Blue Ocean Strategy Kim And Mauborgne Pdf
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This blog article is a overview of some of the key points of the book by W. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. Click the link above or the picture below to read more.
- The W. Chan Kim and Renee Mauborgne Blue Ocean Strategy Reader
- Summary of Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne
- Blue Ocean Strategy
The W. Chan Kim and Renee Mauborgne Blue Ocean Strategy Reader
Despite a long-term decline in the circus industry, Cirque du Soleil profitably increased revenue fold over the last ten years by reinventing the circus. Rather than competing within the confines of the existing industry or trying to steal customers from rivals, Cirque developed uncontested market space that made the competition irrelevant. Cirque created what the authors call a blue ocean, a previously unknown market space. In blue oceans, demand is created rather than fought over.
There is ample opportunity for growth that is both profitable and rapid. In red oceans—that is, in all the industries already existing—companies compete by grabbing for a greater share of limited demand. As the market space gets more crowded, prospects for profits and growth decline. Products turn into commodities, and increasing competition turns the water bloody. There are two ways to create blue oceans. One is to launch completely new industries, as eBay did with online auctions.
In studying more than blue ocean creations in over 30 industries, the authors observed that the traditional units of strategic analysis—company and industry—are of limited use in explaining how and why blue oceans are created. The most appropriate unit of analysis is the strategic move, the set of managerial actions and decisions involved in making a major market-creating business offering.
Creating blue oceans builds brands. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades. Competing in overcrowded industries is no way to sustain high performance.
The real opportunity is to create blue oceans of uncontested market space. The best way to drive profitable growth? Stop competing in overcrowded industries. In those red oceans , companies try to outperform rivals to grab bigger slices of existing demand.
As the space gets increasingly crowded, profit and growth prospects shrink. Products become commoditized. Ever-more-intense competition turns the water bloody. How to avoid the fray? Kim and Mauborgne recommend creating blue oceans —uncontested market spaces where the competition is irrelevant. In blue oceans, you invent and capture new demand, and you offer customers a leap in value while also streamlining your costs. Handsome profits, speedy growth—and brand equity that lasts for decades while rivals scramble to catch up.
Consider Cirque du Soleil—which invented a new industry that combined elements from traditional circus with elements drawn from sophisticated theater. In just 20 years, Cirque raked in revenues that Ringling Bros.
Founded in by a group of street performers, Cirque has staged dozens of productions seen by some 40 million people in 90 cities around the world. In 20 years, Cirque has achieved revenues that Ringling Bros. You have 2 free article s left this month. You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Blue Ocean Strategy. Chan Kim and Renee Mauborgne. The Idea in Brief The best way to drive profitable growth?
The Idea in Practice How to begin creating blue oceans? Blue oceans seldom result from technological innovation. Often, the underlying technology already exists—and blue ocean creators link it to what buyers value. Compaq, for example, used existing technologies to create its ProSignia server, which gave buyers twice the file and print capability of the minicomputer at one-third the price.
Most blue oceans are created from within, not beyond, the red oceans of existing industries. Incumbents often create blue oceans within their core businesses. Consider the megaplexes introduced by AMC—an established player in the movie-theater industry. Megaplexes provided movie-goers spectacular viewing experiences in stadium-size theater complexes at lower costs to theater owners. Instead, make the competition irrelevant by creating a leap in value for both yourself and your customers.
Ford did this with the Model T. Ford could have tried besting the fashionable, customized cars that wealthy people bought for weekend jaunts in the countryside. Reduce your costs while also offering customers more value.
Cirque du Soleil omitted costly elements of traditional circus, such as animal acts and aisle concessions. Its reduced cost structure enabled it to provide sophisticated elements from theater that appealed to adult audiences—such as themes, original scores, and enchanting sets, all of which change year to year.
The added value lured adults who had not gone to a circus for years and enticed them to come back more frequently—thereby increasing revenues. By offering the best of circus and theater, Cirque created a market space that, as yet, has no name—and no equals. A version of this article appeared in the October issue of Harvard Business Review. For HBR Subscribers. See www. She is coauthor, along with W. This is a subscriber-only article. Subscribe Now I'm already a subscriber.
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Summary of Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne
Blue Ocean Strategy challenges the common belief that you have to outcompete your business rivals to achieve sustained profitability. Plus, it offers an alternative. The alternative is to make your competitors irrelevant through innovation and creating your own market. This new market is called your blue ocean. Being able to innovate is becoming increasingly important, with markets becoming saturated and profit margins being squeezed due to competition.
Blue Ocean Strategy is a book published in written by W. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant. The book presents analytical frameworks and tools to foster an organization's ability to systematically create and capture "blue oceans"—unexplored new market areas. The book is divided into three parts: . The first part presents key concepts of blue ocean strategy, including Value Innovation — the simultaneous pursuit of differentiation and low cost — and key analytical tools and frameworks such as the strategy canvas and the four actions framework.
Despite a long-term decline in the circus industry, Cirque du Soleil profitably increased revenue fold over the last ten years by reinventing the circus. Rather than competing within the confines of the existing industry or trying to steal customers from rivals, Cirque developed uncontested market space that made the competition irrelevant. Cirque created what the authors call a blue ocean, a previously unknown market space. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In red oceans—that is, in all the industries already existing—companies compete by grabbing for a greater share of limited demand.
Blue Ocean Strategy
As a business owner or manager, do you regularly focus on your competition? Most businesses are focused on their competitors as they try to take control of a large slice of the market. While that is certainly a logical and time-tested method, the relatively new Blue Ocean Strategy is an innovative way to think about business. Rather than fighting toe-to-toe with your competitors for market share, this strategy instead encourages businesses to seek out uncontested market space that they can have all to their own.
Social sector application and research, including such topics as how Blue Ocean Strategy can be applied in the developing world to mitigate poverty and improve education and health. Empirical analysis has been focused on case study evidence and so lacks generality to resolve the debate. We provide a methodological synthesis of the theories enabling. Red Oceans vs.
Finally, New Year is here! Creating and leading a truly successful business is becoming increasingly difficult in a globalized world. Markets are overcrowded, customers always have a cheaper option available — and they will usually buy it.
The best of W. Chan Kim and Renee Mauborgne's articles on blue ocean strategy, all in one place. The seminal book "Blue Ocean Strategy" has sold over 3.