Blue Ocean Strategy Analysis of Wikipedia
Wikipedia: A Blue Ocean Strategy
Section A: Group 4
Analysis of Wikipedia, as a Blue Ocean Strategy
Wikipedia, the collaboratively edited free internet encyclopaedia is a household name. Launched in 2001 by Jimmy Wales and Larry Sanger, it has now grown to be the seventh most visited website with approximately 365 million users worldwide. How is it that the small encyclopaedia market grew more than a hundred times in the space of 8-10 years and changed its orientation in such a path breaking manner? It all has to do with the departure from expert driven style of encyclopaedia building to a collaboratively edited work by volunteers and users around the world which gave much more value to the customer in lower cost. The case of Wikipedia is a classic case of Blue Ocean Strategy in practical usage that expanded boundaries of a meagre market to enter an uncontested market space. The strategy canvas for the existing online encyclopaedia market (when Wikipedia entered in 2001) may be as shown in the below figure:
The value proposition offered by Wikipedia was markedly different from that being currently offered by the online encyclopaedias (dominated by www.brittanica.com). Wikipedia added a missing component of people participation into the scheme of things. They realized that the main use of the encyclopaedia was to gain quick and easy-to access information on a particular topic. The costs that went into copyright and into proofreading
Wikipedia: A Blue Ocean Strategy
Section A: Group 4
by experts were unnecessary and part of it could be outsourced to the users themselves. The involvement of users combined with the hits through google automatically generated popularity and advertising wasn’t needed. All this reduced costs and generated value at the same time. The Value proposition of Wikipedia may be easily understood through the ERRC Grid as shown below:
Eliminate
•Subscription fees •Distracting Advertisements •Copyright restrictions on reuse
Section A: Group 4
Analysis of Wikipedia, as a Blue Ocean Strategy
Wikipedia, the collaboratively edited free internet encyclopaedia is a household name. Launched in 2001 by Jimmy Wales and Larry Sanger, it has now grown to be the seventh most visited website with approximately 365 million users worldwide. How is it that the small encyclopaedia market grew more than a hundred times in the space of 8-10 years and changed its orientation in such a path breaking manner? It all has to do with the departure from expert driven style of encyclopaedia building to a collaboratively edited work by volunteers and users around the world which gave much more value to the customer in lower cost. The case of Wikipedia is a classic case of Blue Ocean Strategy in practical usage that expanded boundaries of a meagre market to enter an uncontested market space. The strategy canvas for the existing online encyclopaedia market (when Wikipedia entered in 2001) may be as shown in the below figure:
The value proposition offered by Wikipedia was markedly different from that being currently offered by the online encyclopaedias (dominated by www.brittanica.com). Wikipedia added a missing component of people participation into the scheme of things. They realized that the main use of the encyclopaedia was to gain quick and easy-to access information on a particular topic. The costs that went into copyright and into proofreading
Wikipedia: A Blue Ocean Strategy
Section A: Group 4
by experts were unnecessary and part of it could be outsourced to the users themselves. The involvement of users combined with the hits through google automatically generated popularity and advertising wasn’t needed. All this reduced costs and generated value at the same time. The Value proposition of Wikipedia may be easily understood through the ERRC Grid as shown below:
Eliminate
•Subscription fees •Distracting Advertisements •Copyright restrictions on reuse