Sustainability of Blue Ocean Concept - Coursework Example

Sustainability of Blue Ocean Concept Student Name: Course: Instructor: 14th April, 2016 Markets are a very hard to garner and maintain. For most businesses, this is one among the many challenges that need a well thought out plan to ensure that the business successfully attains its goals in line with the vision and mission statement. More often than not, businesses concentrate in fighting to earn a share of the market among many of the competitors in the industry. While this may be easy for big time players with the financial clout, the small time players may find it a little more challenging. Many a times, businesses have to curve out a niche for them in order to garner some markets. This concept is very critical since it forms a strict market that only the unique company benefits from. It can maintain this advantage only for long enough. When businesses create a niche market segment by being unique through unique products, then they are applying the blue ocean concept (Kim et al, p. 86, 2008). This paper will examine if it is possible for companies to keep jumping into the blue ocean into the red ocean. It will then look into the possibility of locking perceived competitors from joining them in the blue ocean. Red ocean concept is described as a market with the regular rules: One that has the plain rules with an equal playing field and with all the players angling to garner markets based on factors other than unique products. Here, all the businesses jostle with each other using techniques such as marketing strategies to earn a bigger share of the market. Kim and Renee (2015) are of the opinion that companies like Apple Inc. have largely been successful due to the fact that they opt to create markets for their unique products than remaining in the red ocean (Plesoianu, p. 700, 2011). The red ocean concept does not usually auger well with businesses that want to cut a niche for themselves while remaining very competitive. As things stand, Apple Inc. is one among the very profitable businesses globally. To get an insight into how the red ocean concept works against a company and if it is good to keep jumping in between the two, it is imperative that we carry out an assessment. There are various checks one needs to carry out in order to ensure that the transition between a red ocean concept into a blue ocean concept is not implemented improperly. First off, it should not be done in such a way as to confuse the creation of a new market as differentiation. Differentiation is really just one of the ways through which one can garner a new market and remain unique. However, Kim and Renee (2014) posit that more often than not, businesses that have a knack to create new markets mistake this for blue ocean concept since they are seen as pioneers in gaining these particular market segment. It does go without saying that such businesses will soon find competition and may need to continue creating new markets again and again, making the concept quite diluted. The mere fact that blue ocean concepts can never really be restricted to monopoly means that a business should actually keep shifting strategies to include moving in and out of the red ocean concept into the blue ocean concept. In essence, blue ocean markets may be restricted to one company at the start of their venture when making a unique product. With time, other companies also find the uniqueness as appealing and try to emulate the pioneering company. Gillam (200) states that Nintendo, in a bid to gain the market, created a simpler version of its game that was fun and easier to understand. While the gaming market understood this as a back-peddling move, it worked well towards creating a niche for Nintendo’s market since more people needed the simpler version of games. As such, we can conclusively state that indeed, we can switch between red ocean and blue ocean in a systematic manner that ensures the business achieves certain goals. There are times when businesses experience a market shift that may threaten the profits it rakes in within given periods. This always calls for a quick strategy that can guarantee results. Red ocean is known to be more expensive since it needs a more extensive marketing campaign to sell more than the other competitors. In short, it is expensive to stick to only red ocean concept when the market becomes challenging. Strategy (2004) places blue ocean as a key way of shifting between aggressive marketing and moving on to a more effective way of achieving markets without necessarily having to fight for it. In essence, blue ocean concept enables a business to slow down and be able to concentrate on producing unique products that do not have to be marketed aggressively and in an expensive way. Effectively, it is sufficiently correct to state that blue ocean concept reduces marketing costs and should be encouraged. After having gained a fair share of the new markets through blue ocean concept, a business will now have to guard the market jealously by discouraging other companies from emulating them. To do so, there are a string of strategies that may come in handy so that the company stays winning and within their chokehold of the market. Chan and Mauborgne (2005) contend that value innovation is a great way to keep other