Blue Ocean Strategy- a new marketing mantras


By

Sumanta Dutta
Faculty Member
ICFAI National College
Garia, Kolkata
 



Today the world of competition is just like a fireball. Tremendous growth opportunity are creating a hurdle some task to stay in the market and to generate profit.Hence, sustainability along with the profitable growth is the new mantra of new Indian industry. Battled over market share, reap the benefit in the absence any other competitors for the seek of competitive advantages is become a hurdle some job.

W.Chan. Kim  and Renee Mauborgne, both professors of INSEAD, contend that-tomorrow leading companies will succeed not by battling competitors but by creating "Blue oceans" of uncontested market space ripe for growth. Such strategy linked with "value innovation" as suggest by Kim and Mauborgne before 2005.

Why Ocean?

Generally "Ocean" refers to the market or Industry. Blue Ocean is untapped and uncontested markets which provide little or no competition for any one who would drive in. since the markets are not crowded. A red ocean on the other hand, refers to a saturated market where there is fierce competition, already crowded with companies providing same type of services or producing the same kinds of goods. According to W.Chan. Kim and Renee Mauborgne –"Blue Ocean Strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers."

Characteristics Red Ocean Strategy:

1) In red oceans industry boundaries are well defined and accepted.
2) The competi5tive rules of games are prevailing.
3) Companies try to outperform their rivals to grab a greater market share of existing demand
4) Prospects for growth and profits are reduced due to overcrowded in the market place
5) Products are considered to be commodities
6) Too much cut throat competition turns the red ocean bloody.

Characteristics Blue Ocean Strategy:

1) It is an undefined and untrapped market space.
2) Creation of new demand within the untrapped market can not be overlooked.
3) There is an opportunity for highly profitable growth.
4) Such markets are occasionally created well beyond existing industry boundaries
5) Competition is irrelevant because the rules of the game are waiting to be set
6) It is n wider ,deeper potential of  market space that is not yet explored
7) Long term value creation is possible.

Red Ocean Strategy

Blue Ocean Strategy

1) Compete in existing market place

1) Create uncontested market space

2) Beat the competition

2) Make the competition irrelevant

3) Exploit existing demand

3) create and capture new demand

4) Make the value cost trade off

4) Break the value cost Trade off.

5) Align the whole system of a firm's Activities with its strategic choice of Differentiation or low cost.

5) Align the whole system of a firm's Activities in pursuit of choice of Differentiation & low cost.


However, strategy applicable in a particular socio –economic condition depends upon the market scenario. But the bloody battle within the industry can be strategically used by the firm in order to create untapped market space that makes the competition irrelevant.
 


Sumanta Dutta
Faculty Member
ICFAI National College
Garia, Kolkata
 

Source: E-mail April 17, 2007

       

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