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Article
Publication date: 1 August 2005

W. Chan Kim and Renée Mauborgne

This paper reports the results of more than a decade‐long research journey on how firms can go beyond competing to creating uncontested market space, or “blue oceans,”

Abstract

Purpose

This paper reports the results of more than a decade‐long research journey on how firms can go beyond competing to creating uncontested market space, or “blue oceans,” that makes the competition irrelevant.

Design/methodology/approach

Studies over 150 blue‐ocean creations in over 30 industries spanning more than 100 years from 1880 to 2000. Analyzes not only winning business players that created blue oceans but also their less successful competitors. Searches for convergence among the strategic moves that created blue oceans and divergence between these moves and those of less successful players caught in the red ocean of bloody competition.

Findings

Finds clear strategic patterns that united the strategic moves that created blue oceans and separated these from the strategic moves that left companies battling for incremental market share in red oceans of overcrowded markets.

Practical implications

This paper addresses the following key questions: How can companies create blue oceans in an opportunity‐maximizing, risk‐minimizing way? What makes the creation of blue oceans increasingly imperative? Why has the field of strategy to date paid scant attention to how to reconstruct market boundaries to open up blue oceans of uncontested market space?

Originality/value

This paper makes strides in filling a central void in the field of strategy. For the past 25 years the field of strategy has focused principally on how to build competitive advantages to beat the competition within established market boundaries. While important, with supply exceeding demand in more and more industries this often leads to a red ocean of bloody competition. Instead of battling rivals, companies need to go beyond this. They need to create blue oceans of uncontested market space to prosper in the future. This article gives an insight into how firms can achieve this.

Details

Journal of Business Strategy, vol. 26 no. 4
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 2 September 2013

Svend Hollensen

The purpose with this article is to analyze the “Blue Ocean” phenomenon in depth. The goal is to better understand the underlying dynamic strategies in the form of

Abstract

Purpose

The purpose with this article is to analyze the “Blue Ocean” phenomenon in depth. The goal is to better understand the underlying dynamic strategies in the form of interactions between theory and management practices.

Design/methodology/approach

Single case study, Nintendo, which strategy is being confronted with the strategies of the two competitors, Sony and Microsoft. This is done in order to distinguish the value propositions of the three players in the game console industry

Findings

The main finding is that even if a company can create a Blue Ocean very fast with the right value proposition at the right time, it may be short-termed and may be transformed into a Red Ocean again within 1-2 years, unless the company's competitiveness is safe-guarded.

Practical implications

The results show, that Nintendo started out with a Red Ocean around 2005 with their GameCube. Then they turned it into a Blue Ocean with their introduction of “Wii” in November 2006. But Nintendo could not prevent Sony and Microsoft in turning it back to a Red Ocean, with their introduction of similar product features (motion controls), but at better quality. If Nintendo will be able to reestablish the Blue Ocean with their introduction of the “Wii U” in November 2012 is questionable.

Originality/value

There is constantly a need for reformulating the strategy through a dynamic and creative process, in order not to turn the Blue Ocean into a Red Ocean again.

Details

Journal of Business Strategy, vol. 34 no. 5
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 9 May 2018

Brian Leavy

This masterclass examines the blue ocean value innovation process, how it works in practice and how it has evolved since the publication of Blue Ocean Strategy (2005) by…

Abstract

Purpose

This masterclass examines the blue ocean value innovation process, how it works in practice and how it has evolved since the publication of Blue Ocean Strategy (2005) by W. Chan Kim and Renee Mauborgne as explored in their new book their new book Blue Ocean Shift (2017).

Design/methodology/approach

The main focus is the value innovation methodology that underlies blue ocean strategy.

Findings

Blue ocean strategy is a process of value innovation that uncovers new aggregations of demand by redefining the offering category.

Practical implications

Blue ocean strategy tends to focus on value innovation that uncovers new aggregations of demand by redefining the category while disruptive innovation tends to concentrate on new demand-creation that expands the current served market.

Originality/value

Blue ocean strategy sets out to reconfigure value propositions in compelling new ways that can deliver a quantum leap beyond the current red ocean value-cost frontier through raising buyer value and lowering company costs simultaneously. The emphasis on both value and innovation is essential to the creation of new “blue ocean” market spaces.

Details

Strategy & Leadership, vol. 46 no. 3
Type: Research Article
ISSN: 1087-8572

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Article
Publication date: 16 March 2015

Robert M. Randall

W. Chan Kim and Renée Mauborgne, professors of strategy at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute, introduced and defined the theory and…

Abstract

Purpose

W. Chan Kim and Renée Mauborgne, professors of strategy at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute, introduced and defined the theory and practice of blue ocean strategy – a unique methodology for creating commercially relevant new market space – in 2005. Despite the widespread interest in the concept, many managers still aren’t clear how blue ocean strategy differs from disruption theory, niche marketing, customer-focused innovation and other pioneering practices.

