Blue Ocean Strategy Essay

6788 Words Apr 10th, 2012 28 Pages
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Competing in overcrowded industries is no way to sustain high performance. The real opportunity is to create blue oceans of uncontested market space.

Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne

Included with this full-text Harvard Business Review article: 70 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 71 Blue Ocean Strategy 80 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications

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Blue Ocean Strategy

The Idea in Brief
The best way to drive profitable growth? Stop competing in overcrowded industries. In those red oceans, companies try to outperform rivals to
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Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne

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A onetime accordion player, stilt walker, and fire-eater, Guy Laliberté is now CEO of one of Canada’s largest cultural exports, Cirque du Soleil. Founded in 1984 by a group of street performers, Cirque has staged dozens of productions seen by some 40 million people in 90 cities around the world. In 20 years, Cirque has achieved revenues that Ringling Bros. and Barnum & Bailey—the world’s leading circus—took more than a century to attain. Cirque’s rapid growth occurred in an unlikely setting. The circus business was (and still is) in long-term decline. Alternative forms of entertainment—sporting events, TV, and video games—were casting a growing shadow. Children, the mainstay of the circus audience, preferred PlayStations to circus acts. There was also rising sentiment, fueled by animal rights groups, against the use of animals, traditionally an integral part of the circus. On the supply side, the star performers that Ringling and the other circuses relied on to draw in the crowds could often name their own terms. As a result, the industry was hit by steadily decreas-

ing audiences and increasing costs. What’s more, any new entrant to this business would be competing against a formidable incumbent that for most of the last century had set the industry standard. How did

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