Blue Ocean Strategies

Summary

Chapter 1: Creating Blue Ocean

Companies what only thought of being in the red oceans are now willing to have themselves in
blue oceans. As red oceans included/ represented all the industries, which are in the market space
basically and that involved competition and rules of the games are known and as we find
similarities the red ocean starts getting bloody, where profits and growth starts getting reduced.
But in contrast the blue ocean provides the untapped market space where there are opportunities
of growth.

We must also value red ocean as the basic way towards reaching into the blue ocean is the red
ocean as when companies operates/ starts functioning it to have to go through the red ocean in
order to know the rules of the games and then find their own blue ocean. It is essential to focus
on the red ocean, so that to know the key constraining factors of the business/ market to pave a
way for the uncontested blue ocean. By creating Blue Ocean you make people think like to have
the product which was once preferred by the masses such as tide and even now people won’t
look for it as there is a trend that reveals that brands are now becoming similar and people now
do select brands the basis of price.

So to view and understand Blue Ocean we must discuss the strategic moves of the companies
these strategic moves are defined as a set of managerial actions and decisions involved in making
a new market space. By the use of the strategic moves one can reconstruct and take these
companies out of the red ocean and develop a pattern by which blue ocean is created and high
performance is achieved. Those who created Blue Ocean focused on the value innovation; value
innovation makes the competition irrelevant by creating a leap in value for buyers and your
companies which creates an uncontested market space. Value innovation can be valued when
companies align innovation with utility, price and cost positions. To better understand one
should follow the footsteps of cirque du soleil in order to create Blue Ocean. They made the
concept of circus looked more diverse by introduction of different acts which were never part of

Mirza M Abdullah Nadeem

SM
the circus industry and at a low cost here we see that they implied both differentiation and low
cost strategy.

Lastly to converge from red ocean to blue ocean, you should give emphasizes to the six
principles which leads towards formulating and execution of blue ocean. These strategies/
principles are: (1) Reconstruct market boundaries (2) Focus on the big picture, not the numbers
(3) Reach beyond existing demand (4) Get the strategic sequence right (5) Overcome key
Organizational hurdles (6) Build execution into strategy.

Mirza M Abdullah Nadeem

SM