Title Essay

7107 Words Feb 20th, 2016 29 Pages

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:
1 Article Summary
The Idea in Brief—the core idea
The Idea in Practice—putting the idea to work
2 Blue Ocean Strategy
11 Further Reading
A list of related materials, with annotations to guide further exploration of the article’s ideas and applications

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This document is authorized for use only in Strategic Management 15/16 by Ian Mackenzie, Imperial College - London from December 2015 to June 2016.

Blue Ocean
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The logic behind blue ocean strategy is counterintuitive: • It’s not about technology innovation. Blue oceans seldom result from technological innovation. Often, the underlying technology already exists—and blue ocean creators link it to what buyers value. Compaq, for example, used existing technologies to create its ProSignia server, which gave buyers twice the file and print capability of the minicomputer at one-third the price.
• You don’t have to venture into distant waters to create blue oceans. Most blue oceans are created from within, not beyond, the red oceans of existing industries.
Incumbents often create blue oceans within their core businesses. Consider the megaplexes introduced by AMC—an established player in the movie-theater industry. Megaplexes provided moviegoers spectacular viewing experiences in stadium-size theater complexes at lower costs to theater owners.

To apply blue ocean strategic moves:
• Never use the competition as a benchmark. Instead, make the competition irrelevant by creating a leap in value for both yourself and your customers. Ford did this with the Model T. Ford could have tried besting the fashionable, customized cars that wealthy people bought for weekend jaunts in the countryside. Instead, it offered a car for everyday use that was far more affordable, durable, and easy to use and fix than rivals’ offerings.

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