Blue Ocean Strategy - Essay Example

Strategic Management Table of Contents Introduction 3 Definition of Blue Ocean Strategy 4 History of Blue Ocean Strategy 5 Relevance of Blue Ocean Strategy 8 Conclusion 10 References 11 Introduction The perception of strategic management is fundamentally described as a set of effective administrative decisions as well as activities that accumulatively tends to support an organisation by determining its long-run performances towards the accomplishment of its desired goals (Chaneta, n.d.). It has been apparently observed in this regard that the management team of most of the organisations prioritise developing strategies for the purpose of attaining their predetermined business targets (Sadler, 2003). In doing so, concept of strategic management have become increasingly versatile and multidimensional with the incorporation of various theories and models. One of such theoretical concerns of contemporary strategic management can be identified as the Blue Ocean Strategy. This particular managerial concept is often regarded as one of the imperative concepts or models in the study of strategic management that particularly emphasises upon certain major aspects which can ultimately benefit different organisations in terms of earning greater profits along with forming superior business advancements (Mathys, 2008). In this paper, the definition of the concept, i.e. Blue Ocean Strategy and its history of evolution in the contemporary era will be taken into concern. Moreover, the relevance of the concept concerning today’s business challenges will also be discussed in this paper. Definition of Blue Ocean Strategy The notion of Blue Ocean Strategy is fundamentally defined as an effective managerial decision making framework that constitutes different business organisations with the intention of enhancing their profitability and accomplishing superior competitive position over its chief business market competitors. This particular concept emphasises upon several important factors that encompass generating uncontested space for business exposure, avoiding fierce competition through dominance or with the creation of immaterial competitive environment, capturing as well as creating new demands and targeting new customers rather than solely focusing on the existing ones (Layton, 2009). It has been apparently observed in this regard that contemporary organisations have been experiencing extreme market competitions and have been seeking greater competencies towards maintaining sustainable growth along with attaining a superior competitive position. In this similar context, the organisations desire to employ the Blue Ocean Strategy with the motive of satisfying their expected business targets. Contextually, one of the imperative aspects considered in this particular strategic framework is value innovation. Stating precisely, value innovation is often regarded as the cornerstone of this concept. This is fundamentally owing to the reason that the notion of value innovation focuses principally upon making the market competition immaterial by generating increased value for the buyers as well as the organisations that ultimately opens new as well as uncontested space of business market. In simple words, this particular concept assists organisation to obtain dominance within its industrial context and thereby overcome the negative influences of fierce competition (Kim & Mauborgne, 2012a). Moreover, the facet of value innovation within the circumstance of Blue Ocean Strategy reveals that an organisation needs to remain much committed towards generating greater value to the customers by providing them with the required products or services at a comparatively lower price. This particular strategic concern ultimately supports the organisations to enhance their sustainability, profitability along with productivity and most importantly attain substantial competitive position over its major market contenders (Koontz & Weihrich, 2010). History of Blue Ocean Strategy The conception of Blue Ocean Strategy was coined in a book based on business strategy with the title “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant”, written by Renee Mauborgne and W. Chan Kim in the year 2005. Blue Ocean Strategy evolved rapidly since it was evolved where today, most of the contemporary large-sized organisations can be observed to follow this notion in order to obtain long-run competitive advantages. It is worth mentioning in this context that the organisations in this modern day context strongly believe that by focusing upon the well-defined features of the concept, they can attain their expected business targets and can successfully compete with their major contenders in the global context. The perception of Blue Ocean Strategy generally evolved with the underlying principle of creating new space for business enterprises in the increasingly fierce competitive environment (Kim & Mauborgne, 2005). It has been apparently observed in this context that the rapid evolution of the concept has been fundamentally due to its different principles that impose extensive impacts upon the financial growth as well as the productivity of the organisations. In this similar concern, the different principles of the concept comprise reconstructing uncontested market boundaries, emphasising upon a bigger picture i.e. quality rather than quantity and attaining ahead of existing demand. Furthermore, the other principles of the concept include mitigating chief organisational hurdles, making executions in the strategic concerns and availing correct strategic sequence towards the accomplishment of the desired outcomes. Therefore, organisations might follow the aforementioned principles while executing the concept on various business situations (Kim & Mauborgne, 2012b). Contextually, on the basis of its affirmations and notions, it can be critically observed that this particular concept of Blue Ocean Strategy is quite likely to be much favourable to those organisations which intend to create demand for the different products and/or services in the business market instead of attaining greater share from the existing demand of products or services by directly getting involved in the competition. Another important factor for such rapidly evolvement of the Blue Ocean Strategy