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Pros and Cons of Blue Ocean Strategy Essay Sample

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Pros and Cons of Blue Ocean Strategy Essay Sample

 Blue ocean strategy makes the competition irrelevant by creating a new market space where there is no competitions. There are many pros and cons of this strategy- the main and considerable advantage of this strategy is the first mover benefit in terms of market penetration where the companies see no competition and hence these companies become the king of the market. These companies never use competition as the benchmark and hence there is more scope for implication of technology in the new upcoming products as there will be no market boundaries. This strategy is suitable mainly for small business organizations as it involves less risk and less capital investment Though blue ocean strategy has many advantages, it has few cons as well like- finding an untapped market is difficult especially in a globalized world where information reaches corners of the world very fast. Measuring the customer interest becomes difficult as the customer base is very huge and hence this strategy is risky if there is no demand for the product. Uncontested or untapped market sooner or later becomes Red Ocean, as blue ocean strategy is more attractive and hence creates competition and the organizations lose first mover benefit.

Companies that enter the market late, have ability and advantage to study the behavior of the existing products and hence come up with a better product. Indian car market was a monopolistic market ruled by Hindustan Motors and Premier Automobiles in 1980’s. Studying this market , Maruti Udyog Ltd came up with Maruti 800 which was the first ever fuel efficient car in India which had international technology. This car became a huge success as it had all the advantages being the first mover in an untapped market. It captured around 75% of the market share and ruled the market for almost 15 years. But gradually this blue ocean market became Red Ocean as many other companies like Hyundai and Chevrolet entered the market. This was the time when Maruti redesigned its strategies and came up with a middle level car –Swift. Swift again brought a huge success to the company. Hence to retain the first mover advantage, companies should create high degree of brand value in the blue ocean; a good research about the needs and wants of customers and creating a market system that is simple to adopt and implement.

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