Blue Ocean Case Study

The above figure represents the percentage of three elements that effect both Red and Blue Ocean strategies. These elements are business lunches in the new market and existing industry, the revenue impact and how this revenue generated in each ocean; last element is the profit generation. In addition, it seems that the profit gained from the blue ocean which is (61%) is greater than (39%) for the red ocean. However, there are many industry prefer to establish industry using red ocean (86%) as it mention in the above figure. The reason behind this is that many companies are more likely to compete within a steady market especially when the industry is successful instead of taking risks; because they believe that the success rate will be low when they enter new and none exist industry. Hence, risks such as the strategic risks are more likely to be costly and it needs a lot of time and effort to start up business, as they cannot promise that they will get profit and return. Nevertheless, in term of Blue Ocean it is also facing risk of innovation this happen when a competitor enters the market or when there is changes in demand, this well lead to the risk of not being …show more content…
By referring to W.Chan Kim and Renee Mauborgne (2004) Blue Ocean demonstrates an overview of the creation of this strategy in three industry types that are directly touch people’s live. This industry includes automobiles, computers and Movie Theater. There are some elements when you saw you will know that the company used Blue ocean strategy such as:
1. Blue ocean is Not about technology innovation:
Blue Ocean could be developing based on the demand and customer value not by technology innovation. Cirque Du Soleil is an example for that as it is provide customers with ballet, theatre and circus shows that satisfied their need which is entertainments.
2. Incumbents often create blue