The blue ocean strategy explains how to guide your business across seas with less competition and greater profitability. The book proposes rules and principles to be followed by entrepreneurs, managers, CEOs, and directors to help companies get out of the deadly waters of the red oceans. It is a beautiful metaphor indeed: Blue Oceans and Red Oceans. Blue Oceans means to prosper, peaceful, safe blue water. Two contrary elements which express good and evil. The book is intended for all businessmen from various Industries, those eager to learn new ways, techniques, methods, and strategies that are not only beneficial in the business world but also in other aspects of life.
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Executive Summary Reprint: RD 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. The Idea in Brief 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. 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. 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.
A version of this article appeared in the October issue of Harvard Business Review. See www. She is coauthor, along with W.
What if you could read 3 books per day?
Book layout and concepts[ edit ] The book is divided into three parts:  1. 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. The four actions framework aids in eliminating the trade-off between differentiation and low cost within a company. The four actions framework consists of the following: Raise: This questions which factors must be raised within an industry in terms of product, pricing or service standards. Eliminate: This questions which areas of a company or industry could be completely eliminated to reduce costs and to create an entirely new market. Therefore, it can be reduced without completely eliminating it. Create: This prompts companies to be innovative with their products.
Estrategia del océano azul
Summary of Red and Blue Ocean Strategy. Abstract W. According to Kim and Mauborgne, competing in overcrowded industries is no way to sustain high performance. The real opportunity is to create blue oceans of uncontested market space.