Question

Summarize the article “Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant, 1. Creating Blue Oceans” in 18 sentences with your own words.

Answer 1

Blue Ocean strategy consists of opinion of the author regarding the perfect strategy for creation of unconventional success by adoption of unconventional approaches to business with emulation of strategy utilised by military organisations. The existing Global markets adopted by metaphoric use of Red and Blue Ocean with red Ocean representing all the existing industries, indicating the market space which is in use and already identified having a clear physical presence, with all rules and nuances already identified and adequately exploited by competitors for availing greater market share. With increase in competition the market space get extremely crowded restricting potential for profitability and growth. This results in creation of niche products and commodities with competition becoming extremely cut throat and turning the normally Blue Ocean into red with the bloodshed from the skirmishes between the competitors. Blue oceans indicate all the industries which are not yet in existence and denotes the unknown unexplored marketplace main competition has not been initiated with demanding created due to identification of service gap. it is the area where innovation results in meeting earlier undefined requirements providing high profitability with large opportunity for growth and Rapid expansion of customer base with competition being irrelevant as the rules for this marketplace have not been established. The term Blue Ocean is an analogy describing the greater opportunity available within the wider unexplored marketspace with great potential to be exploited.

The author advocates approaches based upon application of mind with questioning of existing strategies tools and policies rather than simply adopting what is available, resizing and creation of a unique strategy personal analysis of what define profitability in growth for the company or industry. True signification of profitable growth is the strategy that helps achieve that growth with sustainable high level performance and competitive advantage. Value innovation advantage obtained by following a dual strategy implementing both differentiation and low cost along with utilisation of key methodologies present with them available tools for adequate analysis building the framework a successful strategy and the clear specification of the four actions framework. Value innovation results in creation of value for all involved stakeholders the buyer, the company and its employees leading to opening up of New unexplored Market space. Value innovation consists of obtaining sustainable competitive advantage not by competing effectively but by rendering the competition irrelevant through the strategy of changing the rules of the game or the playing field itself. The strategy which achieve business needs to necessarily raise the value by creating greater value for the market why simultaneously achieving reduction within features of services that may have lower perceived value for the present or future markets. Nelson achieving greater value at lower cost and help break the value cost trade off by using the four actions framework.
The four actions framework consists of raising, eliminating, reducing and creating. Raising identify the factors which need to be granted greater importance within an industry in terms of product pricing or service standard. Elimination identifies areas within a company or industry which could be completely eliminated for achieving cost optimisation leading to creation of an entirely new market. Reducing identifies products or services which are not essential but have significant value within the industry. Reduction within these area without elimination can help reduce cost. Creation is what encourages companies to practice innovation within the products for creating new markets without competition through differentiation of markets from competition.
This Framework can help an organisation formulate the Blue Ocean strategy to create Blue Ocean by identifying opportunities within unexplored areas by looking across the six conventional boundaries of competition the presented by the six paths framework. Organisations need to reduce the inherent risk for failure within planning and strategy buy visualising strategy and ensuring creation of new demand buy exploring potential non customers who exist within the Blue Ocean and launching of a commercial viable blueocean Idea by introduction of an offering which has exceptional perceived value achieved with adoption of duel strategy of pricing and differentiation and accurate target costing which helps overcome all obstacles for successful adoption of the operate.