Red Ocean Strategy Blue Ocean Strategy
Compete in existing market space Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value/cost
trade-off Break the value/cost trade-off
Align the whole system of a company's activities with its strategic choice of differentiation or low cost Align the whole system of a company's activities with its strategic choice of differentiation and low cost
Assumes Structuralist or Environmental determinism. Industry structural conditions are given and firms are forced to compete within them. Companies are at the mercy of economic forces greater than themselves Reconstructionist view.
Assumes market boundaries and industries can be reconstructed by actions and beliefs of industry players.
Creating a Blue Ocean of Innovation Part One:
Blue Ocean Strategy: Competing in overcrowded industries is no way to sustain high performance. The real opportunity is to create blue oceans of uncontested market space.
Step one: Find a Blue Ocean. A Blue Ocean can be created (1) by creating all
new industries (eBay) or (2) when a firm alters the boundaries of an
existing industry (Cirque du Soleil)
Step Two: Exploit and protect Blue Oceans
Value: offering something not offered before.
Value Pioneering: Cost savings are made from eliminating and reducing factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in, due to the high sales volumes that superior value generates.
Technological Pioneering is not a necessary ingredient in business str ...