Core strategy tools 7 focusing on the positives and opening up opportunities. Porters five forces is a very competitive marketing strategy. Traditional competitive strategy vs blue ocean strategy. Value innovation strategy competes in an uncontested market space. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. The best takeaway from this book is, of course, porters five forces model. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. The blue ocean strategy on the other hand is purely a strategy. Chan kim is the codirector of the insead blue ocean strategy institute and a chair professor of strategy and international management at insead. Blue ocean holds its ownuntil competition erodes profits from innovation, after 15 or so years. What makes blue ocean strategy better than porters five. Blue ocean strategy usually talks about creating a blue ocean for your business and creating barriers for other businesses to imitate. The chart above summarizes the distinct characteristics of competing in red oceans red ocean strategy. Most business books focus on beating the competition.
Ashley molina niranjan zende siddharth kumar zain yusuf what is a blue ocean blue ocean is nothing but an analogy to describe the wider, deeper potential of a market space that is yet to be explored. To be sum it up, porters five forces model is a common or a general model that conceptualizes the understanding of strategy. Porters 5 forces vs blue ocean strategy how disruptive innovation transforms your relationship to the market. Kim and mauborgne attack the famous five forces market analysis head on. The expanded edition of blue ocean strategy, is metaphorical, witty, and almost biblical in its commentary of the bloody waters of competitive red ocean market forces. Blue ocean strategy simply means finding a new market for your productservice instead of fighting for a larger share of the current market. After almost fifteen years, the idea of creating a blue ocean strategy is still very popular. Professor joe tidd identifies the weaknesses of the traditional five forces approach to strategy, and the advantages of adopting a blue ocean strategy. Discuss the strengths and weaknesses of each strategy within your comparison. Porters five forces model looks at the current market and allows the company. Why is the evidencebased methodology significant for the study of. In this article, we will look at what is a blue ocean strategy.
Like the blue ocean, it is vast, deep and powerful in terms of opportunity and profitable growth. The firms survival and competition through global expansion. I wish i could say my own pursuit of enlightenment led me to chan kim and renee mauborgnes masterpiece on embracing and leveraging difference. Porters five forces model and blue ocean strategy kim. Porters five forces analysis is a framework for industry analysis and business strategy development formed by michael e. The books that were mantras when i was in school were competitive strategy and competitive advantage. Are you a five forces disciple or a blue ocean enthusiast. Michael porters five forces strategy before going to compare blue ocean strategy and porters five forces strategy, let us get a better understanding of what these strategies actually are. And given that their recent followup book blue ocean shift 2017 turned into an. Lets focus on two of the businessworlds trending marketing strategies for electronic market space today blue ocean vs.
Blue ocean strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture their own blue oceans. A company will have more success, fewer risks, and increased profits in a blue ocean market. A good strategist would use five forces to understand the indust. Blue ocean strategy is a book published in 2005 and written by w. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean strategy, outlines the processes of removing the fight for competitive advantage and the battle for differentiation typical of many corporate strategies. Business strategy from michael porter to blue oceans to. The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. About for books hbrs 10 must reads on strategy including. Porters competitive strategy models five forces model and value chain are two of the competitive strategy models contributed by michael e porter of harvard university professor s of harvard business school.
Porter, the five competitive forces that shape strategy, building your companys vision, reinventing your business model, blue ocean strategy, the secrets to successful strategy execution, using the balanced scorecard as a strategic management system, transforming corneroffice strategy. In the integrated approach to strategy at the system level, blue ocean strategy requires organization to develop and align the three strategy proposition. Are you a fiveforces disciple or a blueocean enthusiast. Fortunately, i found out that they think its a battle of which of the two strategies is the most effective way in the industry. The authors suggest a blend of blue ocean vs five forces the case centre, for educators. Supports and critiques on porters competitive strategy. In this study michael porters five forces model adapted for the food industry. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy, expanded edition. Porters five forces model is an analytical framework for assessing business competitiveness strategies in a particular market. In these books and others porter introduced models, tools and methods to analyze the. To refer to the hr analogy, it is like herzbergs hygiene motivation theory which recommends building motivation factors in a job or mc gregors x and y.
