Blue Ocean Strategy is helping companies to look beyond the horizon by tapping into the untapped potential of market. The generic defining principle of blue Ocean strategy is “Stop fighting by being a rival in the market, instead, instill innovation and embark on the journey of creating Blue Ocean in the form of new customers”.
Consequently, it is given importance over red ocean strategy which reflects to “fighting among the competition and turning water into red color by shedding blood of each other (rivals)”.
Let us cast an eye over the typical differences between red & blue ocean strategy,
Let us illustrate the complete example by using tools & theory of Blue Ocean Strategy. (As defined by Prof. Kim & Prof Reegne)
Cirque du Soleil
A onetime accordion player, stilt-walker, and fire-eater, Guy Laliberté is now CEO of Cirque du Soleil, one of Canada’s largest cultural exports. Created in 1984 by a group of street performers, Cirque’s productions have been seen by almost forty million people in ninety cities around the world.
Problem Addressed
At the time of its debut, other circuses focused on benchmarking one another and maximizing their share of already shrinking demand by tweaking traditional circus acts. This included trying to secure more famous clowns and lion tamers, a strategy that raised circuses’ cost structure without substantially altering the circus experience. The result was rising costs without rising revenues, and a downward spiral of overall circus demand.
The value innovation concept was to decrease the cost by increasing the value for customer. As Warren Buffet (World’s 3rd richest person) said “Value is what you get and price is what you pay.”
Now, let us have a look at the factors and strategy canvas, which helped the company creating a stream of revenue.
Simply put, Circus Company addressed the following factors in a proficient manner to stand out of competition.
All the factors changes are done by keeping in view the visualizing factors
- Finally the strategy canvas (A curve to see where your company stands relative to competition) of subjected company thrilled everyone by configuring the optimal setting of factors.
Now you would have a clear idea of what “Blue Ocean Strategy” can do to create a fortune for your company.
“Vital few variables can enlighten any entity, to map out the strategy canvas in the light of blue ocean phenomenon and eventually hidden customer portfolio will unfold before the stakeholders”
Reference: Book “Blue Ocean Strategy” by W. Chan Kim, Renée Mauborgne
