In changing dynamics of business there is win-lose competition to survive & exist in market. Today, most of the industries are using various cost reduction techniques to reduce its cost & provide more values to their customer, but if we see these business from top view (machine drawing way) they all are roaming around the bush.
Niche or innovation is way to maintain one’s supremacy and leadership in market. Due to this a new concept of Strategy evolved called
Red Ocean: a brutal battle field where you have to fight for 
survival otherwise you will die. Every company tries to outperform to grab more market share and due to this space gets crowded and prospects for profit & growth are reduced. In the mean time product turns into commodity and intense competition turns the water bloody
Blue Ocean: deep fresh water without any boundaries & restrictions. In 
business management terms, a new virgin market where there is no restriction, no boundary limit & no competition.
According to Blue ocean strategy, either you create new market, new industry (which happens with great innovation & inventions) or create blue ocean in existing red ocean by crossing the boundaries of industry.
The figure given below is similar to the PLC (product life cycle) but it’s an organization development life cycle where u can put any organization & compare its development with change in time.
Fig: Organization development life cycle(ODLC)
Let’s put Google in above graph, it started in September, 1998, as search engine & tied up with 
great biggies & with the success of search engine & advertising, in 2006, Google search captured the market share of 50.8%, yahoo (23.6%) & live search (8.4%) & others (17.4 %).
Every year it introduced new product and gave full time to its users to get accustomed to it. After hit of Google search it launched Gmail, orkut. From the last six years Google has been making its brand image for its users & it was such success that we were searching a person who have Gmail account because it was a prestige for any net savvy person to have an account on Gmail.
From the story of Google I would like to add that continuous development & innovation required to follow the above ODLC (org. development life cycle).
Another example is of Steve job’s , Apple. In initial years of its computer launch it was huge success but later on its process was perfectly copied by Microsoft and presented in much better & customer friendly way to the customer and grab major share of APPLE computer’s market. But that was not the end, Apple applied game theory & blue ocean strategy and target new market segment – entertainment and reenters with APPLE i-pod was a huge success
Other Successful blue ocean strategy examples are :
- Starbucks (coffee as low-cost & luxury for end consumers)
- Dell’s built-to—order computer
- Disney’s full length animated movies
- Sony walkman
- Orkut.com
- Himalyas LIV52 (medicine)
- Paras pharmaceutical
- Mumbai Dabbawala ………………………
“ Success of Blue ocean strategy depend upon managers & CEOs”
IS IT TRUE………Just think about it
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5 comments:
The article is a gr8 insight into strategy, its different than the articles posted so far. As u have suggested that success of blue ocean strategy depends on Managers & CEOs. I don't agree wit u. Take the example of Google. Its core competency is innovation wit which its keeps venturing into fresh waters. Let's say orkut which has become a craze with young folks. Orkut was developed a middle level employee of Google (by the name orkut). This shows strategy is not confined to the top notch. All u need is an idea.
i agree with ur arguement but i am giving u a very simple example of my self that i am working on Airtel's two projects and design a new strategy for them, but i don't have power so i will have to expalain whole theme to my seniors & yes they approve it because its benefical for the company but it will be properly executed & implemented by any of senior manager because i have insight of my my organisation which very limited but don't have any idea of its further implications on/from external enviornment. So i will be rewarded for my good job but for that i need one leader who will help me to find out the pros & cons of my strategy.
Now tell me what is ur view on this.............
this is old wine in new bottle.
the idea of differentiating ur product or service from the competition has always been there.
as far as marketing ideas are conerned, there is hardly any true innovation, ACADEMICALLY, in the recent days
@ MP
I wud like to dispel a myth that strategy is always formulated by generals. Sometimes u get idea from unknown counters. To formulate a strategy u only need to have bird's eye view of things which only comes wit either being in a position of vantage (in military terms on a hill)or ur shear experience of the battle field, but sometimes the oldest soldier is never the general. Sometimes this is wht happens when young folks lik us go into the corporate world and fall flat bcoz v forget that the oldest employee knows how things work on the shop floor.
@jyoti
i feel marketers contribute a lot to innovation. Last year i had read in times that almost 90% of the patents never happen bcoz of the R&D team its the marketing team which comes out wit the ideas. bcoz marketer is the one who knows wht the consumer wants.
first thanks to u both Jyoti & shetty;
for making this discussion interesting.
I read a book on 6 six sigma in which it was written by author(6 sigma consultant in America) that sales persons or supervisors are real heroes "front end warriors" they know the bottom of every minute things.they are one who can give valuable suggestions & sometimes solutions for process or product improvement.She was there in one manufacturing company for implementing 5S philosophy and finds that workers were very lethargic & non participative reason was no space for their suggestions & ideas.
But when she was able to convince them she amazing inputs from them which ease her implementation process. As harish mention "bird view" it can only be provided by someone who know can do PEST because these heroes can do SWOT but lag in PEST analysis.
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