When companies mistakenly assume that blue ocean strategy is synonymous with differentiation, they tend to focus on what to improve and create to stand apart and pay scant heed to what they can eliminate and reduce to simultaneously achieve low cost. Value innovation is the simultaneous pursuit of differentiation and low cost. Learn the basics of blue ocean strategy and shift created by the #1 Management Thinkers in the World. This is a key principle of blue ocean strategy which sees low cost and differentiation being pursued simultaneously. The belief that to create a blue ocean, you must be first to market. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. #BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start creating your #blueocean. There is ample opportunity for growth that is both profitable and rapid. In contrast, those who attempt a blue ocean strategy aim to achieve differentiation and at the same time, low cost. Here strategy is seen as making a choice between differentiation and low cost.21 In contrast, those that seek to create blue oceans pursue differentiation and low cost simultaneously.” ― W. Chan Kim, Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant The Blue Ocean Strategy argues that consumers don’t have to choose between value and affordability. Quizlet flashcards, activities and games help you improve Unlike red ocean strategists, they see strategy not as an either-or, but as a both-and approach that breaks Creating blue oceans is non-zero They pursue differentiation and low cost simultaneously. It is about pursuing differentiation and low cost simultaneously. 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. Blue ocean strategy is an “and-and,” not an “either-or,” strategy. Red Ocean vs Blue Ocean Structuralist view Reconstructionist view *Key Determining Factors: Align the whole system of a firm’s activities in pursuit of differentiation and low cost. It is about pursuing differentiation and low cost simultaneously. Blue ocean strategists do not view value and cost as a trade-off. A Red They focus on exploiting existing demand. Under traditional competitive strategy differentiation is achieved by providing premium value at a higher cost to the company and at a higher price for customers. For anyone tired of competing head-to-head and not getting far. In this presentation I'll … In this presentation I'll … Slideshare uses cookies to improve functionality and performance, and to … But are they also low cost? A business-like Cirque de Soleil can achieve a positive return on investment for both itself and its clients by driving down costs while concurrently driving up value for the customer. Hence the term red oceans. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. A blue ocean strategy differs from a low-cost strategy in that A. the intent of a blue ocean strategy is not to be the absolute lowest-cost provider because a blue ocean must also increase perceived value. iTunes solved the problem of recording industries when it started the business. Blue Ocean Strategy & Shift Tools © Chan Kim & Renee Mauborgne (2004-2021), We use cookies to ensure you get the best experience on our website and continuing implies your consent -. Blue ocean strategy, by contrast, is about breaking the value-cost trade-off to open up new market space. Slides about blue ocean strategy . If you truly have a blue ocean mindset, you do both. Yes again. ( www.blueoceanstrategy.com ). new type of entertainment, they were able to incorporate two industries. It is the cornerstone of blue ocean strategy, market-creating strategy. In essence, a blue ocean strategy notates that differentiation and low cost for consumers can both coexist. The misconception that blue ocean strategy is a low-cost strategy that Blue ocean strategy is about pursuing both differentiation and low cost and is created by W. Chan Kim and Renée Mauborgne. #BlueOceanShift and #BlueOceanStrategy are worldwide business strategy bestsellers, helping you to move beyond competing and start creating your #blueocean. Once a blue ocean is discovered, management must clearly formulate the Blue Ocean Strategy and take the actual actions to implement the new strategy. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. firm’s activities with its strategic • Align the whole system of a firm’s choice of differentiation or low activities with its strategic choice cost. Blue ocean strategy, by contrast, is about breaking the value-cost trade-off to open up new market space.