We all know well about Red-Blue Ocean Strategy, how each ocean colour are works. Your Reason has been Reported to the admin. 15 Responses to Red Ocean vs. Blue Ocean. Definition: 'Blue Ocean Strategy is referred to a market for a product where there is no competition or very less competition. Having crunched the data they came up with a step-by-step process to find new spaces in … The concept of "blue ocean strategy" first took the business world by storm in 2005 when authors W. Chan Kim and Renee Mauborgne wrote a bestselling book, "Blue Ocean Strategy," which has been translated into 43 languages. Therefore you are not competing with your competitors, but rather you are meeting needs in a segment of the market that the other competitors have overlooked. Scorpio was the first SUV launched by M&M, and it has been a huge success since it was launched. India in 2030: safe, sustainable and digital, Hunt for the brightest engineers in India, Gold standard for rating CSR activities by corporates, Proposed definitions will be considered for inclusion in the Economictimes.com, The five forces model of analysis was developed by Michael Porter to analyze the competitive environment in which a product or company works. The Blue Ocean Strategy (BOS) is the strategic organizational approach that is based on the principle that companies should not engage in a competitive struggle but that they should focus more on uncontested markets. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players. In W. Chan Kim and Renée Mauborgne’s latest book, Blue Ocean Shift, they outline three components to a blue ocean strategy: In Red Oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Implementing the blue ocean strategy is, simply put, a gargantuan task. Blue Ocean Strategy suggests that an organization should create new demand in an uncontested market space,… Description: Reference pricing, in simple terms, is known as that price which users compare with, Loss leaders are high volume, high profile brands or products that are sold by retailers with the intention to attract customers into their premises, with the hope that those customers will end up buying other goods as well, once inside. Conspicuous consumption is the practice of purchasing goods or services to publicly display wealth rather than to cover basic needs. The value curve of blue ocean strategy always stands apart from the competitors. a strategy adopted by a financial institution in which the institution ventures into a new uncontested area, called a blue ocean, rather than go for competition in an existing area. The goal of a Blue Ocean Strategy is for organizations to find and develop “blue oceans” (uncontested, growing markets) and avoid “red oceans” (overdeveloped, saturated markets). Blue Ocean Strategy has been developed by W. Chan Kim and Renée Mauborgne and is based on a study of 150 strategic moves in the course of one hundred years and over thirty industries like Apple, Cirque Du Soleil, Yellow Tail and Air Asia. It refers to a situation in which a company or product seeks to ride on the publicity value of a major event without having contributed to the financing of the event through sponsorship. Most blue oceans are created from within red oceans by expanding existing industry boundaries. Of course any strategy will always involve risks – be it red or blue. 2, Endorsements are a form of advertising that uses famous personalities or celebrities who command a high degree of recognition, trust, respect or awareness amongst the people. This kind of spending is generally made by people who have considerable amount of disposable income to spend on goods and services which are not necessary, but are more luxurious in nature. Some activities should be eliminated and new activities should be introduced. This strategy, which is based on extensive research of hundreds of companies spanning across decades and including several industries, proclaims that instead of battling competitors, companies can create new markets for themselves. good, concise article. Tia: November 19, 2009 at 12:49 am. They are not just consumers of the product, but play a major role in its promotion. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne. 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We’ll cover 15+ Blue Ocean Strategy examples so you can figure out how to create your own blue ocean. It gives them a sense of belonging which is very important for brand tribe to exist. Over a period of time, M&M was able to build a customer-base who would only drive Scorpio. Never miss a great news story!Get instant notifications from Economic TimesAllowNot now. Blue Ocean Strategy is a book published in 2004 written by W. Chan Kim and Renée Mauborgne, professors at INSEAD, and the name of the marketing theory detailed on the book. Blue ocean strategy is a business plan of action developed by W. Chan Kim and Renée Mauborgne and detailed in their 2005 book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. It is about growing demand and breaking away from the competition. Blue oceans, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. Definition: A brand tribe could be regarded as a group of people who collectively identify themselves with the product and share similar views and notions about the brand. A blue ocean is vast, deep, and powerful in terms of profitable growth. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. Their iconic and impactful books, Blue Ocean Strategy and Blue Ocean Shift, provide a systematic approach to making the competition irrelevant and tools any organisation can use to shift from red oceans of bloody competition to blue oceans …