Strategic Information Management - Red Ocean & Blue Ocean Strategy

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| | |THE COMPARISON OF | |BLUE OCEAN STRATEGY AND RED OCEAN STRATEGY |

| | |Author – Rukshan Fernando | | |

Table of Contents

1. Acknowledgement2

2. Introduction3

3. Red Ocean and Red Ocean Strategy4

4. Blue Ocean and The Blue Ocean Strategy5

5. Difference between Red Ocean and Blue Ocean6

6. The Four Actions Model7

7. The Eliminate – Reduce – Raise – Create grid9

9. References14

1. Acknowledgement

I would like to thank Mr. Priyanka Nishantha lecturer for giving me guidance and supporting me with the assignment and helping me to overcome problems that I faced and British School Of Commerce for the facilities provided by the computer labs and specially the library, which provided me very valuable books.

2. Introduction

The use of the Blue Ocean strategy by firms confront firms with breaking out of the vast competitiveness they face while implementing a Red Ocean strategy in the market. This is done through the exploration of uncontested market space which makes the competitor influence irrelevant to prevail in business. The Blue Ocean strategy demands firms to not divide the existing competitors. It is about increasing demand yet it is done through breaking away from competitors. The main of the Blue Ocean strategy os not to outperform competitors in the market but to create a new market space. In the current market place a strategy such as the Blue Ocean strategy would come in handy as the competition in the market has reach new heights with the introduction to new technologies. Globalization could also be considered as a key factor that has influenced firms to use the Blue Ocean strategies as trade barriers have been dismantled therefore creating a highly competitive market environment. The increasing price wars and the decreasing profit margins also influence firms to use new strategies in order to obtain better profits from the markets. To achieve that firms may use the Blue Ocean strategy as there would not be competition occurred which should be matched in order to obtain the relevant profit. The Blue Ocean strategy was created considering the value innovation which could provide the consumers with a better service through innovation and at a better value both for the consumer as well as the firm. In the twentieth century managers are forced to use a Blue Ocean strategy for their business as the Red Ocean strategies keep deteriorating due to the highly competitive nature of the global market. The supply in the global market has increased while statistics show that the population globally is in a decrease and many organizations have been producing similar products. Therefore the consumers are influenced to purchase goods and services depending on the price the products are offered at the market as similar products from different brand all poses the same ingredients and results. For an example consumers who are loyal to Colgate toothpaste might switch to crest or other similar brands depending on the price even though they have...
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