blue ocean strategy

1. WHAT IS STRATEGY?
• Strategy is the course of action of decisions that are long term
performances and are usually unique in nature.
• It’s basically a plan of action designed to achieve a long term or
overall aim
• Strategy is the direction and scope of an organization over the long
term

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.
• "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”.
• The Blue Ocean Strategy is all about minimizing risks due to
competition and maximizing opportunities by exploring new frontiers.
• Blue Ocean Strategy formulation and execution are guided by principles
that define and distinguish blue ocean strategy from competition-based
strategic thinking.

3. BLUE OCEAN STRATEGY- DEFINTION
• Blue ocean strategy is defined as a market in which market
boundaries and industry structure can be reconfigured through the
actions and beliefs of industry participants.
• The structure and market boundaries exist only in the minds of
managers; practitioners who hold this viewpoint do not allow existing
market structures to limit their thinking. Extra demand, they believe,
exists but is largely untapped.

4. CHARACTERISTICS OF BLUE OCEAN STRATEGY
• 1. Non Existent Industries: A Blue Ocean Strategy tends to result in
the creation of an entirely new industry as you innovate and create
highly unique and previously unseen products and services. The term
"Blue Ocean Strategy" refers to all industries that do not yet exist
• 2. Undefined Market Space: In blue ocean strategy, the market space
is unknown because it is uncontested and must be created and
developed. The producer is vaguely aware of its returns but
completely unaware of its potential, scope, and breadth of coverage
• 3. Undefined Industry Boundaries: Because these will be new
industries, the scope of the industries will be as broad as one's
imagination, creativity, and potential.

5. • 4. Unknown Competitive Rules: Market rules are not defined,
policies governing industries are not even developed, the
scope of the market, industry is only stipulated, and
competition is almost non-existent
• 5. High Profit & Growth Opportunity: When there is no risk of
an immediate competitor on the product, the industry formed
by the producer is skewed and inclined towards the producer
in every way.
• 6. Value Innovation: Blue Ocean Strategy operates on the value
innovation principle, which means that it focuses solely on an
innovative idea to create a new or improved product that is far
superior to its competitors.

6. • 7. Innovation and Creativity: Innovation and creativity are essential in this
strategy because the producer's sole goal is to create an innovative and
efficient product that either outperforms existing products far behind
technologically or is something never thought of and unheard of by everyone.
• 8. Create a Market: The advantage of going it alone as an innovator is that you
create the market for yourself, examining customer needs and segmenting the
consumer pool. You can also install utility in the product, allowing it to be
consumed by another segment of the market.
• 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.

7. PRINCIPLES OF BLUE OCEAN STRATEGY
• 1. Reconstruct Market Boundaries: This principle identifies the paths that
managers can take to create uncontested market space across diverse
industry domains, thereby reducing search risk.
• 2. Focus on the Big Picture, Not the Numbers: This principle, which
addresses planning risk, offers an alternative to the current strategic
planning process, which is frequently criticized as a number-crunching
exercise that locks companies into making incremental improvements.
• 3. Go Beyond Existing Demand: In order to create the largest market of
new demand, managers must challenge the conventional practice of
aiming for finer segmentation to better meet existing customer
preferences, which frequently results in increasingly small target markets.

8. • 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.

9. DIFFERENCE BETWEEN RED & BLUE OCEAN
STRATEGIES:
Red Ocean Strategy
• Red Oceans represent the
fiercely competitive arena where
most companies compete
• This strategy focus on the
competition within the existing
market space.
• Approach of red ocean strategy
is to beat the competition.
Blue Ocean Strategy
• Blue oceans, denote all the
industries not in existence today
the unknown market space,
untainted by competition.
• This strategy focuses on creation
of uncontested market space.
• Approach of the blue ocean
strategy is to make the
competition irrelevant

10. Red Ocean Strategy
• In Red Ocean strategy higher
weightage is given to exploit
existing demand.
• Align the whole system of a
firm’s activities with its strategic
choice of differentiation or low
cost.
• Profit opportunity of using Red
Ocean Strategy is low.
• Red Ocean strategy focuses on
existing stream of customers.
Blue Ocean Strategy
• . In Blue Ocean strategy
weightage is given to develop
future demand
• Align the whole system of a
firm’s activities in pursuit of
differentiation or low co
• Profit opportunity of using Blue
Ocean Strategy is High.
• Blue ocean strategy focuses on
creation of new customers.