Approach of red ocean strategy is to beat the competition. Approach of the red ocean strategy is to make the competition irrelevant 20Prof. (Dr.) Nitin Zaware
  21. 21. Difference between Red & Blue Ocean Strategies: Demand In Red Ocean strategy higher weightage is given to exploit existing demand. In Blue Ocean strategy weightage is given to develop future demand. Goal Goal of this strategy plan is to make value-cost-trade-off Goal of this strategy plan is to brake the value-cost-trade-off. Alignment of System Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost Align the whole system of a firm’s activities in pursuit of differentiation or low cost 21Prof. (Dr.) Nitin Zaware
  22. 22. Difference between Red & Blue Ocean Strategies: Profit Opportunity Profit opportunity of using Red Ocean Strategy is low. Profit opportunity of using Blue Ocean Strategy is High. Customer Focus Red Ocean strategy focuses on existing stream of customers. Blue ocean strategy focuses on creation of new customers. System Approach In Red Ocean strategy system approach is towards low cost and differentiation In Blue Ocean strategy system approach is towards creativity and innovation. 22Prof. (Dr.) Nitin Zaware
  23. 23. Tools and Frameworks in Blue and Red Ocean Strategy: Tools and Frameworks The Strategy Canvas Action Framework 23Prof. (Dr.) Nitin Zaware
  24. 24. Tools and Frameworks in Blue and Red Ocean Strategy: 1) The Strategy Canvas: The strategy canvass is a high level depiction of current and future strategic position based on the key Blue Ocean principles; it helps strategists examine value creation, value capture and opportunity. Use of Axis in Strategy Canvas: The strategic canvas is using two dimensions which are counted in two axis’s. On the horizontal axis, there are shown all the factors by which the market competes and spend resources, and on the vertical axis is shown the level of supply that the buyers accept for every of the for mentioned factors. Value Curves Strategy Canvas : The factors ratting graphic presentation on the strategic canvas is called Value Curve of a corporation, representing its strategic profile. The Value Curve, is a part of the strategic canvas and it graphically percentages the relative performance of the corporation compared with the competition factors of its industry. 24Prof. (Dr.) Nitin Zaware
  25. 25. The Strategy Canvas: Application in Red Ocean and Blue Ocean: The strategic canvas is successively used to outline the competitiveness field of the Red Ocean. In order for a corporation, that functions in a Red Ocean, to get to a better and more profitable path, it has to do more that copying its competitors and constantly compete with them Such a strategy may raise the sells in short term, but it will have few chances to provide an in despicable market share Basic Purpose: a) To capture the current state of play in the known market space, which allows users to clearly see the factors that the industry competes on and where the competition currently invests. b) To propel users to action by reorienting focus from competitors to alternatives and from customers to noncustomers of the industry 25Prof. (Dr.) Nitin Zaware
  26. 26. 2) The Four Forces/Action Framework: The four forces frame is used to redefine the elements that add value to the customers by creating a new value curve, as it is shown to the following diagram. 26Prof. (Dr.) Nitin Zaware
  27. 27. The Four Forces/Action Framework: a) Elimination: The first question, suggests that a corporation should find out how to eliminate those factors that the corporations are competing for, in the industry. Usually, those factors are taken for granted, even if they don't add value anymore or even take away value. b) Reduction: The second question, urges the company to defy whether its products and services have been overdeveloped in their struggle to reach and exceed the competition. Some corporations offer way too many services to their customers, which multiply their costs without offering real value to them. 27Prof. (Dr.) Nitin Zaware
  28. 28. The Four Forces/Action Framework: c) Raise: The third question, urges the corporation to discover and eliminate those compromises that the industry makes the customers to do. d) Creation: The fourth question, helps the corporations to discover hole new sources of value for it’s customers, to create new demand and to change the pricing strategy of the industry. If a corporation follows the first two questions, that suggest the elimination and the decrease of some factors, it can succeed on decreasing its costs comparing with its competitors. On the other hand, the next two questions, suggest the creation and increase of some factors, which will increase the market value of the corporation’s product, and create new demand. 28Prof. (Dr.) Nitin Zaware

Hinweis der Redaktion

  • Unknown Competitive Rules:
    The rules of the market are not defined, the policies governing the industries are not even developed, the scope of the market, industry is just stipulated and the competition is almost negligible.
  • Unknown Competitive Rules:
    The rules of the market are not defined, the policies governing the industries are not even developed, the scope of the market, industry is just stipulated and the competition is almost negligible.
  • Unknown Competitive Rules:
    The rules of the market are not defined, the policies governing the industries are not even developed, the scope of the market, industry is just stipulated and the competition is almost negligible.

×