BLUE OCEAN STRATEGY SAMPLE
A Blue Ocean strategy refers to the process of creating a new market. It emphasises non-customers and makes the system of competition insignificant. The main aim of this strategy is to increase the level of demand and market share. In this strategy, the costs incurred were low and the market formed was different from the existing ones. The higher return on investments is the main feature and advantage of this strategy (Mittal and Pachauri, 2012).
IMPORTANCE OF BLUE OCEAN STRATEGY –
With the help of advanced and sophisticated technologies available, productivity increases. It creates a situation of more supply than demand. As the rate of supply is high, the costs involved in the process of production decrease. Blue ocean strategy is a good approach for the non-customers and establishment of the new market. Furthermore, it minimises risks involved in the policies adopted in the strategy. An industry with more competition is less preferred by the market than a less competitive industry. The other companies existing in the market can also be attracted to this strategy after acknowledging its success and development. There is no competition fight for the development and growth of the industry involved. It is easy to attain an increase in sales and profit earning capacity of the business in the market. The opportunities to enhance the activities of a business are more in the blue ocean strategy than the red ocean strategy (Navis C. and Glynn M. A., 2005).
A BUSINESS SERVICE THAT USES BLUE OCEAN STRATEGY –
Nintendo is a game service that follows the blue ocean strategy. Most recently, a service o Wii has been launched in this business. With the use of the blue ocean strategy, this service provides the customers with a new and innovative motion of sound value. The costs incurred are very low as compared to other game services because of the low-speed facility. There is no DVD and HD along with it. Nintendo did not get involved in any other strategy as the blue ocean strategy gives the benefit of no competition and a new market. Furthermore, this strategy uses policies and procedures which are easy to understand and communicate with the employees. The concept of making the noncustomers get interested in Wii was adopted by the business of Nintendo. The requirement of simplicity and interactivity was accomplished with this strategy. In order to avoid competition with other businesses such as Microsoft and Sony, Nintendo carries out its business with this strategy. There is no wastage of time in understanding the complex procedures and technologies required to beat the competition existing in the market.
AN ALTERNATIVE RED OCEAN STRATEGY WHEN APPLIED IN NINTENDO –
On the other hand, the red ocean strategy cannot work in the business of Nintendo. The low speed and lack of other facilities would result in the degradation of this business. It would not be able to sustain in the market for a long time period as there are high competitors like Microsoft and Sony. The advanced policies and techniques used by the other competitors would decline the market demand of Nintendo as well as the profit-earning capacity. The focus must be on the existing customers and not non-customers in the red ocean strategy. Nintendo would have to provide better facilities to exist in the market. The prevailing demand for the other products would have to be beaten by this business in order to make profits. To conclude, the red ocean strategy cannot be adopted by this business as the results would be in high loss occurrence.
THE BLUE OCEAN STRATEGY – PROS AND CONS
- The production takes place at a high level because of the new and improved policies adopted in the business operations (Liang, T. P., Czaplewsk, A. J., Klein G., Jiang, J. J., 2009).
- The definite structure, guidelines and programmes followed in this strategy ensures that the results obtained would be positive in all aspects.
- The cost of production is low as the resources available are utilised at their optimum level and there is no wastage involved in the business activities performed
- A large number of customers are attracted towards the industry handled by this strategy.
- It is a step-by-step strategy that is based on a very low-risk factor.
On the other hand –
- It makes the factor of competition insignificant and unnecessary. The new ideas and products might not provide with the desired results.
- This strategy is time-consuming as the new products have to be introduced in the market and the customers must be convinced about their quality.
- The capabilities and resources available may not be sufficient enough for the development of the industry.
- The new market and policies often result in the decline of the industry due to lack of confidence and faith.
REFERENCES –
- Liang, T. P., Czaplewsk, A. J., Klein G., Jiang, J. J. (2009); “Technical opinion: Leveraging first-mover advantages in internet-based consumer services“; Communications of the ACM – One Laptop Per Child: Vision vs. Reality; Volume 52 Issue 6, June 2009; Pages 146-148 35.
- Lindiča, J.,Bavdaža, M., Kovačičb H. (2012); “Higher growth through the Blue Ocean Strategy: Implications for economic policy)“; Volume 41, Issue 5, June 2012, Pages 928– 938 36.
- Hammersley, M. and Foster, P. (Eds.), “Case study method: Key issues, key texts” (pp.119- 163). London: Sage Publications. 37. Mills, John Stuart (1843); “A system of logic”; London: John W. Parker. 38.
- Mittal and Pachauri (2012); “A Comparative Analysis of Promotional Tools & Techniques Adopted For Retail Banking In Public Sector and Private Sector Banks“; Blue Ocean Research Journals; Vol 2, No 2 (2013) 39.
- Navis C. and Glynn M. A., (2005); “How New Market Categories Emerge: Temporal Dynamics of Legitimacy, Identity, and Entrepreneurship in Satellite Radio, 1990–2005”; Administrative Science Quarterly September 2010 vol. 55 no. 3 439-471 40.
- Parmar, D., Thadamalla J. and Suresh K. (2010), “Retail Merchandiser Fabindia: Crafting Community Ownership for Inclusive Growth?“; IBS Case Development Centre; Managing Innovation – Vol. I