Professor joe tidd identifies the weaknesses of the traditional five forces approach to strategy, and the advantages of adopting a blue ocean. Porters five forces model, blue ocean strategy and. What is blue ocean strategy about blue ocean strategy. According to the five forces model, which of the following is viewed as a major risk to a business pursuing a costleadership strategy. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Student questions blue ocean strategy vs porters generic. A landmark work that upends traditional thinking about strategy, this bestselling business book charts a bold new path to winning the future. Porters five forces model versus a blue ocean strategy porters five forces model, provided by michael porter, is an external environmental analysis tool for a specific market this model emphasizes that in any existing industry, there are five competition forces. There are many ideas floating out there about what makes a business successful and how to remain successful. Market competing is the main driver in the red ocean industries which is. They may be termed as industries which are nonexistent today untainted by competition demand is created and not fought over. It takesoff from the five forces model as the launchpad. The elimination reduction improvement creation net 4.
The structure can be created or recreated by the steps taken by players in the market. This blog article is a overview of some of the key points of the book by w. Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. If you are new to strategy, you should read a basic book first before coming to this book. Also, they stated that the field of strategy provides an array of.
Blue ocean strategy including examples and pdf download. Porter s five forces model versus a blue ocean strategy. The article reports on the authors research in the netherlands which focused on a profit model in dutch retail stores and a socalled blueocean approach which requires a new market that attracts consumers and increases profits. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. Why do business people always compare porters five forces and blue ocean strategy. Strategy and thinking is not limited by preconceived barriers, and a shift happens from a focus on the supply side to a focus on the demand. Porters strategy model vs blue ocean strategy oliver, member hi all, in my opinion, the blue ocean strategy refers to a strategy undertaken by an organization in a new dimension or area in which its competitors havent ventured into.
Blue ocean vs five forces the case centre, for educators. Hence in essence the organization creates its own new market. Porters five forces model and porters value chain sony. Technological environment the broad porters industry analysis five forces model competitive industry life cycle company analysis see section on. Question 14 20 pts discuss the importance of evidencebased e. Well, he actually wrote a number of books about corporate strategy, competitive advantage and a number of other topics. Blue ocean strategy harvard business school press, focuses. This book completely changed the way i view the business world. Chan kim and renee mauborgne argued in their 2005 book blue ocean strategy, that the competitive approach of strategy is pretty flawed. That is, do you try to dominate existing markets or look for opportunities to create new ones. It views longterm competition as the main concern that business people should be. Sarah layton in blue ocean strategy on april 21, 2009. A design used to show how companies or industries are affected by external factors. Its not better its just different porter five forces model is used to understand the dynamics of an industry while blue ocean is a specific strategy choice a company can pursue.
The goal of a blue ocean strategy is for organizations to find and develop blue oceans uncontested, growing markets and avoid red oceans overdeveloped, saturated markets. Business strategy from michael porter to blue oceans to whats the problem. Recognized as one of the most iconic and impactful strategy books ever written, blue ocean strategy argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Porters model of five forces and his understanding of competitiveness still have merit in the modern business. Supports and critiques on porters competitive strategy and competitive advantage. In this article you will learn how to make your competition irrelevant and have sales and profit.
Blue oceans denote all the industries not in existence today the unknown market space, unexplored and untainted by competition. Porters five forces model and porters value chain on sony as an organization. The book the origin of the terms red and blue oceans comes from blue ocean strategy how to create uncontested market space and make the competition irrelevant. The sixforce model expands on harvard business school professor michael porters fiveforce. Although jetblue used a blue ocean strategy to achieve an initial competitive. It takesoff from the five forces model as the launchpad or lets says its on the starting line. If you can pull it off, you can own the new market. Blue ocean strategy is a marketing theory and the title of a book published in 2004 that was written by w.
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