"Blue ocean strategy" book report. Business & Marketing Essay

“Blue Ocean Strategy” Book Report
Student’s Name
Institutional Affiliation
“Blue Ocean Strategy” Book Report
W. Chan Kim and Renee Mauborgne are the authors of the book Blue Ocean Strategy. Both writers elucidate how companies can succeed and control the market by eliminating wrangles related to competition and supremacy in the text. Arguably, most organizations find themselves in heated battles trying to win customers’ hearts through various marketing incentives. Some of these incentives include discounts on commonly used commodities and customer loyalty awards. Research suggests that most companies engage in competition because of the desire to achieve sustainable and profitable growth (Kim & Mauborgne, 2005).
However, in doing so, most organizations end up being involved in a “red ocean.” Amazon, eBay, and Alibaba are relevant illustrations of the significance of making the competition irrelevant. Besides, Kim and Mauborgne (2005) posit that Cirque du Soleil is a perfect example of why it is essential to make competition irrelevant. Cirque du Soleil is arguably Canada’s largest cultural export. Instead of competing with other companies in Canada, Cirque du Soleil created uncontested new market space, making the precedent competition irrelevant. Blue ocean refers to the strategy to create and explore new markets, which is ideal for eliminating unhealthy business rivalry. Creating new markets is imperative for companies since it leads to profitable growth and conquering of new markets.
Value innovation is one of the foundations of the blue ocean. Entrepreneurs need to consider value and innovation as two separate entities. Researchers postulate that value innovation leads to a higher value for customers and lowers costs for organizations. Kim and Mauborgne (2005) illustrate three different ways of creating blue oceans. Canvas is the first strategy. The strategy makes it possible to make a distinction on the criteria the competitors will be using. The strategy helps in evaluating the importance of each criterion. Kim and Mauborgne (2005) assert that a strong resemblance of the curve drawn between all the competitors is a factor that characterizes a red ocean. Similarly, a company creating a blue ocean has its curve. The focus of the idea is on alternatives rather than rivals, non-clients, than customers.
The second concept is the four actions framework. The basis of this concept is on four critical questions:
* Which of the factors that the industry takes for granted should be eliminated?
* Which factors should be reduced well below the industry’s standard?
* Which factors should be raised well above the industry’s standard?
* Which factors should be created that the industry has never offered?
The basis of the third concept is on eliminate-reduce-raise-create-grid. After answering the four questions stated earlier, it is vital to determine the actions that should occur.
Kim and Mauborgne (2017) assert that a good strategy ought to have three features:
1.Focus: the company must concentrate on its objective.
2.Divergence: the company must differ from its traditional sector
3.Compell...