Innovation is the most significant factor for any small or big company to grow and establish a position in the market. Without innovation new ideas and strategies cannot arrive and the organization could not make a mark in the market. New innovative ideas makes history.
Blue ocean vs Red Ocean
The most efficient way to maximize the profits, a company needs to build an uncontested market space that makes the competition irrelevant. In 2004, Kim and Mauborgne published their study, where they analyzed 150 companies from 30 different industries over the time span of 100 years (Kim & Mauborgne, 2005). They named two type of different markets called Blue Ocean and Red Ocean. According to their report, only the companies in Blue Ocean has succeeded to make a mark in the market. Here, the author of this capstone project distinguishes the difference between the Blue Ocean and Red Ocean strategies.
Focus on current customers vs. Focus on noncustomers. It has been seen that most of the industries don’t bother to fetch new customers but they totally concentrate on the present customers. But unlike this in Blue Ocean, the focus is always to try to fetch as many new customers as possible in order to increase the size of the industry.
Compete in existing markets vs. Create uncontested markets to serve. All the currently existing markets are doing...
Break the value cost tradeoff. Value or low cost are the only two strategies that an organization can choose from if we focus on the strategies mentioned in Michael Porter’s Competitive Strategy concepts (Porter, 1985, pp. 11-15). It is quite obvious that we cannot have both value and cost. We have to choose one and work with it. Kim and Mauborgne actually have broken this concept and created tools regarding this that gives high value and low cost. If we do not break this cost and value tradeoff, then it is easy for our competitors to copy our work and then ocean will be red again instead of...
Please join StudyMode to read the full document