Mkt421 Week 4 Blue Ocean Strategy
Blue Ocean Strategy
First Last
Marketing - MKT/421
December 15, 2014
First Last
Blue Ocean Strategy
Have you ever wondered how a new product or service seems to appear from nowhere, then rises to the most sought after, must have in society? The term for an instance of this nature is referred as blue ocean. A description of this term comes from the notion that companies and organizations with similar products have boundaries that are defined and accepted by all competitors. These limitations lead to competition versus innovation, thus the term red ocean. According to Blue Ocean Strategy (2014), “red oceans refer to the known market space – all the industries in existence today. In red oceans, industry boundaries are clearly delineated and accepted, and the competitive rules of the game are known.” These boundaries and rules lead to companies battling to obtain the greatest share of the demand in their particular market, using subtle changes and a price difference to outshine their rivals. “Products turn into commodities, and increasing competition turns the water bloody” (Kim & Mauborgne, 2004).
A particularly well known product today that was once a blue ocean is the smart phone. At one time, the average consumer could be found carrying a cell phone, a personal digital assistant (PDA), and an MP3 player on them during the day. Cell phones were used for making and receiving calls; some had options for text messaging, but that was the extent of a mobile phone years ago. PDA’s were used to manage communication and schedules, most needing to connect directly to a PC for updates. MP3 players were devices setup to store music for playback at the request of the owner. Simply said, three devices to remain on the move in society. Apple was already one of the frontrunners in the MP3 player market with their iPod. They choose not to invent a PDA, claiming smart phones would eventually replace these devices in the future.
Numerous companies ventured into creating the first
First Last
Marketing - MKT/421
December 15, 2014
First Last
Blue Ocean Strategy
Have you ever wondered how a new product or service seems to appear from nowhere, then rises to the most sought after, must have in society? The term for an instance of this nature is referred as blue ocean. A description of this term comes from the notion that companies and organizations with similar products have boundaries that are defined and accepted by all competitors. These limitations lead to competition versus innovation, thus the term red ocean. According to Blue Ocean Strategy (2014), “red oceans refer to the known market space – all the industries in existence today. In red oceans, industry boundaries are clearly delineated and accepted, and the competitive rules of the game are known.” These boundaries and rules lead to companies battling to obtain the greatest share of the demand in their particular market, using subtle changes and a price difference to outshine their rivals. “Products turn into commodities, and increasing competition turns the water bloody” (Kim & Mauborgne, 2004).
A particularly well known product today that was once a blue ocean is the smart phone. At one time, the average consumer could be found carrying a cell phone, a personal digital assistant (PDA), and an MP3 player on them during the day. Cell phones were used for making and receiving calls; some had options for text messaging, but that was the extent of a mobile phone years ago. PDA’s were used to manage communication and schedules, most needing to connect directly to a PC for updates. MP3 players were devices setup to store music for playback at the request of the owner. Simply said, three devices to remain on the move in society. Apple was already one of the frontrunners in the MP3 player market with their iPod. They choose not to invent a PDA, claiming smart phones would eventually replace these devices in the future.
Numerous companies ventured into creating the first
References: Kim, W. C., & Mauborgne, R. (2004). BLUE OCEAN STRATEGY. Harvard Business Review, 82(10), 76-84. Red oceans. (2014). In Blue ocean strategy. Retrieved from http://www.blueoceanstrategy.com/concepts/glossary/glossary-red-oceans/