The Blue Ocean Strategy

The aim of the research paper is to develop a deeper understanding of the Blue Ocean Strategy. With the research the student will understand the Blue Ocean Strategy and manage to use it when doing a business. The Blue Ocean Strategy consists of strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map and blue ocean idea index. This concept is very effective and can make a business person successful. In blue ocean, demand is created not to fought over. Blue Ocean is not about technology innovation.

Keywords- Blue ocean strategy, ERRC, strategy canvas,value curve,market boundaries.

Introduction

Do you ever think that your business actually can be in a league of its own? How if you can set
Blue ocean strategy is different from red ocean strategy. Red ocean strategy is competing in existing market space, however the blue ocean strategy create uncontested market space. The second difference between Red Ocean and Blue Ocean strategy is, Red Ocean beat the competition and the Blue Ocean makes the competition irrelevant. Red Ocean also exploits existing demand and makes the value-cost trade off. But, Blue Ocean creates and captures new demand and break the value-cost trade-off. Furthermore, Blue Ocean also aligns the whole system of a firm’s activities in pursuit of differentiation and low cost. The Red Ocean strategy focusing in aligns the whole system of a firm’s activities with its strategic choice of differentiation or low cost. The last difference between the Red Ocean and Blue Ocean is, Red Ocean use the value creation or addition concept, but Blue Ocean focusing in value innovation which is innovative
The first principle of Blue Ocean strategy is reach beyond the existing demand. For those who want to success in their business they should think out of box. They need to discover the new demand of the customer rather than stuck and drowned in the red ocean. There are three types of customers that need to be explores. The first type is first tier or soon to be. This type of customer is actually non-customers who are on the edge of the market, who waiting to jump ship. The second tier is the refusing non-customers who consciously choose against the market. Third tier is unexplored non customers who are in markets distant from the markets. Blue Ocean strategy is focusing to get largest catchment of non-customers. With this principle, the organization can control the new market, get more customers, fix the price and gain profit. Secondly, blue ocean strategy is using the principle reconstruct market boundaries. When the organization reconstructs market boundaries, other companies cannot easily jump into the market. There are 6 pathways to reconstruct the market boundaries which are across alternate industry, across strategic groups, across buyer groups, across complementary scope of products and services, across functional emotional orientation and across time. This strategy also more focus on the big picture and not the numbers. The organizations that practice the blue ocean