Blue Ocean Strategy

Abdel Salam H. Busalim – MC122009Abdelrahamn M. Ibrahim – MC112078

Mozhdeh Vahid - MC122055Mojtaba Zare - 20123M10085

Komeil Raisian Mat - MC 112157

Dr.Ab Razak Che Hussin

Definitions:

Blue Ocean Strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers and create new demand in new market space

Red oceans mean, all the industries in existence today the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.

Blue Ocean and Red Ocean

Blue Ocean Red Ocean

Create uncontested market space.

Compete in existing market space

Make the competition irrelevant. Beat the competition.

Create and capture new demand

Exploit existing demand.

Align the whole system of a company’s activities in pursuit of differentiation and low cost.

Align the whole system of a company’s activities with its

strategic

Break the value/cost trade-off. Make the value/cost trade-off.

The cornerstone of blue ocean strategy

Action framework

• Which of the factors that the industry takes for granted should

be eliminated?

• Which factors should be reduced well below the industry’s standard?

• Which factors should be raised well above the industry’s standard?

• Which factors should be created that the industry has never offered?

Principles of formulating BOS

Reconstruct Market Boundaries :

path One : Look across alternative industries

Path Two: Look across strategic groups within industries

Path Three: Look across the chin of buyers

Path Four : Look across Complementary products and services offering.

Path Five : Look across functional or emotional appeal to buyers .

Path Six : Look across Time

Focus on the big picture not the numbers

Reach beyond existing demand

Get strategic sequence right

Overcome key organizational hurdles

Build execution into strategy

Successful Case study

Successful Case study

Other circuses focused on:

Benchmarking the competition

High-profile “stars”, which increased costs but who were largely unknown to the general public

Traditional venue

Traditional audiences

• Cirque du Soleil focused on:

Creation of a hybrid between the circus and the theatre

Retention of the symbolic and glamorous aspects of circus, such as the tent and the more breathtaking aspects, such as acrobats.

Incorporation of more comfort, sophistication, elegance and theatrical plots; this brought not only the richness of theatre but a whole new demographic of customers

It looked across market boundaries and created new ones.

Successful Case study

Advantages of BOS

The current market space gets increasingly crowded, profit and growth prospects shrink, BOS opens prospects for new market space .

Create new and capture demands from the new market space.

Drive profitable growth.

The competition in blue oceans strategy is irrelevant.

limitations of BOS

The value innovation does not make sense to company's conventional logic.

Blue ocean strategy may conflict with other company's brand image.

Natural monopoly; the market often cannot support a second payer.

Network externalities discourage imitation, because imitation often required changes in the existing business practices .