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Pages:
3 pages/≈825 words
Sources:
3 Sources
Level:
MLA
Subject:
Business & Marketing
Type:
Research Paper
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 15.55
Topic:

Blue Ocean Strategy (Research Paper Sample)

Instructions:

The paper is a brief exposition of the 'blue ocean strategy' which is a concept by Kim and Mauborgne aimed at helping business entities to survive and remain profitable in a highly competitive business environment. according to the strategy, Organizations must strive to beat their competitors and thrive in their areas of specialization by creating limitless and unrivaled commercial possibilities for themselves. the possibilities are what kim and mauborgne refer to as 'blue oceans'.

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Content:

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Blue Ocean Strategy
Introduction
The modern business world is highly competitive. New products, services, technological advances, enterprises, and entrepreneurial ideas emerge continually. Therefore, firms are under immense pressure to attract more customers, capture the most significant market shares, and generate high sales and revenues. Rising operational costs and shrinking profit margins are some of the difficulties facing corporates endeavor to outdo their rivals. Given this background, Kim and Mauborgne present the blue ocean concept as a transformative model of executing business and a solution to the challenges ensuing from stiff competition in the corporate setting. 
Blue Ocean Strategy
Organizations must strive to beat their competitors and thrive in their areas of specialization. They can realize this goal by creating limitless and unrivaled commercial possibilities for themselves. Speaking metaphorically, Kim and Mauborgne call these opportunities “uncontested market spaces or blue oceans” and contrast them with current organizational realities or what they call “red oceans.” The authors claim that “blue oceans” can help firms to leave an atmosphere riddled with intense rivalry and enter less competitive markets, where they can acquire more customers and become increasingly profitable (Kim and Mauborgne). Hence, the need for “blue oceans” continues to grow as business entities encounter fierce industrial wars.
           “Blue oceans” are crucial for various reasons. For instance, they satisfy the demand for imaginative mechanisms of doing business that add value affordably (Kim and Mauborgne). Additionally, the Internet and social networking sites allow firms to make their products and services known to and reviewed by a worldwide audience (Kim and Mauborgne). Moreover, emerging economies, such as China, Brazil, and India, are presently more promising “blue oceans” than developed regions, such as North America and Europe, in consumer demand and market share growth (Kim and Mauborgne). Furthermore, the growing numbers of Chinese, Indian, and Latin American companies prove how quickly and easily new entrants can become international players and compete with other multinationals (Kim and Mauborgne). Consequently, if they wish to remain relevant, organizations cannot overlook the significance of having a global presence.
           Several principles guide businesses as they devise “blue oceans.” Corporations should “think outside the box” and go beyond market limitations (Alhaddi 2). Next, enterprises must undertake strategy mapping as they envision the larger picture of moving away from industrial competition rather than investing in growing their industry shares and cutting costs (Betz 13). Moreover, firms should tap into underserved or unserved customer groups instead of confining themselves to the current demand (Betz 17). In addition, they must determine product or service usefulness to buyers, set the appropriate prices, maintain profitable operating margins, and remove impediments to realizing their business objectives (Alhaddi 4). In other words, they must design their blue ocean methodology in the correct order.
           Similarly, enacting the blue ocean model entails following specific guidelines. Kim and Mauborgne assert that companies must overcome major internal obstacles, such as employees needing a mindset shift, resource shortages, low staff morale, and politics. Additionally, organizations should get their members to accept and actualize the strategy voluntarily rather than forcefully. Furthermore, they must match their commitments to value creation, profit-generation, and people-orientation (employees, partners, and customers). Moreover, enterprises should continually find new “blue oceans” to counter the risk of imitation. Ultimately, they must avoid being trapped in their industries’ competition cycle.
Differences Between the Blue Ocean Strategy and Most Companies’ Approaches
The blue ocean approach differs from most firms’ operation strategies, whereby competition informs most businesses’ strategic planning (Alhaddi 5). They concentrate on outdoing their rivals’ activities. In contrast, the blue ocean tactic turns companies’ attention to value innovation, which refers to finding unexploited market niches by offering customers innovative, value-added, and distinctive products and services (Kim and Mauborgne). Thus, it renders competition unimportant as a strategic focal point.
The other distinction revolves around perceptions of industry structure. Corporations run with a fixed view of the organization of their sectors (Betz 33). Resultantly, they develop equally inflexible programs based on such analyses as SWOT or Five Forces (Alhaddi 6). Contrastingly, the blue ocean modus operandi suggests that industries are flexible rather than rigid (Kim and Mauborgne). Therefore, companies can deliberately shape an industrial composition to favor them when pursuing new markets.
Another difference lies in opinions about strategic innovation. Organizations have traditionally deemed such ingenuity incomprehensible and arbitrary (Alhaddi 7). Consequently, they have limited themselves to stable markets. Contrarily, developing “blue oceans” involves methodologically connecting creativity to value. It also means redefining industry restrictions to optimize entrepreneurial chances while reducing risks (Kim and Mauborgne). Hence, the blue ocean framework enables the disruption of industries by systematically a

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