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What is the Blue Ocean Strategy in business and how does it differ from other strategies used by companies? What does it mean to create "uncontested market space by creating blue oceans?"

W. Chan Kim and Renee Mauborgne came up with the Blue Ocean Strategy. #business #marketing #strategy #public-relations #qualitative-research

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Eric’s Answer

I'd agree more with Alicia's example. A blue ocean can be created in a legacy market by competing on different concepts. One of the examples called out in the book is Southwest Airlines. They created a blue ocean for themselves by delivering radically differently on various components of their product. For example, legacy airlines strived to compete on the quality of their lounges, meals, seating choices, and hub access. Southwest on the other hand decided to intentionally underperform in these areas and intentionally overperform in low prices, frequent departures, friendly services, ticket flexibility, etc.
This graph shows the blue ocean they created based on their choices. Note they compete in a very legacy industry but don't compete "in the middle" of the value components.
https://visionroom.com/wp-content/uploads/2012/12/Strategy-Canvas-Southwest.png

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Abgour’s Answer

Hi Liana,
The Blue Ocean is a new term that Chan Kim and Renee Mauborgne came up with to describe an ever-existing phenomenon that is of creating “uncontested market space” out of existing ones. See, today’s industry is so crowded that you have a bloody red ocean of competitors competing over a tapering profit pool, which makes it unlikely to create profitable growth in the future. Red oceans define all today’s existing and invaded industries whereas blue oceans represent all the industries that do not exist yet. Confusing? Not really! The key is the innovation value. Therefore, instead of exploiting existing demand, you unleash and capture a new demand and create the innovation value rather than the added value. Hence, you create uncontested market space by creating blue oceans, commonly known as new opportunities. That is not new; this concept has always existed, if you look back to industries of the 20th century and today’s industries, you will realize that many have emerged since then, such as the automotive and IT industries.
Back to how it differs from other strategies commonly used by companies. It’s simple, the Blue Ocean Strategy tends to replace the competitive advantage that most companies seek, with value innovation as its main goal.
I suggest you read this report; it will help you understand each strategy and its benefits. http://ondernemerschap.panteia.nl/pdf-ez/h200801.pdf

Thank you comment icon Hi Abgour! THANK YOU for your answer! Appreciate it. So I should innovate then... I will take a look at the link!! Liana
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Alicia’s Answer

I agree with what Abgour said and would just add that I think a lot of people refer to this also as "disruption." If you are truly disruptive to an industry, you create a space for yourself where no one can touch/compete with you. When you're thinking about a strategy, as a company, you want to be able to choose the best place in the industry to compete. A good example is Amazon - they created a new space within the retail industry that no one else had really done, by being different in ways that are important to customers.

Thank you comment icon Hi Alicia. Thanks for your answer!! Much appreciated it!!! I'll take your advice. Liana
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Katie’s Answer

Hi, I would recommend reading a book called " Blue Ocean strategy". Think Cirque du soleil, they were the first company to transition away from using animals and using street performers instead.
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