In the world of business there are many ways to work, and they are very different, in this case im going to talk about the blue ocean strategy, and the basic for this strategy is that companies need no challenges themselves, not with other companies, on the other hand we said that a Company has a red ocean strategy when they compete with other companies, and thats why these 2 are different, not only in the color, also in the concept.
BLUE OCEAN STRATEGY
This concept comes from a book with the same name “Blue Ocean Strategy” (Harvard Business Review Press 20050), by W. Chan Kim and Renee Mauborgne. The primary concept si avoid the bloody path of business, and thats how we know the red oceans, instead of looking how to compite with the others, create new ways to work and free of competitors. The main idea of this is to create a model of business with low cost and that low cost be the differentiation, when a Company do that, get it the blue ocean. To get together the differentiation and the low cost there are 4 key questions that apport some basic stuff that is neccesary to get in the blue ocean. •Raise: What factors should be raised well above the industry’s standard? •Eliminate: Which factors that the industry has long competed on should be eliminated? •Reduce: Which factors should be reduced well below the industry’s standard? •Create: Which factors should be created that the industry has never offered?
For some companies its complicated answer this questions, but in fact, this are some elements that companies in the red ocean, see in the opposite way. In the blue ocean your Company is the principal element, defined as the title indicates, you have all the water for yourselve. They need to change the concept of competition, and focus on the competition inside the Company, that means that they need to check every idea that comes from the Company. An example of blue ocean strategy is cirque du solei, they take the concept of circus and changed it, instead of animal the main part of the circus is the estravagant dance and other things like opera and ballet, also the customers are different, mostly of them are adults, unnatural for a normal circus. Another example comes from Nintendo and their revolutionary product, wii, that comes i 2006 and with that, Nintendo offers an original and fun way to play, besides their principal competitors sony and Microsoft, they focused in create an unique product, and also, without a powerful cpu Nintendo reduce the production cost and give a exciting way to play.
RED OCEANS STRATEGY
This is the normal market place, the place where companies confront other companies and swim in the bloody sea. Companies try to outperform their rivals to grab a greater share of existing demand, usually through marginal changes in offering level and Price. These companies are normal for the people and society, and in fact the majority of companies in some form practices the red ocean strategy. This companies are in constant fight with others, and they are always watching the prices of the competitors, and offer a better Price, its a simple concept that doesnt have science they are just normal companies doing the same stuff always, watching the actions of others and always in danger. This is a concept that doesnt have a lot of science, its just the normal market that we are seing evey day.
The red ocean strategy maybe Works for big companies, but this doesnt define i fis the best option, companies should use the blue ocean strategy because when a lot of companies do the same, the results are going to be the same, and what a Company look for is to get bigger than what they were yesterday. In the concept of blue ocean strategy i dentify that the innovation has a special role in this model, they need to create something different from the rest, and when they do that, they are innovating, but this innovation needs to be unique, that means that only the Company that introduce the change can afford to repeat that unique process. The blue ocean strategy is the best option for every Company, including big companies.