Business strategies: Blue Ocean Strategy

INSEAD School

Seminar Paper , 2008 , 43 Pages , Grade: 1,7

Business economics - Business Management, Corporate Governance

In a business context, it is inevitable that one of the main words one would hear is competition. In a way doing business is like participating in a competition for market share, profits etc. Even one of the basic theories of trade, the one of Ricardo, speaks about the competitive advantage and its importance.

But how to become successful in doing business? Does a recipe exist which guarantees that a business could thrive and be successful? On the one hand one could argue that business opportunities arise from the environment, lead by an “invisible hand” and the essentials of doing business are similar to the one centuries ago and that people do not have substantial influence. On the other hand, others would argue that the success of a business is predominantly result of the well-prepared planning and in that way is connected more to the human (merchant’s) abilities rather than to the environment itself.

Surely, the centuries of business history has shown that answering the question what makes a business successful does not have a clear answer. It would be very shallow way of thinking to give a simple answer to this question. Surely, the environment plays an important role for the business but the other way round, doing business is not a random game. In contrast, only thinking strategically without being in the appropriate environment and without any resources, it is quite impossible to set up a successful business.

Furthermore, the business environment is not static but instead very dynamic. As the time passes by, businesses change and what was true about business success centuries or even a decades ago, is not true any more. At the same time, it does not mean that business now and in the past has nothing in common. On the contrary, nowadays the business and management science is so complex and possesses sophisticated methodology and tools which help to prove that the strategical way of thinking in the context of doing business is an essential part of the success of a company. And even the understanding of business strategy is different because it could range from simple planning to the application of very complex scientific business models. However, as the business environment changes, so do the business strategies as well. That’s why some of the often considered for true strategies, seem to be out-of-date with the business reality. For that reason, if a strategy does not work, one has to check it again.

Inhaltsverzeichnis

• List of Abbreviations
• Table of Figures
• 1. Introduction (DD)
• 2. Necessity of strategic management (DD)
• 3. Blue Ocean Strategy
• 3.1. Examples for Blue Ocean Strategy (KN)
• 3.2. Analytical Blue Ocean Tools (KN)
• 3.2.1. First Tool: The Strategy Canvas (KN)
• 3.2.2. Second Tool: The Four Actions Framework (KN)
• 3.2.3. Third Tool: The Eliminate-Reduce-Raise-Create Grid (KN)
• 3.2.4. Three Qualities (KN)
• 3.3. The six principles of formulating Blue Ocean Strategy
• 3.3.1. First Principle: Reconstructing market boundaries (KN)
• 3.3.2. Second Principle: Focus on the big picture (KN)
• 3.3.3. Third Principle: How to create demand (DD)
• 3.3.4. Fourth Principle: Business Model (DD)
• 3.3.5. Fifth Principle: Overcoming key organizational hurdles (DD)
• 3.3.6. Sixth Principle: Build Execution into Strategy (KN)
• 4. Evaluation and future trends
• 4.1. The Helo Effect - a critical opinion from McKinsey (KN)
• 4.2. Blue Ocean and the future of management (KN)
• 4.3. Innovation management and blue ocean strategy (DD)
• 4.4. Geographical Differences (DD)
• 4.5. Critique of the Blue Ocean Strategy (DD)
• 5. Conclusion (DD/KN)
• Appendix
• References
• Internet Sources

Zielsetzung und Themenschwerpunkte

This term paper aims to explain the basic concept of the blue ocean strategy, present the tools used in the creation of an uncontested market, and illustrate it with examples from the real business life. The paper also critically evaluates the blue ocean strategy and its relevance to a company's business nowadays.

• The concept of blue ocean strategy and its shift from competition within existing industries to the creation of new industries.
• Analytical tools used in blue ocean strategy, including the Strategy Canvas, the Four Actions Framework, and the Eliminate-Reduce-Raise-Create Grid.
• The six principles of formulating blue ocean strategy, including reconstructing market boundaries, focusing on the big picture, creating demand, developing a business model, overcoming organizational hurdles, and building execution into strategy.
• A critical evaluation of the blue ocean strategy, including its potential limitations and future trends.
• The relevance of blue ocean strategy to innovation management and geographical differences.

Zusammenfassung der Kapitel

The introduction provides a general overview of the importance of strategic management in a dynamic business environment. It highlights the need for companies to adapt their strategies to changing market conditions and explores the concept of blue ocean strategy as a potential solution.

Chapter 2 delves into the necessity of strategic management, defining key terms and concepts. It emphasizes the importance of strategic planning for a company's success and sets the stage for understanding the blue ocean strategy.

Chapter 3 focuses on the blue ocean strategy itself, providing examples of its application in real-world business scenarios. It introduces the analytical tools used in blue ocean strategy, including the Strategy Canvas, the Four Actions Framework, and the Eliminate-Reduce-Raise-Create Grid. The chapter also outlines the six principles of formulating a blue ocean strategy, emphasizing the importance of reconstructing market boundaries, focusing on the big picture, creating demand, developing a business model, overcoming organizational hurdles, and building execution into strategy.

Chapter 4 evaluates the blue ocean strategy and explores its future trends. It examines critical opinions from McKinsey, discusses the impact of blue ocean strategy on the future of management, and explores its relevance to innovation management and geographical differences. The chapter also presents a critique of the blue ocean strategy, highlighting potential limitations and challenges.

Schlüsselwörter

The keywords and focus themes of the text encompass blue ocean strategy, uncontested market space, strategic management, innovation management, business model, competitive advantage, market boundaries, and the future of management. The text explores the concept of blue ocean strategy as a means of creating new markets and achieving sustainable competitive advantage. It examines the tools and principles involved in formulating a blue ocean strategy, as well as its potential impact on the future of management and innovation.

• College: Hamburg University of Applied Sciences
• Course: Marketing Strategien
• Grade: 1,7
• Authors: Katharina Niciejewska (Author), Dimitar Dimitrov (Author)
• Publication Year: 2008
• Pages: 43
• Catalog Number: V115235
• ISBN (eBook): 9783640472000
• ISBN (Book): 9783640471935
• Language: English
• Tags: Blue, Ocean, Strategy, Marketing, Strategien, Strategic Management, Management, Insead School