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MG4037 Week 6 Tutorial 3 Competitive Advantage Blue And Red Ocean Strategy

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MG4037 Week 6 Tutorial 3 Competitive Advantage Blue And Red Ocean Strategy
MG4037 Tutorial 3 Week 6

Competitive Advantate - Blue and Red Ocean
Strategy

Orla.Fahy@ul.ie

Class Discussion:
Is a Blue Ocean strategy always superior to a Red
Ocean Strategy?

Why do companies get trapped in a Red Ocean?
Icarus Paradox
Red Queen Effect
Blue Ocean Pioneering Costs:
First Mover Advantage and Fast Followers/Late Movers

Isomorphism

Assignment 2
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MG4037 Tutorial 3 Week 6

Competitive Advantate - Blue and Red Ocean
Strategy

Class Discussion: Is a Blue Ocean strategy always superior to a Red Ocean
Strategy?

3

Organizational success creates a strategic mind-set that leads to failure:
Generic Strategy Trap
Specialization has distinct risks and disadvantages

Icarus Paradox
How exceptional companies bring about their own downfall

Red Queen Effect
Must exert ever more effort just to maintain current position

Blue Ocean Pioneering Costs
Costs associated with entering an untapped market

Isomorphism
Propensity of firms to imitate one another

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MG4037 Tutorial 3 Week 6

Competitive Advantate - Blue and Red Ocean
Strategy

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Basic Idea:
When an organization encounters competition they attempt to improve and come up with new solutions
If they are successful, rivals attempt to improve and come up with new solutions
If rivals are successful the organization is again faced with new challenges, and the cycle starts again.
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MG4037 Tutorial 3 Week 6

Competitive Advantate - Blue and Red Ocean
Strategy

“Applied to a business context, the Red Queen can be seen as a contest in which each firm’s performance depends on the firm’s matching or exceeding the actions of rivals. In these contests, performance increases gained by one firm as a result of innovative actions tend to lead to a performance decrease in other firms. The only way rival firms in such competitive races can maintain their performance relative to others is by taking actions of their own.
Each firm is forced by the others in an industry to participate in continuous and

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