Blue Ocean Strategy , Blue Ocean Move Vs Red Ocean Strategy

Blue Ocean Strategy

The market space that is characterized by the blue ocean strategy is a market denoted by all the industries that are not in existence today, that is, the unknown market space, the portion untainted by competition. In the blue oceans, demand is just created rather than being fought for.According to Siegemund (2008) and Cleff & Rennings (2011), the market is having ample opportunity for growth which is rapid and profitable. Creation of blue oceans can be done from two perspectives. For the few of the cases, businesses give rise to completely new industries. But for the most cases, the creation of a blue ocean is from within the red oceans where a business changes the boundaries of the existing industry. In ensuring breaking through on the boundary by traditionally separating the theater and the circus, there is a profitable and new blue ocean from within the red ocean of the circus industry.

The creation of a blue ocean is the creation of an industry that hasn’t existed yet. Throughthe combination of new and old technology, one can create new innovative products that can define what a new industry encompasses (Niciejewska & Dimitrov, 2009). Furthermore the combination of the new and the old methods of services, one can create an industry which hasn’t existed before. The creation of new industries for the unlimited potential and generation of profit is the fundamentalaspect of the blue ocean strategy.

Importance of Blue Ocean Strategy

The presently advancing technological stage, results to high levels of productivity, and supply exceeding the forces of demand. This make prices fall, with globalization adding a component that facilitates new entrants and low costs of production, and the rich nations with high consumption power/ demand experience population decrease. Therefore in order to create new markets and initiate focus on non-consumers to create the demand, blue ocean strategy is a vital approach.As argued by Kim& Mauborgne (2015), the key point of the blue ocean strategy is concerned with how to ensure to create for the service or product and therefore making customers comfortable and are willing to pay for them.

A Blue Ocean Move Product.

TATA Motors.

The recent move of the company on the product India’s “Nano Car” being the ‘World’s Cheapest Car’ made them adopt a combination of low cost and differentiation as stipulated in Blue Ocean Strategy. This has been the outcome of the combination of “Value Innovation” and strategizing to play a different game.

The product’s Red Ocean move

Considering the world of business to be consisting of the two distinct types of space, thought of as red and blue oceans. The red oceans is the representation of all the industries existing today, that is, the known market place. Within the strategy of the red oceans, the industry boundaries are explicitly defined and accepted, and also the competitive rules of the game are clearly understood by every player within the industry. Within the red ocean strategy, businesses try to outperform their rivals with motive to grab a bigger share of the existing demand (Moller et al., 2005). As the market space gets driven to be more and more crowded, there is reduction in the prospects of growth and profits. The products then turn into commodities, and the increased competition turns the water bloody.

Merit of red ocean strategy

  1. The red ocean is easier to enter because the industry is already defined.

Demerits of red ocean strategy

  1. Though entry into Red Ocean is considerably easier but surviving in it is quite hard.
  2. In Red Ocean there is existence of stiff competition which is heavily contested.
  3. It is further characterized with thin profits and growth opportunities.
  4. The red ocean strategy basically offers a zero sum game in which only the strongest forge ways to survive (Mauborgne, et al., 2008).
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