concept has been its broader execution by most of the contemporary organisations such as Apple Inc. In this regard, it has been viewed that the modern day organisations broadly executes the concept with the motive of making the business market competition uncontested or irrelevant and thus generating greater profitability and sustainable growth practices (Kim & Mauborgne, 2012b). Relevance of Blue Ocean Strategy After acquiring a brief idea about the concept of Blue Ocean Strategy, it can be stated that it is quite relevant in today’s contemporary business environment. This can be advocated with reference to the evidences revealing broad execution of the approach by most of the modern business organisations. In this context, in accordance with the underlying principles of the concept, it has been viewed that the modern business organisations as well as the different industries have to face significant challenges in preserving their superior business performances which in fundamentally due to the prevailing competition within the challenging market spaces. In this regard, the concept generally emphasises upon creating as well as competing particularly in the market spaces wherein the competition is meagre with the intention of obtaining better growth opportunities and dominance over the industry structure. The other factor that signifies the relevance of the concept to today’s business environment is the continuously increasing and incessantly changing market demand prospects. The concept has been identified to focus more upon creating demand for the products and/or services in the new business market. This perception ultimately reveals that with the purpose of generating more wealth as well as possessing greater payoff possibilities, the organisations need to create and consequently detain demand for the offered commodities in relatively untouched business markets (Kim & Mauborgne, 2004). The prime objective considered in the concept of Blue Ocean Strategy is to generate new business markets by developing the business competition to be uncontested or immaterial instead of out-performing the business competition in the existing business market or industry which is often examined as one of the most crucial challenges witnessed by modern day organizations. This particular objective of the concept ultimately exhibits the relevance of the concept to today’s business challenges. Additionally, the conception of Blue Ocean Strategy broadly encompasses two important aspects that need to be adopted as well as implemented by different business organisations in order to create demand for the offered products and/or services in the new business markets generating superior profitability and sustainable growth. These aspects majorly include the notion of differentiation strategies and cost-leadership strategies offering low-cost products to the customers with due emphasis on obtaining customer satisfaction. From the standpoint of the concept, the organisations can attain greater value towards their large base of customers by adopting as well as utilising the significant strategies of differentiation and delivering low-cost products. Most importantly, it has been viewed that one of the imperative facets of the concept is that it abandons the fundamental principle of conventional business strategy which relates with the facet of trade-offs subsisting between value and cost (Boyer & Verma, 2009). Hence, it can be stated that the concept of Blue Ocean Strategy is relevant to deal with the contemporary business challenges frequently faced by today’s organisations. Conclusion The perception of strategic management plays a critical role in the development of the organisations. Notably, since its evolution, it has gained immense importance in the modern day business context. This is owing to the reason that it supports the different organisations to attain their predetermined business targets by offering effective long-term planning methods and significant business strategies. Moreover, it assists the organisations while making effective decisions that ultimately results in enhancing their profitability along with productivity with the accomplishment superior competitive position over its chief business market contenders. In this similar context, one of the imperative concepts or models in the field of strategic management has been recognised as the Blue Ocean Strategy. This particular concept intends to support the modern day organisations towards generating greater profits as well as incessant market growth by enhancing its overall performances. These factors majorly include creating uncontested space of business markets as well as new demands for the offered products and simultaneously making the market competition immaterial. Thus, it can be concluded that the concept is relevant for contemporary organisations to face today’s business challenges as it focuses upon adopting and implementing the strategic moves of differentiation policies and offering low-cost products to the customers, i.e. the two most important aims of business enterprises in the 21st century context. References Boyer, K. K. & Verma, R., 2009. Operations and Supply Chain Management for the 21st Century. United States of America: Cengage Learning. Chaneta, I., No Date. Strategic Management Process. Journal of Comprehensive Research, Vol. 5, pp. 17-25. Kim, W. C. & Mauborgne, R., 2004. Blue Ocean Strategy. Harvard Business Review, pp. 1-9. Kim, W. C. & Mauborgne, R., 2005. How to Create Uncontested Market Space and Make the Competition Irrelevant. United States of America: Harvard Business Review Press. Kim & Mauborgne., 2012a. About BOS. [online] Blue Ocean Strategy. Available at: [Accessed 2 February 2013]. Kim & Mauborgne., 2012b. Ten Key Points about BOS. [online] Blue Ocean Strategy. Available at: [Accessed 2 February 2013]. Koontz, H. & Weihrich, H., 2010. Essentials of Management 8E. New Delhi: Tata McGraw-Hill Education. Layton, S., 2009. Blue Ocean Strategy Book Summary and Review. [online] Blue Ocean Strategic Planning. Available at: [Accessed 2 February 2013]. Mathys, L., 2008. Innovation and Blue Oceans: What is the Link? [online] Bluecrest Consulting. Available at: [Accessed 2 February 2013]. Sadler, P., 2003. Strategic Management. Great Britain: Kogan Page Publishers. Read More