This book brings the best of those articles together all in one place. The concept of blue ocean is based on the idea that the business universe is made up. The research focused on discovering the common factors that lead to the creation of blue oceans and the key differences that separate those winners from the mere survivors and those adrift in the red ocean. To support this, we have developed air solution products. 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. The evolution of blue ocean strategy ims engineering college. Impact of blue ocean strategy on organizational performance. In this way, it swam into a blue ocean, offering a plastic watch at a price that allowed people to purchase two or three watches at one time. Blue ocean strategy formulation the four principles of strategy formation click here to read this article. The seminal book blue ocean strategy has sold over 3. Using blue ocean strategy to reduce new product failure. This paper uses the blue ocean strategy, proposed by kim and mauborgne, to analyze the bandit cellphone. He is known as coauthor of the 2005 book 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. Put simply the blue ocean strategy is innovating in ways which make your competition irrelevant. Critically evaluate the blue ocean strategy in reference to l. 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. This post defines blue ocean strategy and explores a few examples while pointing out the five main risks of pivoting in the search for a rich blue sea without competitors. Applying blue ocean strategy to digital marketing smart. In january 2006, the company launched its blue ocean management campaign to be one among the top 3 electronics, information and telecommunications firms in the world by 2010. Samsung electronics value innovation conceptual chart cost reduceeliminate unnecessary functions buyer value improve and create functions value.
Lg has adopted the regional distribution model in india. Lge had more than 72,000 employees working in about 77 subsidiaries and marketing units across the world. The blue ocean strategy a company is not only top management, nor is it only middle management. The blue ocean strategy bos is the strategic organizational approach that is based on the principle that companies should not engage in a. Chan kim born 1952 is a koreanborn business theorist, professors of strategy and management at insead, and codirector of the insead blue ocean strategy institute in fontainebleau, france. Blue ocean strategy is a difficult concept to apply in practice. The blue ocean strategy as a method for developing sustainable profitable frameworks implies the fundamental idea of developing new innovational markets with a majority of new customers. This was a blue ocean opportunity staring them in the face. The case study examines in detail the causes for the break up of the kinetic honda joint venture. Blue ocean strategy including examples and pdf download.
Case study sovannasuos lg implemented the blue ocean strategy through new. A company is everyone from the top to the front lines. The blue ocean strategy teaching note reference no. This blog article is a overview of some of the key points of the book by w. Bcg matrix lg electronics star lgs television question mark lgs computers cash cow lgs white goods dogs lgs mobiles bcg matrix 17. This article uses examples from the real world to discuss the specifics of the blue ocean strategy. This article explains the blue ocean strategy, developed by w. Bos0010a1 this teaching note was written by pinal shah and vara vasanthi under the direction of amy sonpal, icfai business school research centre, ahmedabad. To create a blue ocean strategy, organizations must be committed to value innovation. First, the brief history of the company would be discussed following with the report on the global consumer electronics market and the industry dynamics. Most prominently, since 2009 the malaysian government has implemented a national blue ocean strategy to lift the living standard of the country and to. Case study sovannasuos zaman university business strategy mis 411. Instead of dividing up existingand often shrinkingdemand and benchmarking competitors, blue ocean strategy is about growing demand and breaking. Innovation, new market space and creating demand are central characteristics.
The premise of the book is that companies can succeed by creating. Extreme openness is another blue ocean technique that buffer uses on their open blog. It reduced costs by using plastic instead of metal, for example, and reducing the parts in each watch from 150 to 50. The structure can be created or recreated by the steps taken by players in the market. 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 key theme in this article is that when businesses are faced with a choice of battling competition in saturated markets or creating an entirely new. They represent businesses that may not be around today, or werent around until they came on to the scene. Pdf impact of blue ocean strategy on organizational. Lge was a technology innovator in electronics, information and communications businesses producing cdma handsets, dvd players, optical storage devices, canister vacuum cleaners, air conditioners and micro ovens. He had been appointed as the president of lg electronics in china in 2006 and was unveil. It requires the right research, patience and focus. All the distributors work directly with the company. The fundamental premise of the blue ocean strategy is that as opposed to continuing to compete in the red ocean, you should try to find new space in which to sell your goods and services. Lg electronics is focused on developing new innovations across business.
It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. Very few businesses reach the transparency level that buffer openly embraces. Blue ocean strategy case study service nsw 3 1 introduction blue ocean strategy1 has been used extensively to transform the public sector around the world at a local, state and national level. Blue ocean strategy insead school katharina niciejewska dimitar. But lge was primarily known for its lowcost appliances, and faced challenges related to the companys image, low profitability and stiff competition across the world.
