Blue Ocean Strategy Paper


November 30, 2015

The blue ocean strategy is a unique marketing approach aimed to building a strong customer base. The strategy aims to develop a new market segment within the industry and does not focus on overcrowded existing markets with a lot of competition. In the recent years, with the advancement of technology and global development the blue ocean strategy has evolved. This paper will cover the blue ocean strategy and red ocean strategy and give examples of both.
Sometimes a new product must sell for less than a competitor even though the new product is far superior in quality than the industry leader. Blue ocean strategy eliminates the need to compete with existing competitors by creating a brand new marketplace that has no competition. By introducing a product that is new and does not have a market, a company is able to use this strategy to build a strong product that will increase profits and revenues. Through advertising of the new product or service, a company can create their own market without having to worry about other competitors. When you are the first to create a market for a product, it is easier for you to create loyal fans and customers.
An example of a blue ocean move would be when Nintendo decided to create its own market when the gaming system developed the Wii in 2006. The controllers that were incorporated into the controllers required the user to be more active because of the sensors. This prompted gamers to become more active and parents were more likely to buy this product for their kids because it let them play indoors safely and keep them physical. Mario Kart was another reason many fell in love with the Nintendo Wii. Now people could play this beloved game by the motion of the controller to make it more engaging and interactive.
Red ocean strategy is the complete opposite of blue ocean strategy. The alternative creates a product in an already established marketplace. There are a few benefits to going this route. Companies can use the current products in existence to develop something better based on the feedback from consumers. This eliminates the process of trial and error in a blue ocean movement. There is already an established demand so the business no longer needs to spend so much in educating the customer about this new product. The only downfall to this strategy is it can be very difficult to find a niche within mature markets. There are already main competitors who have taken most of it.
An example of a red ocean move would be how Ford and Chevy are competing with the Mustang and Camaro respectively. Every year each brand releases a variant of each car that so called “one ups” the other brand. Some years there are more than one variant upgrades. Both brands try to do a redesign within 2 years of the other to keep buyers clamoring for more. Neither brand needed to re-educate its customer on the cars, because of the brand loyalty. Both cars were there at the start of the pony car wars, and the history of them.
Marketing strategies are plentiful for companies to choose from. Both the blue ocean and red ocean strategy has its own pros and cons. Blue ocean strategy can be more lucrative and companies will not have to worry about competition when they create their own marketplace. However, a red ocean strategy can still be beneficial because there is already a proven demand and need for this market. The only issue is there is more risk and cost in competing with current competitors.

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