competitors to join the pool in the blue ocean. This means that a consistent research into innovative ways of staying relevant should be effected so much so that at every point in advancement, a new idea is injected that leaves prospective competitors lagging behind. This is effective since in the long run, a blue ocean concept that is implemented by a company is likely to attract a new wave of demand among various markets, meaning challenges keep arising every waking day. Schawbel (2014) manages to point out Wal-Mart as a very successful company that implemented the blue ocean concept in using a very common strategy, yet very few companies have been able to wade into the concept. As a huge outlet, Wal-Mart utilizes economies of scale in almost all of its branches to ensure that it sells off more goods at fairly low prices compared to its competitors. While a few outlets have tried to match it, it still holds the chokehold with the biggest share of customers. This means that in as much as blue ocean concept is great, many companies may be tempted to emulate others. How this is countered matters most. Wal-Mart managed to keep off others by maintaining the strategy of buying in bulk and selling cheap. The mere fact that the blue ocean concept kills competition is not really an issue that should allow a business to lie on its laurels and become relaxed. It is common to find businesses also taking it too far and going where they appear to wander farther than they really should. Koo et al (2008) mention that blue ocean concept needs boundaries so that a business can know when their strategies are working in tandem with the mission and vision of the company. There are risks involved with wandering far away from the realistic or allowed market segments. These may include incurring expenses that are really unnecessary, and reaching points where the market appears apathetic to the new offering a company is making. This signals that a company should stick to some acceptable level of innovation. On the flipside, sticking to some level of innovation is not really an attribute that is associated with blue ocean concept. Blue ocean concepts are by and large associated with breaking rules and moving away from boundaries. Be that as it may, it should be within realistic and acceptable levels that do not go further than the values that espouse a company’s mission and vision statements. In conclusion, the blue ocean concept is a great way of reducing competition by creating a product that has attributes that are unique. The red ocean concept has always not worked for innovative companies. Apple Inc. is seen as a great example of a company that chose to come up with innovative products in order to capture a new market. Dehkordi et al (2012) confirm that this strategy has always won over market segments that become more loyal to companies, hence creating less competition. While this is so, Nicholas (2011), declares that such strategies cannot go without disadvantages, meaning now and again, there will be challenges when implementing the blue ocean concept. Roth (2014) creates the idea that a business can move from a red ocean concept to a blue ocean concept, and then back to a red ocean concept when need be. This is due to the fact that blue ocean concept always brings about a new demand for the new products so much so that imitation is inevitable. However, to keep companies from imitating one that has chosen the blue ocean concept, it is imperative that a constant innovative approach is taken to keep the company moving forward. Even with this, there needs to a calculated approach that keeps the company playing within boundaries that do not isolate it too much. Bibliography Chan Kim, W. and Mauborgne, R., 2005. Value innovation: a leap into the blue ocean. Journal of business strategy, 26(4), pp.22-28. Dan Schawbel., 2014. W. Chan Kim: How Entrepreneurs Can Find Their Blue Oceans. Forbes. Available at http://www.forbes.com/sites/danschawbel/2014/02/14/w-chan-kim-how-entrepreneurs-can-find-their-competitive-edge/#2f500124457d [Accessed on 14th April, 2016] Dehkordi, G.J., Rezvani, S. and Behravan, N., 2012. Blue Ocean Strategy: A Study Over A Strategy Which Help The Firm To Survive From Competitive Environment. International Journal of Academic Research in Business and Social Sciences, 2(6), p.477. Kim, W.C. and Mauborgne, R., 2014. Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard Business Review Press. Kim, S., In, H.P., Baik, J., Kazman, R. and Han, K., 2008. VIRE: Sailing a blue ocean with value-innovative requirements. Software, IEEE, 25(1), pp.80-87. Gillam, D., 2009. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant [Book Review]. New Zealand Journal of Applied Business Research, 7(1), p.75. Kim, W.C. and Mauborgne, R., 2015. Red Ocean Traps. Harvard Business Review, 93(3), pp.68-73. Plesoianu, G. and Cîrstea, A.C., 2011. Organically Produced Foods-A Competitive Approach for the Twenty-First Century in Terms of Blue Ocean New Strategic Concept. Review of International Comparative Management, 12(4), pp.696-703. Roth, S., 2014. Booties, bounties, business models: a map to the next red oceans. International Journal of Entrepreneurship and Small Business, 22(4), pp.439-448. Strategy, B.O., 2004. Blue Ocean Strategy. Harvard Business Review, 82(10). Read More