It is a dangerous bad book because it takes some thinking to figure out why it is bad, despite its success, and despite the fact that its key metaphor of blue ocean vs. The blue ocean strategy seems to be a perfect solution for present companies to become sustainable successful. Professor joe tidd identifies the weaknesses of the traditional five forces approach to strategy, and the advantages of adopting a blue ocean strategy. In the integrated approach to strategy at the system level, blue ocean strategy requires organization to develop and align the three strategy proposition. It is used to plot how the current competitors compete in a market space, what factors they compete on and how your company and the competition scores on each key factor. In their bestselling book, blue ocean strategy, authors w. They assert that these strategic moves create a leap in value for the company, its buyers, and its employees while unlocking new demand and making the competition irrelevant.
Factors such as competitive rivalry, new entrants, buyer power, supplier power, and threat of substitution are factors which when conquered. Blue ocean strategy formulation the strategy canvas. Blue ocean holds its ownuntil competition erodes profits from innovation, after 15 or so years. Pdf harvard business school press blue ocean strategy. Value innovation strategy competes in an uncontested market space. Of course, the blue ocean approach to this model would call. This metaphor can be powerful enough to stimulate people to action. It draws upon industrial organization io economics to derive five forces that determine the competitive intensity and therefore attractiveness of amarket. This model emphasizes that in any existing industry, there are five competition forces. The premise of the book is that companies can succeed by creating. Apr 27, 2012 if blue ocean strategy dominates in the shortterm while porters five forces dominates in the longterm such that profits are positively related to the number of firms in the shortterm but negatively related in the longterm, that would imply that innovation by new firms generates shortterm competitive advantage with associated higher. Porter s five forces model versus a blue ocean strategy essay.
Chan kim and renee mauborgne 2006 blue ocean strategy has been described as a must read for all business students. How to create uncontested market space and make the competition irrelevant. All the data that i collected are from relevant sources that can be verified which strengthen the validity of my thesis. Porter s five forces model versus a blue ocean strategy. In an audiobook that challenges everything you thought you knew, w. Blue ocean pedagogical materials, used in over 2,800 universities and in almost every country in the world, go beyond the standard casebased method. Blue ocean strategy proposes that businesses can have more success by creating a blue ocean, rather than trying to compete in the red ocean the traditional market. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible.
Chan kim and renee mauborgne, published by harvard business school press, boston, massachusetts, 2005, isbn 97815996192 blue ocean strategy is a business strategy book, first published on february 3, 2005. Its frequent newbrand introductions and widespread use of differentiation strategies have led to increased market segmentation, deeper and broader markets, and. Reviewing the blue ocean strategy universiteit twente. Achieved via the delivery of features that have a highest marginal benefit to. Apr 27, 2012 the blue ocean red ocean analogy is a powerful and memorable metaphor, which is responsible for its popularity. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades.
She is also codirector of the insead blue ocean strategy institute. To refer to the hr analogy, it is like herzbergs hygiene motivation theory which recommends building motivation factors in a job or mc gregors x and y. Chan kim and renee mauborgne, professors at insead. Blue ocean strategies summary blue ocean strategies a.
Chan kim and renee mauborgne, professors at insead and codirectors of the insead blue ocean strategy institute. However, the concepts behind the blue ocean strategy such as the competing factors, the consumer cycle, noncustomers, etc. It takesoff from the five forces model as the launchpad. Oct 26, 2010 the blue ocean strategy on the other hand is purely a strategy. Michael porters five forces strategy your full full may 11, blue ocean strategy vs. The fundamental premise is that most companies fight competitors headtohead in the same space, chasing the same customers with very similar products, creating a bloodyred ocean in their feeding frenzy. Blue ocean strategy proposes that businesses can have more success by creating a blue ocean, rather than trying to compete in the red ocean. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Kim and mauborgne 2005a contest the dominant position that competition. How to create uncontested market space and make the competition irrelevant by w. The book the origin of the terms red and blue oceans comes from blue ocean strategy how to create uncontested market space and make the competition irrelevant. The strategy canvas outlined in the book is basically a tool to visually show how a company will or has created a blue ocean strategy. Blue ocean strategy displays an orderly way to deal with making the challenge unessential and traces standards and instruments any organization can use to make and catch their blue seas.
This blog article is a overview of some of the key points of the book by w. The authors conclude that the blueocean strategy or innovation approach is sustainable. This is the holy grail that marketers have been seeking since we began thinking about product differentiation, market segmentation, positioning, and all the. Of course, the blueocean approach to this model would call. May, 2015 its not better its just different porter five forces model is used to understand the dynamics of an industry while blue ocean is a specific strategy choice a company can pursue. Traditional competitive strategy vs blue ocean strategy. Blue ocean strategy is the title of a book published in 2005 and written by w.
What makes blue ocean strategy better than porters five. Now, i would like to emphasize the difference between porters five forces and blue ocean strategy for a deeper understanding of what it is all about. Blue ocean strategies a summary blue ocean strategy is a business strategy book first published in 2005 and. Blue ocean strategy generally refers to the creation by a company of a new, uncontested market space that makes competitors irrelevant and that creates new consumer value often while decreasing costs. How to create uncontested market space and make the competition irrelevant pdf by w. Blue ocean strategy summary click here to read this article. This framework addresses not only the analytic aspects behind the creation of blue ocean strategy but also the allimportant human aspects of how to bring an organization and its people on this journey with a willingness to execute these ideas in. Chan kim and renee mauborgne assert that tomorrows leading companies will succeed, not by battling their rivals for market share in the bloody red ocean of a shrinking profit pool, but by creating blue oceans of untapped new market spaces ripe for growth. Porters 5 forces vs blue ocean strategy how disruptive innovation transforms your relationship to the market. Michael porters five forces strategy before going to compare blue ocean strategy and porters five forces strategy, let us get a better understanding of what these strategies actually are. Professor joe tidd identifies the weaknesses of the traditional five forces approach to strategy, and the advantages of adopting a blue ocean. Blue ocean holds its ownuntil competition erodes profits from innovation, after. Porters five forces model versus a blue ocean strategy porters five forces model, provided by michael porter, is an external environmental analysis tool for a specific market.
