Blue Ocean Strategy
BLUE OCEAN STRATEGY
Ryan Rosenbaum
Donald Gregory
Businesses are always striving to be the better contenders than their competitors. Different theories have been thrown out to see which the best one would be. The Blue Ocean Strategy theory says that companies would be better looking for ways in which they compete against themselves and that is all. W. Chan Kim and Renee Mauborgne wrote a book called “Blue Ocean Strategy”. There is a term called Red Ocean which consists of businesses are viciously fighting against each other for their place in the specific marketplace. These two authors then came up with the idea of the Blue Ocean Strategy where organizations are able to find a way to work in the marketplace that isn’t bloodied by the competition and is free of competitors. The Blue Ocean Strategy is based where a study of 150 strategic moves spanning over 30 different industries. In the book, the authors argue that leading companies will succeed not by battling competitors, but by steadily creating "blue oceans" of recognized market space ripe for growth. The strategy is the simultaneous pursuit of differentiation and low cost, with the theory behind it not to out-perform the competition in the existing industry, but to create new market space or a "blue ocean," thereby making the competition unrelated. Toyota Motor Corporation has moved from being a process innovation to becoming a product innovator thanks to its Value Innovation Strategy. Value Innovation is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company. Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price, and cost is aligned. A Red Ocean Strategy is a strategy which is aims to fight and beat the competition. In this case Toyota
Ryan Rosenbaum
Donald Gregory
Businesses are always striving to be the better contenders than their competitors. Different theories have been thrown out to see which the best one would be. The Blue Ocean Strategy theory says that companies would be better looking for ways in which they compete against themselves and that is all. W. Chan Kim and Renee Mauborgne wrote a book called “Blue Ocean Strategy”. There is a term called Red Ocean which consists of businesses are viciously fighting against each other for their place in the specific marketplace. These two authors then came up with the idea of the Blue Ocean Strategy where organizations are able to find a way to work in the marketplace that isn’t bloodied by the competition and is free of competitors. The Blue Ocean Strategy is based where a study of 150 strategic moves spanning over 30 different industries. In the book, the authors argue that leading companies will succeed not by battling competitors, but by steadily creating "blue oceans" of recognized market space ripe for growth. The strategy is the simultaneous pursuit of differentiation and low cost, with the theory behind it not to out-perform the competition in the existing industry, but to create new market space or a "blue ocean," thereby making the competition unrelated. Toyota Motor Corporation has moved from being a process innovation to becoming a product innovator thanks to its Value Innovation Strategy. Value Innovation is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company. Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price, and cost is aligned. A Red Ocean Strategy is a strategy which is aims to fight and beat the competition. In this case Toyota