Question

Explain the blue ocean strategy. pick a firm that has utilized this strategy and explain why their action is a Blue Ocean Strategy. Would you rather be the only competitor in a blue ocean where the competition just has not found it yet, or the best competitor in a red ocean?

Answer 1

The following are the responses concerning Blue Ocean Strategy and examples of firms using the strategy and its benefits.

Explanation:
Blue Ocean Strategy refers to the pursuit of differentiation and low cost to open up a new market space and create new demand. It is about establishing your own space in the market. It allows the reconstruction of market boundaries by the people in that particular industry. The competition in blue oceans is irrelevant as the rules have not yet been set. They are also powerful in terms of profits and growth of the business.

Examples of firms that have utilized Blue Oceans strategy include: Phillips, Canon, Bloomberg and I Tune just to mention a few.

The Blue Ocean Strategy is characterized by irrelevant competition, breaks the value cost trade-off, creates and captures new demand. With I tunes, Apple unlocked the blue ocean strategy in digital music. iTunes offered legal, easy-to-use, and flexible à la carte song downloads by allowing people to download individual songs at fair prices instead of buying the entire CD. It now offers millions of songs, movies, TV shows, books and podcasts with users downloading them per minute.  

I would rather be the only competitor in a blue ocean where the competition just has not found it yet, rather than the best competitor in a red ocean. This is because there is no competition in blue ocean markets. Also, you can simultaneously use differentiation and low price strategies to create awareness concerning your products/ services. You can also use innovation and technology to increase efficiency and productivity hence the opportunity of growth of such business is rapid and profitable.