Blue ocean strategy versus porter s generic strategies

We were surprised to find evidence that blue-ocean strategy is sustainable. When reaching out to new industries these competencies may not suffice, implying a great amount of risk for failure since others might be much better equipped.

blue ocean innovation

The blue and red ocean metaphor is a powerful one: we can easily visualize a bloody red ocean with aggressive sharks eating you alive. If that attracted consumers over the long term, industry profits and the number of vendors would both steadily increase—and you could conclude that companies succeed by staking out new markets.

Instead, we are supposed to focus more on creating customer value - a trend that we also find back in the enormous uptake of the notion of a 'business model' in which competitive analysis has been replaced by customer development, empathic design thinking and value proposition design.

The newness of Blue Ocean Strategy lies in the tools it provides for facilitating companies actually delivering a unique mix of value. This may help them avoid quite a few naivety mistakes.

Either way in that scenario, companies focused on competition would outperform those setting their sights on blue oceans.

blue ocean companies

With the Strategy Canvas you map out on which value dimensions the current industry is competing price, features, design, durability, etc. In this way, organizations inadvertently become either premium competitors or differentiated niche players in existing industry space rather than creating value innovation that makes the competition irrelevant.

Both approaches to strategy have their devotees, but to the best of our knowledge, no one before now has conducted an empirical study comparing the two camps.

Blue ocean strategy versus porter s generic strategies

Blue ocean strategy is about pursuing both differentiation and low cost. With over 3.

Instead, we are supposed to focus more on creating customer value - a trend that we also find back in the enormous uptake of the notion of a 'business model' in which competitive analysis has been replaced by customer development, empathic design thinking and value proposition design. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. For instance, by slowing down profit erosion with an effective competitive strategy for an existing market, they can increase the funds available for blue-ocean investments and thus their chances of finding an untapped market with plenty of consumers. Under traditional competitive strategy differentiation is achieved by providing premium value at a higher cost to the company and at a higher price for customers. For our research framework, we used a model that dates back to a seminal economics paper by Harold Hotelling. Blue Ocean Global Network How is blue ocean strategy distinct from differentiation strategy? With the Strategy Canvas you map out on which value dimensions the current industry is competing price, features, design, durability, etc. So we did. This suggests that strategy texts before Blue Ocean Strategy were predominantly fostering competition in existing markets, in red oceans. Our research shows that competition eventually erodes the profits from innovation. Rather, it tells them to be creative and find ways to avoid and limit competition as much as possible; to go to industries where the five forces are least powerful — a message not that different from Blue Ocean Strategy. Furthermore, his generic strategies made companies aware that strategy making implies making some fundamental choices. Blue ocean strategy is about pursuing both differentiation and low cost. Not entirely. If that attracted consumers over the long term, industry profits and the number of vendors would both steadily increase—and you could conclude that companies succeed by staking out new markets.
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Should Strategy Shift to Blue Oceans?