Blue Ocean Strategy. Crocs, Nintendo Wii

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INTRODUCTION TO THE BLUE OCEAN STRATEGY
The Blue Ocean Strategy (BOS) concept is known to us since 1995 on a book titled “Blue Ocean Strategy” written by W. Chan Kim in which the book was a success and being translated into over 40 languages (Bryan, 2006). However, the concept that the author described had been used in practice decades ago. In this write up, focus will be given on introducing the blue ocean strategy concept and examples from Crocs incorporation and Nintendo incorporation to discuss the relevance and importance of BOS in today’s business environment. In today’s competitive business environment, many companies and organizations compete in the defined and existing market space and are racing each other for an attempt to out-compete their competitors. They make the value-cost trade-off and are struggling within the competition to exploit the existing market demand (Kim & Mauborgne, 2010). Hence, these companies often result in the strategic move of trying to differentiate their products/services from their competitors or they compete based on low cost. The business environment being described above is termed the red ocean whereby the market is saturated by competition. However, Blue Ocean is being described as a business environment whereby no competition is present. Blue ocean strategy is a strategic move in which a company would take to create market in an uncontested market space and therefore making market competition irrelevant. The aim of the strategy is to capture and to create new market demand and to break the value-cost trade-off. Blue ocean strategy also involves in aligning the firm’s strategy to achieve differentiation of products/services and low cost simultaneously. This strategy is becoming immensely important in today’s business environment despite that business in the red ocean is inevitable as blue ocean strategy would help a company to grab a greater market share by targeting non-market customers and ultimately lead to increased sales (Bryan, 2006). THEORIES OF BOS AND ITS APPLICATION IN NINTENDO & CROCS INCORPORATION Blue ocean strategy involves in creating a value innovation in which the buyer value will be increased as well as decreasing the cost of the product. In creating the value innovation, several principles have to be fulfilled in order to enhance the success in implementing BOS such as reconstructing the market boundaries, focusing on the aim of the strategy, knowing the way to reach outside existing demand and to overcome key organizational obstacles. By using a strategy canvas, companies can have a diagnostic and a visual action framework to identify how to introduce BOS in their products as the strategy canvas would enable the understanding of where the current competition is taking place in the industry itself. Besides that it will also show what customers are receiving from the products/services in the industry. Based on this canvas, companies can adjust their strategy accordingly by lowering certain aspects while strongly focusing on a specific aspect.

Figure 1: Figure displaying the visualized strategy canvas for Crocs incorporation. (Jennifer, 2009)

Figure 2: Figure displaying the visualized strategy canvas for Nintendo incorporation. (Patricio, 2008) By referring to figure 1, we can see how Crocs utilizes blue ocean strategy to compete outside the market demand through differentiation and lower the cost of production. In the strategy canvas, the horizontal axis shows the features that a typical shoe industry has to offer and how Crocs position themselves in the industry. Crocs reduces cost by de-emphasizing on shoe boxes and packaging, premium hand sewed feature, variety of materials involved and strongly focusing on features such as purchase accessibility, fashionable design, durability, functionality, comfort, colorful, and fun to wear. Through this strategy, Crocs achieved great success since the day it...
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