Blue Ocean Versus Red Ocean

Lourdesamy Iruthayasamy ()

Chapter Chapter 6 in Understanding Business Strategy, 2021, pp 93-114 from Springer

Abstract: Abstract This Chapter presents and analyses the precepts and principles of blue ocean strategy (BOS) as championed by Kim and Mauborgne. BOS is the newest strategy model to be added to the strategy literature, with its own theory on strategy formulation and implementation. The chapter discusses what BOS is, how it differs from the other strategy approaches, does it offer any unique solutions to business problems, or is it just a passing fad. These issues are critically examined. The basic tenet of BOS is to avoid competition (red ocean) or make competition irrelevant. To be profitable, businesses need to find uncontested market space (blue ocean). Uncontested market space is found through value creation. BOS provides the analytical frameworks and tools to create value for the customer and the firm. The chapter includes discussion of specific BOS concepts like strategy canvas, value curve, value innovation and the four action framework. The eight principles for strategy formulation and implementation are also covered. Finally and importantly, the chapter raises the question: What is the contribution of BOS to strategic thinking and practice? Is it a new paradigm or just fluff? The claims of BOS are critically assessed for validity and its limitations pointed out. The major challenges that BOS has to contend with are identified and discussed. The chapter concludes by asserting that BOS is fine, provided it is not peddled as the solution to business strategy making.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-33-6542-1_6

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DOI: 10.1007/978-981-33-6542-1_6

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