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For android instal Blue Ocean Strategy10/15/2023 “What Chan and Renée did was less about how to compete, and more about how to create,” Oh Young ( pictured) explains. Profits and growth can atrophy as companies try to outperform their rivals by grabbing a larger share of an existing market. A red ocean can put the future of your business at risk if you fail to compete. “But a problem arises when competition becomes intense, because the profit margin shrinks, and you go into a price war against your competitors.”Ī hotly contested market is what Chan and Renée call a red ocean. “You learn industry structure, how to analyze, compete head on, and grab more than your competitors. “In business school, what you learn in the strategy 101 course is on how to compete with competitors and increase your market share,” she says. Oh Young Koo, executive institute fellow at INSEAD’s Blue Ocean Strategy Institute, explains that blue ocean theory goes beyond what is traditionally taught as strategy in the core MBA syllabus. It’s essentially about ‘creating and capturing uncontested market space, thereby making the competition irrelevant.’ The blue ocean strategy encourages you to innovate and develop new, affordable products that make competition irrelevant. A blue ocean is an unknown market space untainted by competition it revolves around value innovation. If you’ve come across any of these, you’ve come across blue ocean strategy.Īccording to Chan and Renée ( pictured), blue ocean strategy is when a company simultaneously pursues differentiation and low cost to open a new market space and create new demand. Think of Netflix, Cirque du Soleil, and even classical music superstar Andre Rieu. The term blue ocean strategy was coined in 2005 by INSEAD professors Chan Kim and Renée Mauborgne, in their co-authored book, Blue Ocean Strategy.Įven if you haven’t come across the term, or don’t know what it means, you’ll have likely come across a company that’s adopted a blue ocean strategy or a blue ocean shift.
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