The Blue Ocean Strategy

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1. Why it is so interesting the Blue Ocean Strategy? With the current technological stage, productivity is at high levels, the supply exceeds the demand and the prices are falling. The globalization adds a component that facilitates new entrants and low production cost, and to make it worst, the rich countries (with more consuming power/demand) have their population decreasing. So, the creation of new markets with focus on non-customers to create demand using blue ocean strategy will be an interesting approach, besides other aspects and methodologies. One key point of Blue Ocean Strategy is how to create value and how to make customer comfortable and willing to pay for it. Innovation has a key role on this matter, but not only. It must …show more content…

The last factors couple with a high level of offering, (above graphic), where we have only the blue value curve, are a good value curve for blue ocean strategy. 3.2. The Four Action Framework To create a new value curve and break the trade-off between differentiation and low cost, four questions shell be answered. 3.2.1. Which of the factors that industry takes for granted should be eliminated? Objective: • Eliminate factors that have long competed on. • Move the focus from benchmarking competitors. • Find out if it had a change in what buyers value. 3.2.2. Which factors should be reduced well bellow the industry’s standard? Objective: • Determine if products are overdesigned. • Find out, if it has occurred increase in cost structure for no gain. 3.2.3. Which factors should be raised well above the industry’s standard? Objective: • Eliminate the compromise that customers have with the industry. 3.2.4. Which factors should be created that industry has never offered? …show more content…

Three Characteristics of a Good Strategy A good strategy should have focus demonstrated on a clear company’s strategic profile and value curve. Also, must diverge from competition. And, it should have a compelling tagline. 3.4.1. Focus Every strategy must have a focus and the organization profile and/or the value curve must clearly show it. 3.4.2. Divergence When the strategy is reactive to keep up with competition, it loses its uniqueness. Applying the four actions, the organizations differentiate their profiles and the value curve will stand apart from competitors. 3.4.3. Compelling Tagline A good tagline delivers a clear message and advertises an offering truthfully. 4. Reconstructing Market Boundaries, the First Principle To move from red oceans, companies must not accept boundaries that define how they compete. They must look across: • Alternative industries; • Strategic groups within industries; • The chain of buyers; • Complementary product and services; • Functional and emotional appeal, and look across time. This will give some insights to reconstruct market and to open up blue

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