Godina izdanja: Ostalo
ISBN: Ostalo
Jezik: Engleski
Oblast: Marketing
Autor: Strani

K035
Summary.
Despite a long-term decline in the circus industry, Cirque du Soleil profitably increased revenue 22-fold over the last 10 years by reinventing the circus. Rather than competing within the confines of the existing industry or trying to steal customers from rivals, Cirque developed uncontested market space that made the competition irrelevant.

Cirque created what the authors call a blue ocean, a previously unknown market space. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In red oceans—that is, in all the industries already existing—companies compete by grabbing for a greater share of limited demand. As the market space gets more crowded, prospects for profits and growth decline. Products turn into commodities, and increasing competition turns the water bloody.

There are two ways to create blue oceans. One is to launch completely new industries, as eBay did with online auctions. But it’s much more common for a blue ocean to be created from within a red ocean when a company expands the boundaries of an existing industry.

In studying more than 150 blue ocean creations in over 30 industries, the authors observed that the traditional units of strategic analysis—company and industry—are of limited use in explaining how and why blue oceans are created. The most appropriate unit of analysis is the strategic move, the set of managerial actions and decisions involved in making a major market-creating business offering.

Creating blue oceans builds brands. So powerful is blue ocean strategy, in fact, that a blue ocean strategic move can create brand equity that lasts for decades.
from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution from understanding the need to break from status quo, finding the resources to implement the new strategic shift, keeping your people committed to implementing the new strategy, and from overcoming the powerful vested interests that may block the change.[6][7]
Proposition
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In the book the authors draw the attention of their readers towards the correlation of success stories across industries and the formulation of strategies that provide a solid base to create unconventional success – a strategy termed as `blue ocean strategy`. Unlike the `red ocean strategy`, the conventional approach to business of beating competition derived from the military organization, the `blue ocean strategy` tries to align innovation with utility, price and cost positions. The book mocks the phenomena of conventional choice between product/service differentiation and lower cost, but rather suggests that both differentiation and lower costs are achievable simultaneously.

The authors ask readers `What is the best unit of analysis of profitable growth? Company? Industry?` – a fundamental question without which any strategy for profitable growth is not worthwhile. The authors justify with original and practical ideas that neither the company nor the industry is the best unit of analysis of profitable growth; rather it is the strategic move that creates `blue ocean` and sustained high performance. The book examines the experience of companies in areas as diverse as watches, wine, cement, computers, automobiles, textiles, coffee makers, airlines, retailers, and even the circus, to answer this fundamental question and builds upon the argument about `value innovation` being the cornerstone of a blue ocean strategy. Value innovation is necessarily the alignment of innovation with utility, price and cost positions. This creates uncontested market space and makes competition irrelevant. The new chapters in the expanded edition of the book deal with the issues of how to develop and align the three strategy propositions of value, profit and people, how to sustain and renew blue ocean strategy at both the business level and the corporate level, and how to avoid red ocean traps that keep organizations anchored in existing market space even as they attempt to create new market space.