Blue Ocean Strategy Tools Analysis
Real-world Business Analysis:
Blue Ocean Strategy Tools Analysis Paper
MMBA-6570 Business Strategy for a Competitive Advantage
Dr. Schulz
Stephenie Wegmann
April 15, 2013
Introduction
The purpose of the blue ocean strategy is to focus on making the business itself better without focusing on the competition. Kim and Mauborgne (2005) state that “blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant” (p. x). There are several analytical tools that have been created to challenge companies to become part of the blue ocean.
Reconstructing market boundaries to break from the competition is the first principle of the blue ocean strategy, and this concept is known as the six paths framework (Kim & Mauborgne, 2005). Research showed that the following six assumptions keep companies trapped in creating red oceans: (1) define their industry similarly and focus on being the best within it, (2) look at their industries through the lens of generally accepted strategic groups and strive to stand out in the strategic group they play in, (3) focus on the same buyer group, (4) define the scope of the products and services offered by their industry similarly, (5) accept their industry’s functional or emotional orientation and (6) focus on the same point in time – and often on current competitive threats – in formulating strategy (Kim & Mauborgne, 2005). In order for companies to gain insight on how to reconstruct their market realities, companies must stop focusing on these constrictive boundaries.
Kim & Mauborgne (2005) also discuss that “the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy; the value curve is a graphic depiction of a company’s relative performance across its industry’s factors of competition” (p. 25 & 27). Basically, the concept of the strategy canvas is to base
Blue Ocean Strategy Tools Analysis Paper
MMBA-6570 Business Strategy for a Competitive Advantage
Dr. Schulz
Stephenie Wegmann
April 15, 2013
Introduction
The purpose of the blue ocean strategy is to focus on making the business itself better without focusing on the competition. Kim and Mauborgne (2005) state that “blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant” (p. x). There are several analytical tools that have been created to challenge companies to become part of the blue ocean.
Reconstructing market boundaries to break from the competition is the first principle of the blue ocean strategy, and this concept is known as the six paths framework (Kim & Mauborgne, 2005). Research showed that the following six assumptions keep companies trapped in creating red oceans: (1) define their industry similarly and focus on being the best within it, (2) look at their industries through the lens of generally accepted strategic groups and strive to stand out in the strategic group they play in, (3) focus on the same buyer group, (4) define the scope of the products and services offered by their industry similarly, (5) accept their industry’s functional or emotional orientation and (6) focus on the same point in time – and often on current competitive threats – in formulating strategy (Kim & Mauborgne, 2005). In order for companies to gain insight on how to reconstruct their market realities, companies must stop focusing on these constrictive boundaries.
Kim & Mauborgne (2005) also discuss that “the strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean strategy; the value curve is a graphic depiction of a company’s relative performance across its industry’s factors of competition” (p. 25 & 27). Basically, the concept of the strategy canvas is to base
References: Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston: Harvard Business School Press. Kim, W. C., & Mauborgne, R. (2012). Blue Ocean Strategy. In Glossary. Retrieved April 14, 2013, from http://www.blueoceanstrategy.com/about/glossary/.