Blue Ocean
BOOK REVIEW
The book, Blue Ocean Strategy -How to create Uncontested Market Space and Make competition Irrelevant , authored by W. Chan Kim and Renne Mauborgne is the best seller of its time. It is a widely accepted book for strategy professionals. The title indicates the theme of the book .This book promises to achieve the uncontested market space and make competition irrelevant by making the use of Blue ocean strategy. The book argues that companies in existence today should not try to beat the competition but follow the blue ocean strategy approach to succeed in today's hyper competitive market space.
The book defines the Red oceans as the industries that are in existence today .The boundaries of companies in Red Ocean are well defined and rules of competition are well known. These companies try to grab each other's market share .But the increasing competition resulting from globalization, virtually constant demand and ever increasing supply has given hard time to the red ocean companies leading to commoditization of products and services which further causes price wars and lower profit margins .The red ocean strategy offers limited growth for the companies. To overcome the challenges of red oceans, companies operating today should look beyond its current environments and boundaries to grab new growth opportunities.
Blue oceans are the industries nonexistent today (unknown market space) and have no well defined rules and almost no competition. Blue oceans lead to new demand creation and offer huge growth potential.
The key feature of the blue ocean strategy is what authors call as value innovation'. The value innovation leads to a leap in value for buyers and companies. Buyers are benefit by increased value and companies benefit by reduced cost structure .This contradicts with Porter's generic framework of cost leadership and differentiation .Value innovation also nullifies the traditional value cost tradeoff. Value innovation enables companies to follow
The book, Blue Ocean Strategy -How to create Uncontested Market Space and Make competition Irrelevant , authored by W. Chan Kim and Renne Mauborgne is the best seller of its time. It is a widely accepted book for strategy professionals. The title indicates the theme of the book .This book promises to achieve the uncontested market space and make competition irrelevant by making the use of Blue ocean strategy. The book argues that companies in existence today should not try to beat the competition but follow the blue ocean strategy approach to succeed in today's hyper competitive market space.
The book defines the Red oceans as the industries that are in existence today .The boundaries of companies in Red Ocean are well defined and rules of competition are well known. These companies try to grab each other's market share .But the increasing competition resulting from globalization, virtually constant demand and ever increasing supply has given hard time to the red ocean companies leading to commoditization of products and services which further causes price wars and lower profit margins .The red ocean strategy offers limited growth for the companies. To overcome the challenges of red oceans, companies operating today should look beyond its current environments and boundaries to grab new growth opportunities.
Blue oceans are the industries nonexistent today (unknown market space) and have no well defined rules and almost no competition. Blue oceans lead to new demand creation and offer huge growth potential.
The key feature of the blue ocean strategy is what authors call as value innovation'. The value innovation leads to a leap in value for buyers and companies. Buyers are benefit by increased value and companies benefit by reduced cost structure .This contradicts with Porter's generic framework of cost leadership and differentiation .Value innovation also nullifies the traditional value cost tradeoff. Value innovation enables companies to follow