Design/methodology/approach

To better understand how to use blue ocean strategy methodologies and tools, the interviewer asked the researchers to explain some of the underpinning concepts.

Findings

Blue ocean strategy is about being first to get the customer offering right by linking innovation to value.

Practical implications

A blue ocean strategist gains insights about reconstructing market boundaries not by looking at existing customers, but by exploring noncustomers.

Originality/value

Managers will learn how to use blue ocean strategy to break the value-cost trade off, thereby opening up new market space.

Details

Strategy & Leadership, vol. 43 no. 2
Type: Research Article
ISSN: 1087-8572

Keywords

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Article
Publication date: 24 February 2012

Dennis Pitta and Elizabeth Pitta

Over the last several decades, product development efforts have seen unacceptably high new product failure rates. One important factor is the presence of competitors who…

Abstract

Purpose

Over the last several decades, product development efforts have seen unacceptably high new product failure rates. One important factor is the presence of competitors who can interfere with marketing strategy and force changes that sap resources and reduce success. As industries try to improve their success, line extensions, i.e. developing products similar but different to successful products, have become more common. Simultaneously, industries have reacted by refining the new product development (NPD) process to make it more reliable and accurate. The refined development techniques are so helpful in refining product benefits with which firms are familiar that they reinforce the pressure to extend the line. The result is overcrowded markets where destructive competition destroys profitability. A “blue ocean” strategy promises to change the destructive cycle of market crowding. Originally the framework focused on overall market strategy. However, it has a direct application to NPD. Revising the NPD process to incorporate a blue ocean viewpoint before the idea generation stage may reduce the failure rate and create breakthrough products that are not easily emulated. This paper aims to address this issue.

Design/methodology/approach

The paper reviews the NPD literature as well as work implementing a blue ocean strategy. It delineates the tools developed for applying blue ocean concepts to strategy. The paper then applies a blue ocean approach to the NPD process with the objective of developing new products and services that are unhindered by competitive offerings. Implementing a blue ocean strategy involves four main actions and may be focused on six targets. The paper integrates the elements into a strategic opportunity product development matrix which may help practitioners. Moreover, it identifies at which stage of the new product development process blue ocean concepts should be introduced.

Findings

The paper reveals that there are no unvarnished panaceas in product development. Applying a blue ocean strategy to avoid competition early in the product life cycle promises to reduce dangerous competition to allow the product to succeed. However, the gains will probably not extend indefinitely. It requires constant improvement and application of the concepts to gain a measure of sustainability. If firms are successful early, they may be able to defend gains in some areas to retain profitability, while seeking new blue oceans.

Practical implications

Blue ocean applied to marketing strategy has seen large gains in success. Integrating efforts to find uncluttered market space holds the promise of increased success. It will also refine the NPD process.

Originality/value

Blue ocean strategy has not been applied to the new product development process in the literature. The paper integrates the concepts of the strategy with the elements of product development. The result is a new approach toward success products and product introductions.

Details

Journal of Product & Brand Management, vol. 21 no. 1
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 10 February 2012

Emiel F.M. Wubben, Simon Düsseldorf and Maarten H. Batterink

The purpose of this paper is to discover an uncontested market space in the European fruit and vegetables industry (EFVI), and thereby assess the ex‐ante applicability of…

Abstract

Purpose

The purpose of this paper is to discover an uncontested market space in the European fruit and vegetables industry (EFVI), and thereby assess the ex‐ante applicability of the Blue Ocean Strategy of Kim and Mauborgne.

Design/methodology/approach

The search for an untapped market space made it necessary to first configure the logic of the Blue Ocean Strategy, which the authors coined the BOS‐framework. Next, the application to the EFVI required a two‐stage research strategy, namely desk research with six case studies, and a large survey.

Findings

The findings confirm that the Blue Ocean Strategy‐framework enables one to identify ex ante an untapped market space, characterized by the combination of sweeties' attributes with fresh fruit. The revolutionary untapped market space which the authors arrived at is “Youngfruit”, targeted at the new buyer group children and teenagers.

Originality/value

The research provides important insights in future key success factors to set oneself apart from competitors and change the rules of the game in the very competitive EFVI. Furthermore, this paper is (one of) the first to assess empirically the qualities and limitations of the Blue Ocean Strategy.

Details

British Food Journal, vol. 114 no. 2
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 6 July 2012

Jen‐te Yang

The purpose of this study is to identify the characteristics of a blue ocean strategy (BOS) in selected hotels in Taiwan.

Abstract

Purpose

The purpose of this study is to identify the characteristics of a blue ocean strategy (BOS) in selected hotels in Taiwan.

Design/methodology/approach

Semi‐structured interviews and the grounded theory approach were applied in this study. A total of 32 senior and top managers working in the corporate executive office and the divisions of rooms and marketing were selected from international tourist chain hotels and resorts for semi‐structured interviews.

