Oceans and Business Strategy? Can they be related? Oh yes, they can! If you can relate blue to newness and red to the current, then they definitely can!! Here, I will compare the Red Ocean and Blue Ocean Strategies as applied to business.
Red Ocean Strategy:
The Red Ocean Strategy is applied to the existing marketplace and deals with increasing the market share of an existing business. It focuses on increasing the customer base by tapping the existing demand in the market. According to this strategy, either differentiation or low cost should be used and not both. Market segmentation should be done by focusing on special needs of customers. Finally, according to Red Ocean Strategy, implementation follows a well documented strategy formulation.
Blue Ocean Strategy:
The Blue Ocean Strategy is applied to creation of a new market and deals with increasing the scope of a business. It looks to capturing current non-customers and potential future customers by the creation of new demands in the market. Unlike the Red ocean Strategy, the Blue Ocean Strategy focuses on value innovation by simultaneous use of both differentiation and low cost. It looks at varied customer needs and thus desegments the market instead of segmentation. Blue Ocean Strategy focuses on the improvement of three pillars of value, profit and people.
The above comparison was done by Senior Global Blue Ocean Strategy Network Member Dr. Zunaira Munir
No comments:
Post a Comment