The blue ocean strategy is a reconstructionist view of the market where no accepted boundaries or structure is present. Click here to download the blue ocean strategy summary pdf. India lg entered into india in 1993 indian government barriers to entry launched lgil lge india ltd. Lg electronics has achieved a big market share for washing machines and has shipped 10 million washing machines in 2008, said mr young ha lee, president of lg digital appliance company and announced its business strategies for achieving the top positions globally in this category with sales of 7 billion usd by 2012. This article explains what the blue ocean strategy is and how it can become a game changer for businesses stuck in stagnating markets. Kim and renee mauborgne, blue ocean strategy suggests an organisation should look to create a new demand in an uncontested market space. Blue ocean strategy blue ocean management is a creative new style of management which opens new markets and invents new methods and systems that will maximize the efficiency of management. Lge was primarily known for its lowcost appliances had more than 72,000 employees working in about 77 subsidiaries and marketing units across the world. What is blue ocean strategy about blue ocean strategy. Those who want to create a blue ocean strategy for their company must focus on value innovation that makes the competition irrelevant by the simultaneous pursuit of differentiation and low cost, thus creating a leap in value for the customers and an uncontested market space for the company.
Blue ocean strategy is applied to create a blue ocean to chinese 3g operators. The current company emerged from a merger between lakhui and goldstar, the initials of which are represented by the l and g used today. Since, dividing up existing demand and benchmarking the competitors, blue ocean strategy is regarding grow demand and break away from the competition. To support this, we have developed unique and stateoftheart business products. Different marketing strategies used by lg electronics. It is only an illustrative orchestration of this case study.
Then, the blue ocean strategy would be critically analysed stating and highlighting its differences with the red ocean strategy, which. We offer a wide range of products, including information displays, digital signage for advertising, commercial system. This case lg electronics, the blue ocean strategy focus on lg electronics, inc. Application of blue ocean strategy to chinese 3g mobile. This international bestselling book sold more than a million copies in its first year of publication, and has. Discover lg business, commercial solutions lg global.
I have recently been reading up on the rise and huge success of netflix and how they used the blue ocean strategy to change the rules of the game. Blue ocean strategy is a book published in 2005 and written by w. Blue ocean strategy and its implications for businesses. Us, electronics and communications engineering philips, lg electronics. After reading you will understand the basics of this powerful strategy tool what is the blue ocean strategy. Blue ocean strategy makes companies to come out of ocean of bloody competition by creating market space which is uncontested and that makes the completion irrelevant. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. We also use importanceperformance analysis as a supplementary to blue ocean strategy to show what the operators should do at the present. Nam woo, president of lg electronics lg, was collecting his thoughts after the press conference in beijing. Reviewing the blue ocean strategy universiteit twente. It was built on the notion of creating new markets where competition is irrelevant and the opportunity to grow and be profitable is unlimited. The case also throws light on the post breakup strategies of the. The on the blue ocean strategy essay 1969 words 8 pages.
How to create uncontested market space and make the competition irrelevant, a book by professors w. Value innovation strategy competes in an uncontested market space. Essay about blue ocean strategy 825 words bartleby. Blue ocean strategy and sustainability for strategic. Blue ocean strategy is a landmark idea founded by w.
Blue ocean strategy is when an organization breaks away from the conventional approach to facilitate the creation of new uncontested market space thereby making competition irrelevant. We are committed to providing commercial electronic products that help businesses perform better. Keywords blue oceans, value innovation, four action framework, strategy canvas. These blue ocean success stories exemplify the creation of new markets by reducing and. The ideas that shaped a century and its companies anju singh faculty of management studies, gurukul kangri university, haridwar, uttarakhand, india. In a blue ocean because of the uniqueness of your offering you are able to service your customers in uncontested at least for now space. Blue ocean strategy summary click here to read this article. In the same year, the company also acquired zenith electronic corporation. In this article you will learn how to make your competition irrelevant and have sales and profit growth in excess of anything you thought was even possible. In 1995, the company changed its name to lg electronics and embarked on its journey to become the worlds leading company. Blue ocean strategy is based on over decadelong study of more than 150 strategic moves spanning more than 30 industries over 100 years. In other words, this is a management strategy for a whole new paradigm in which we will compete in the areas that we have to, while developing a blue ocean. Bos0010a this case was written by pinal shah under the direction of joel sarosh thadamalla, ibscdc. The buffer blog has exposed a blue ocean strategy by harnessing acumen for research and compiling data.
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