Question

Explain an argument in the ‘NEGATIVE’ forum that the pursuit of Blue Ocean strategy IS NOT EFFECTIVE and doomed to fail. Refute the Blue Ocean strategy and its claim that it breaks the value/cost trade-off through the simultaneous pursuit of differentiation AND low cost. Your argument should cite example(s) or evidence to support your claims.

Answer 1

Blue Ocean strategy looks at exploring new markets seeking no competition and first mover advantage along with low cost,now it looks a nice strategy with no competition,first mover,low cost,however the catch is that the process of exploring places with no competition can also lead to place with no potential for actual market growth,that is company in process of exploring new markets can end up developing products which has got no or very less takers,one of main arguments of blue ocean strategy is that it lets you develop and provide products at low cost owing to no competition and can help you percieve differentiation and achieve profits in process,however this market even if successfully developed can be captured by competitors or other players owing to the level of technology present,so there are two possibilities,first where a company pursue an unexplored market and new customers and succeed,now in that case it may enjoy some benefits for a short period of time but will end up facing competition very soon and second it miscalculates potential and end up in a position where it finds no takers,so in both cases strategy is bound to not be super successful as hyped upon,now in terms of examples,one can look at Amiga personal computers which started with much hope in Blue ocean strategy but less than a decade later,their introductors Commodore went bankrupt owing to competitors providing better features,so what started as a blue ocean soon turned into a disastrous red ocean for Amiga.Another example is of Apple newtonpad in 1993,poor features with mixed results for handwriting recognition and expensive price,it was discontinued in coming years and Apple switched to its core.

Thus Blue ocean strategy may seem lucrative but above explanation and examples show that it can turn out to be poor with wrong execution or if people are not ready,even if everything goes well,soon competitors will be there and it will be the same story again.