Findings

The results show that the features of BOS are identifying guest value perceptions, innovating distinctive added‐value offerings, developing new market segments, branding and re‐branding, creating a unique hotel ambience, adjusting distribution channels, and establishing strategic alliances.

Practical implications

The study suggests that in the sampled hotels, hoteliers should integrate a demand‐based pricing strategy with a supply‐based product‐development strategy. Organizational effectiveness could be further advanced in those hotels by the introduction of revenue management based on the determination of variations in guest demand, making it possible to offer different pricing strategies to diverse market segments.

Originality/value

The results show that the sampled hotels should be able to create unique products and services for customers that strengthen their competitive positions in the marketplace of international tourist hotels in Taiwan. This study advances academic knowledge in the field of organizational effectiveness, particularly with respect to managing customer demand and capacity in the hotel industry.

Details

International Journal of Contemporary Hospitality Management, vol. 24 no. 5
Type: Research Article
ISSN: 0959-6119

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Article
Publication date: 1 September 2006

Stan Abraham

This report on the Fifth Annual Conference of the Association of Strategic Planning (ASP), “Strategy in action: lessons from practice,” was held in Long Beach, California…

Abstract

This report on the Fifth Annual Conference of the Association of Strategic Planning (ASP), “Strategy in action: lessons from practice,” was held in Long Beach, California. This report covers the two keynote speakers plus highlights from a selection of the presentations (for more information see the ASP website: www.strategyplus.org). PurposeThe article summarizes the highlights of the Association for Strategic Planning's 2006 Annual Conference held on February 28, 2006 in Long Beach, California, one of the premier strategic‐planning conferences in the US. Design/methodology/approachThis is reportage on the annual ASP conference. FindingsThe remarks of the two keynote speakers are summarized: W. Chan Kim's on “blue ocean strategy” that makes the competition irrelevant, and Milind Lele's remarks on situational monopolies that also, for a time, gets rid of competition. Both authors' remarks were based on recently published best selling books. In addition, of 40 other presentations offered in concurrent sessions, the article highlights a select few, enough to give a flavor of the conference theme of “Strategy in action – lessons from practice”. Practical implicationsThe actual conference (and this report) was targeted both to practitioners and strategic consultants eager to learn about the latest methods and pitfalls in doing strategic planning. Originality/valueBoth audiences will benefit from reading this article principally by learning about the experiences, experiments, and successes of other companies' and consultants' efforts in actually doing strategic planning.

Details

Strategy & Leadership, vol. 34 no. 5
Type: Research Article
ISSN: 1087-8572

Keywords

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Book part
Publication date: 1 August 2019

Anna V. Shokhnekh, Olga A. Mironova, Lidiya A. Sizeneva, Marina N. Semenova and Al-Muttar Mohammed Yousif Oudah

The chapter presents a mechanism of innovational development of cluster of the hospitality industry in the system of region's economic security, which formation takes…

Abstract

The chapter presents a mechanism of innovational development of cluster of the hospitality industry in the system of region's economic security, which formation takes place in the conditions of complex turbulent state of economy, which leads to crises of various scales and volumes. Cluster is treated as a platform that unifies efforts and partnership interactions between large, medium, and small business and synthesizes expectations of consumers on the basis of territorial concentration of readiness to care about a customer in the form of provision of the need: (1) selection and readiness of consumer to accept a specific complex service of the hospitality industry (with tourist service complexes); (2) movement (with transport complex); (3) accommodation (with hotel complex), (4) readiness for catering (with catering complex); (5) entertainment (with participation of complex of entertainment); (6) security (with security complex). The process of clustering leads to a new treatment of the notion of competition, development of capabilities to be a business partner, and finding advantages in generation of innovations together with intermediaries and neighbors.

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Article
Publication date: 17 July 2009

Dennis Pitta

The purpose of this paper is to describe a conceptual strategy approach that can be applied to product development.

Abstract

Purpose

The purpose of this paper is to describe a conceptual strategy approach that can be applied to product development.

Design/methodology/approach

The case describes an approach to avoid dangerous competition and find new uncluttered market space. The methodology is illustrated by a new start up.

Findings

The paper provides an application of the blue ocean strategy approach to developing new products. Using the approach, companies can restructure their product and service offerings to serve new customers and escape from their industry competitors. Their results offer implications for new product development and management teams as well as senior management.

Research limitations/implications

As in all case studies, the specific conditions found in one organization may not be found more generally in others. Readers are cautioned that the conclusions drawn in the case may have limited applicability.

Practical implications

The case depicts the process that firm can use to innovate.

Originality/value

The case describes how a competitive strategy, focusing on customers can transform a company and its products.

Details

Journal of Product & Brand Management, vol. 18 no. 4
Type: Research Article
ISSN: 1061-0421

Keywords

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