Blue Oceans Essay Sample

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The main ideas of the text is to differentiate blue oceans and red oceans: * Red oceans: the market space is known and all the industries exist today. Industry boundaries are defined and accepted and competitive rules of the game are understood. Firms try to overcome its rivals to catch a greater demand so prospects of profits and growth are reduced * Blue oceans: Industries not in existence today demand created. The market space is unknown. 2 ways to grow: Give rise to new industries (EBAY: auction industry) and Go from a red ocean, when a company alters the boundaries of any existing industry * Trade Barriers are disappearing, niche markets and monopolies also and it leads to an increase of blue oceans * A blue ocean strategy is a consistent pattern of strategic thinking behind the creation of new markets and industries Competition is not in the dictionary of blue oceans, you must look to more lucrative aspects of the strategy: One is to find and develop markets where there’s little or non-competition (blue oceans) and the other is to exploit and protect blue oceans. What is it important about Blue Oceans?

* Blue oceans are not about technology innovation, technology has already existed, you must simplify it * Incumbents make blue oceans, especially within their core business * Strategic move is the key, not company and industry for Blue ocean companies, about managerial actions and decisions * Creating blue oceans build brands and it’s very difficult to imitate them.

Blue oceans break with the idea of the trade-off between costs and differentiation, you can reach both of them. Cirque de Soleil: a mix of theater and the traditional circus, a reconstructionist view, typical in Blue Oceans, not about a determinism view as in the Red Oceans case. Cirque has created a blue ocean of uncontested market space that has yet no name. There are barriers to imitation: Economic and cognitive barriers. Blue oceans attract customers rapidly and apart from that, there are companies which cannot change its structure to become a blue ocean or compete with a blue ocean company because it would be too costly. Blue and red oceans have always coexisted, strategies are different depending on the kind of company, if it’s a red or if it’s a blue ocean one, if we’re able to differentiate the strategies of both of them, we will be able to create more blue oceans. All in all, the main characteristics of the Blue Oceans are: don’t care about competition, create uncontested market space, create demand, don’t care about the value/cost trade-off and pursuit differentiation and low cost and align the value and price , important characteristics from the customers’ point of view and the cost structure of the company to manage all this

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