Blue Ocean Strategy
In 2005 the book Blue Ocean Strategy, by professors W. Chan Kim and Renee Mauborgne, was published. The book is based on the studies over one hundred strategic moves of industries over the years. The publishers argue the successes firms achieve when creating “blue oceans”. The strategic moves made focus on the increase of the company’s value, buyers, as well as achieving new demand and knocking out competitors. Instead of constant competition the blue ocean strategy focuses on building new market segments. With today’s continuous advancement in technology and rise in globalization, the blue ocean strategy has become more popular in use.
Blue Ocean Strategy in Marketing
When developing a new product, there are many steps to take and processes. Most start with the four Ps of marketing, which is product, placement, price, and promotion. There is also the product life cycle to take into consideration, which includes market introduction, market growth, market maturity, and sales decline. What these processes all have in common is the analysis of how to make their product beat the competition. Marketing is full of constant competitiveness; industries never cease to stop competing for every piece of available market share they can get their hands on, but what if it doesn’t have to be this way.
Blue ocean strategy is trying to eliminate competition altogether. Its goal is to be able to create a marketplace that is a competitive free market. This strategy pushes companies to think outside the box and create an uncontested market space. Creating a new marketplace allows a companies to eliminate competition and break the value/cost trade off.
Blue Ocean Move
Cirque du Soleil, the Canadian entertainment company, is considered to be one of the largest theatrical performances in the world. Two street performers, known as, Guy Laliberte and Gilles Ste- Croix, founded the show in 1984. Cirque du Soleil is known for its dramatic mash up of circus performing arts and street entertainment.
This is a great example of a blue ocean move. Cirque du Soleil is neither in the circus business nor in the Broadway production business. Cirque du Soleil is its characterized in its own marketplace.
"Cirque did not make its money by competing within the confines of the existing industry or by stealing customers from Ringling and the others," Kim and Mauborgne explained in the Harvard Business Review magazine. "Instead, it created uncontested market space that made the competition irrelevant. It pulled in a whole new group of customers who were traditionally noncustomers of the industry — adults and corporate clients who had turned to theater, opera or ballet and were, therefore, prepared to pay several times more than the price of a conventional circus ticket for an unprecedented entertainment experience."
Red Ocean Move
Red ocean strategy is simply the opposite strategy of the blue ocean strategy. Red Ocean is where a company produces a product in a crowded marketplace. A red ocean is typical where industries are, in a defined market, competing to be on top. The researchers called this the Red Ocean, analogous to a shark infested ocean where the sharks are fighting each other for the same prey.(Dr. Layton)
For Cirque du Soliel to make a red ocean move and create competition does not have any pros to it. Cirque du Soliel is already the world’s largest and most profitable theatrical performances in the world. Creating a defined market would only limit their abilities and give their competitors a fighting chance.
Conclusion
The blue ocean strategy is becoming more and more popular. Many technological industries are indorsing this strategy to achieve a competitive advantage in the market. Blue ocean strategy focuses on noncustomers by creating uncontested markets, eliminating competition, creating new demand, and with eliminating the value/cost trade off. While Red ocean strategy focuses on current customers by competing in existing markets, destroying competition, exploiting demand, and making the value/cost trade off. The blue ocean move brings newer opportunities for the marketing world, but the Red Ocean move will always be the more popular route for industries.










Reference:
Chan Kim, W., & Mauborgne, R. (2004, October 1). Blue Ocean Strategy. Retrieved June 29, 2015, from https://hbr.org/2004/10/blue-ocean-strategy/
Dr. Layton, S. (2009, April 21). Red Ocean vs. Blue Ocean. Retrieved June 29, 2015, from http://www.corporatestrategy.com/red-ocean-vs-blue-ocean/