Porters five forces model is an analytical framework for assessing business competitiveness strategies in a particular market. Innovation, new market space and creating demand are central characteristics. A new empirical study compares innovative and competitive strategies. Our multimedia cases and interactive exercises are designed to help you build a deeper understanding of key blue ocean strategy concepts, developed by worldrenowned professors chan kim and renee mauborgne. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best.
Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level. They represent businesses that may not be around today, or werent around until they came on to the scene. The blue ocean strategy book has been sold over 3,5 million times, was published in 43 languages and is a bestseller across five continents. Blue ocean strategy formulation the four principles of strategy formation click here to read this article. The relevance of porters five forces in todays innovative and. Apr 27, 2012 in the integrated approach to strategy at the system level, blue ocean strategy requires organization to develop and align the three strategy proposition. The blue ocean strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers. It is being published in a recordbreaking 44 languages and is a w. The porters five forces is focusing more on what makes an organization competitive in existing red markets and it is concerned with the microenvironmental factors affecting businesses within the same industry. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. By this way, a new business model named blue ocean strategy has been introduced by kim and mauborgne 2004a which rapidly gained worldwide publicity and acceptance. Its authors, insead professors w chan kim and renee mauborgne, continued their steady progress up the thinkers50 list, finishing second to christensen this year.
Are you a fiveforces disciple or a blueocean enthusiast. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit. This book should be interesting for corporate strategy decision influencers, including executives, strategy analysts, corporate entrepreneurs, business owners, and strategy consultants. Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. The idea in brief the best way to drive profitable growth. Renee mauborgne is the insead distinguished fellow and a professor of strategy at insead, one of the worlds top business schools. If blue ocean strategy dominates in the shortterm while porters five forces dominates in the longterm such that profits are positively related to the number of firms in the shortterm but negatively related in the longterm, that would imply that innovation by new firms generates shortterm competitive advantage with associated higher. Blue ocean vs five forces the case centre, for educators. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. Value innovation value innovation is created in the region where a companys actions favorably affect both its cost structure and its value proposition to buyers. A good strategist would use five forces to understand the indust.
That is why i used books, thesis, surveys, organizational records and data collected through. Blue ocean strategy is a book published in 2005 and written by w. In contrast, blue ocean strategy originated from a study that took place over 10 years and analyzed company successes and failures in more than 30 industries. Listen to these blue ocean donors very carefully with engaging, accepting respect 4. A lot has been written about it and i would have said practically everything had been said about it until i looked up the book on amazon to see the current price. The blue ocean strategy bos is the strategic organizational approach that is based on the principle that companies should not engage in a. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to.
What is blue ocean strategy about blue ocean strategy. Some strategic planning models are based on theories that dont quite pan out during gotomarket executions. Blue ocean strategy including examples and pdf download. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w. The elimination reduction improvement creation net 4. Porters five forces framework rivalry existing competitors, threat of new entrants, power of. Blue ocean strategy, five forces, competitive strategy, innovation. The risks of following a blue ocean strategy the adaptive. How to create uncontested market space and make the competition irrelevant from the worlds largest community of rea. This article explains the blue ocean strategy, developed by w.
Porters five forces analysis is a framework for industry analysis and business strategy development formed by michael e. Authors deal with the phenomenon of blue ocean, a market space occupied by few companies where. And fish for a blue ocean cluster of neighbors to serve and a red ocean strategy 1. Pdf blue ocean strategy download full pdf book download. Click here to download the blue ocean strategy summary pdf. Its not better its just different porter five forces model is used to understand the dynamics of an industry while blue ocean is a specific strategy choice a company can pursue. Chan kim and renee mauborgne in their bestselling book of the same name. View notes blue ocean strategies summary from mgmt 430 at university of washington. Blue ocean strategy is a theory explained in a 2005 book by w. Blue ocean strategy, the global phenomenon that has sold over 4 million copies and is recognized as one of the most iconic and impactful strategy books ever written, argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Blue ocean strategies a summary blue ocean strategy is. Apr 26, 2012 now, i would like to emphasize the difference between porters five forces and blue ocean strategy for a deeper understanding of what it is all about.
After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. Porters five forces model and blue ocean strategy kim. The blue ocean strategy on the other hand is purely a strategy. In the past decades, some popular strategic frameworks for the creation of new business models have been developed. Blue ocean strategy is based on scientific research and a course at insead. How to create uncontested market space and make competition irrelevant, is a market space that is undeveloped, and untapped by competitors. Aug 25, 2016 professor joe tidd identifies the weaknesses of the traditional five forces approach to strategy, and the advantages of adopting a blue ocean strategy. Porters five forces model versus a blue ocean strategy porters five forces model, provided by michael porter, is an external environmental analysis tool for a specific market this model emphasizes that in any existing industry, there are five competition forces. His book blue ocean strategy, coauthored with renee mauborgne, has sold 3. Furthermore the blue ocean strategy was awarded with. Chan kim is the codirector of the insead blue ocean strategy institute and a chair professor of. Blue ocean strategy is a bad book, but it is not your usual bad book.
1133 1016 1022 1027 386 422 91 1256 1002 1001 531 875 780 1081 131 1156 761 1395 448 80 1417 938 404 973 1367 508 431 1087 671 494 1096 211