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    Blue Ocean Strategy

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    siddharthbhargavaofficial
    The document discusses the concept of blue ocean strategy using Cirque du Soleil as an example. It summarizes that Cirque du Soleil was able to turnaround its declining circus business by creating an uncontested market space that made competition irrelevant and pulled in non-customers. This created a "blue ocean" of unknown market space untapped by competition, compared to the "red oceans" of known, contested markets. The document contrasts blue ocean strategies of creating new market space with red ocean strategies of competing within existing industry boundaries.

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    Blue Ocean Strategy

    Uploaded by

    siddharthbhargavaofficial
    27 views19 pages
    The document discusses the concept of blue ocean strategy using Cirque du Soleil as an example. It summarizes that Cirque du Soleil was able to turnaround its declining circus business by creating an uncontested market space that made competition irrelevant and pulled in non-customers. This created a "blue ocean" of unknown market space untapped by competition, compared to the "red oceans" of known, contested markets. The document contrasts blue ocean strategies of creating new market space with red ocean strategies of competing within existing industry boundaries.

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    The document discusses the concept of blue ocean strategy using Cirque du Soleil as an example. It summarizes that Cirque du Soleil was able to turnaround its declining circus business by creating an uncontested market space that made competition irrelevant and pulled in non-customers. This created a "blue ocean" of unknown market space untapped by competition, compared to the "red oceans" of known, contested markets. The document contrasts blue ocean strategies of creating new market space with red ocean strategies of competing within existing industry boundaries.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views19 pages

    Blue Ocean Strategy

    Uploaded by

    siddharthbhargavaofficial
    The document discusses the concept of blue ocean strategy using Cirque du Soleil as an example. It summarizes that Cirque du Soleil was able to turnaround its declining circus business by creating an uncontested market space that made competition irrelevant and pulled in non-customers. This created a "blue ocean" of unknown market space untapped by competition, compared to the "red oceans" of known, contested markets. The document contrasts blue ocean strategies of creating new market space with red ocean strategies of competing within existing industry boundaries.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 19

    Blue Ocean Strategy

    Introduction
    • The turnaround of Cirque du Soleil
    – Circus business in long term decline.
    – Alternative forms of entertainment available
    – Children preferred playstations
    – Animal rights
    – Decreasing audiences
    – Increasing costs
    – Profitability increased by a factor of 22 in 10 years
    Continued
    • Created uncontested market space
    • Made competition irrelevant
    • Pulled in non-customers
    The Difference
    Red Oceans Blue Oceans
    • Known market space • Not in existence today
    • Industry boundaries defined • Unknown
    • Competitive rules • Untouched by competition
    understood • Demand is created
    • Try to outperform rivals • Completely new industries
    • Grab a share of demand – eBay with auctions
    • Created within red ocean
    – Cirque du Soleil
    Blue & Red Oceans
    • Which industries were unknown 100 years back
    • What about 30 years
    • What about 5 years
    – Blue oceans will remain the engines of growth
    • Prospects in red oceans are shrinking
    • Technological advances have improved productivity
    • Trade barriers are being overcome
    • Niches and monopolies disappearing
    • Supply is overtaking demand
    • Population on decline in many developed economies
    Paradox of strategy
    • Linked to competition
    • Roots in military strategy
    • Driven to outperform rivals
    Towards Blue Ocean Strategy
    • Not about technology innovation
    – Not a defining feature
    – Ford’s assembly line was already in existence
    – Linking technology to what buyers value is critical
    Examples
    Examples
    Key takeaways
    • Incumbents not at a disadvantage
    • Created within their businesses
    • New markets are not found in distant waters
    – Need to study strategic moves or set of
    managerial action and decision involved in making
    a business offering
    – Compaq – acquired by HP
    – Remarkable work done in PC servers
    • Blue Ocean creates brand equity.
    Continued….
    Defining characteristic
    • Differentiation and low cost simultaneously.
    – Fun and thrill of circus with the artistic appeal of
    theatre
    – Clowns, tents and acrobatic acts
    – Theatre performance with a theme and story line
    – Broadway based
    – Driving down costs and driving up value
    Continued
    • In red oceans, industry structural conditions are
    given and firms compete
    – Environmental determinism
    • Market boundaries and industries reconstructed
    by the actions and beliefs of industry players
    • Barriers to imitation
    • Attract customers – scale economies (walmart)
    • Network externalities (eBay)
    Continued
    • Imitation requires a whole slew of changes
    – Is it so simple to imitate Southwest’s low cost
    strategy
    • Conflict with existing brand image
    – Body Shop shuns top models
    – Imitation is difficult for traditional brands like
    Estee Lauder
    Red Ocean Traps
    • Market creating strategies as customer
    oriented approaches
    – Is the customer really the King?
    – Focus on non customers. Why no patronage?
    – Why did Sony’s PRS not capture market in 2006?
    – Kindle sold out within 6 hours of release
    Red Ocean Traps
    • Treating Market Creating Strategies as Niche
    Strategies
    – Uncovering a niche is not the same thing as
    identifying a new market space
    – Song launched by Delta Airlines for Women
    – Strive towards desegmenting the market
    Red Ocean Traps
    • Confusing Technology Innovation with
    Market-Creating Strategies
    – Yellow Tail opened a new market without any
    bleeding-edge technologies.
    – So did the coffee chain Starbucks
    – Segway Personal Transporter
    Red Ocean Traps
    • Equating Creative Destruction with Market
    Creation
    – Does Market creation always involve destruction?
    – Grameen bank and work in microfinance
    • It is not differentiation
    – Breaks the value cost trade off
    – BMW C1
    Blue Ocean strategy & Value curve

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