Blue Ocean Strategy Essay Example | Topics and Well Written Essays - 1000 words

Blue Ocean dodge - Essay ExampleUnlike red oceans, begrimed oceans create demand from the red oceans by breaking the boundaries of competition (Kim and Maubourgne, 2005). For instance, companies like music recording multinationals, management consulting and pharmaceuticals were hardly heard of in the last speed of light years. In this case, companies will have the opportunity to re-create others in order to reflect the emerging realities in economic growth and blue oceans. The authors assert that technological advancements, increased deregulation of marketplaces and improved industrial productivity will enhance initiation of blue oceans. Saturation of the break offed markets has resulted in to price wars and shrunk profit margins thence the need of a blue ocean strategy (Niciejewska and Dimitrov, 2009). Surprisingly, the authors point out that 86 part of the surveyed companies expect to be comfortable in red oceans since they have only line extensions while only 14 part ar e committed at creating new markets. It is interesting that the survey found out that 14 percent of the firms that invested in new market development delivered 38 percent of the revenues and impressive 61 percent of total profits. On the contrary, the 86 percent of firms concentrated on line extensions thus delivering 62 percent of the total revenues and only 39 percent of the total profits (Kim and Mauborgene 4). ... The authors provide an example of Japanese companies of eighties due to decline of Western companies in droves. The authors agree that competition is important, but companies must attain competitive-advantage and develop markets with minimal or no competition (Warren, 2008). The authors go ahead to provide the logic behind the creation of blue oceans. The article outlines that new technology and innovation will create blue oceans. Some of the blue oceans that have been created by new technology include Ford Model IT and Apple Personal computers. Incumbents to a fault c reate blue oceans within the existing business like AMC multiplex of 1995 and Palace theaters of 1914. The authors assert that strategical moves define blue oceans and no the size of the industry or companies. Accordingly, blue oceans build existing brands through with(predicate) creating brand equity just like Fords Model T that still benefits the alliance today (Kourdi, 2009). The article differentiates the red oceans from blue oceans since Red Ocean strategies compete in the current market space while blue oceans create new uncontested markets. Red oceans aim at thrashing competition while blue oceans desire to make completion irrelevant. In addition, blue oceans break the order to cost trade off unlike red oceans that make the value to cost trade-off (Koontz and Weihrich, 1990). The authors propose a deep explanation of blue ocean strategy by asserting that such companies wane the fundamental strategies of competition that aim at creating more value for customers or lower ing operating costs. The authors crevice an example of Cirque du Soleil since at the time of market entry Circuses were benchmarking without raising market revenues. Cirque did not follow the