At present, there is a great growth of competitors in the market, this mainly due to the abundant amount of products and services that are offered, where most of the organizations compete with each other to have a greater part of the market, some choose for implementing some aggressive strategies, known as red oceans.
However, there is even a minority of companies that have opted for the implementation of blue ocean strategies, where competition is no longer a relevant factor, but consolidation, growth and leadership.
The purpose of this article is to present the main characteristics of the Blue Ocean or Ocean Blue strategy (commonly known in the English language), which was created by the authors W. Chan Kim and Renée Mauborgne.
Keywords:
- Ocean BlueOcean BlueRed OceanStrategyCompetitive Advantage
OCEAN BLUE
Blue Ocean Strategy: Value Innovation Strategy to "Innovate, Undertake and Grow by creating new markets"
General
Let us remember the words of Michael Porter, about strategy: «The creation of a unique and valuable position for the organization, which considers a set of activities that must be related and combined, deciding even what will not be done» (Porter, 1996)
Porter raises some differences between operational effectiveness and strategy, where the requirements for the latter to represent a competitive advantage fall on the role of leaders to implement business strategies.
For this, the process of developing a strategy from the point of view of the administration will be considered in the first instance.
The process of developing and executing a strategy (Thompson, Strickland, & Gamble, nd)
With this, what is sought is to define the actions that must be taken to achieve results in each of the businesses or undertakings in which the organizations participate. What is sought is, basically, to have the ability to offer and obtain good results, we often speak of rivals, because business strategies are the result and evolution of military strategies and tactics, whose objective is to defeat the enemy. (Céspedes, 2013)
However, a rather interesting question is to know how a strategy is elaborated? For this, it will suffice to say that the general strategy of an organization is: «a collection of initiatives and strategic actions, the product of managers and employees from all over the world. organizational hierarchy »(Céspedes, 2013)
Hierarchy of the elaboration of a company's strategy (Thompson, Strickland, & Gamble, nd)
In most organizations, devising and executing a strategy is an effort that is achieved as a team, in which all managers play an important role, since it is a mistake to assume that a strategy is something that only the Board does.
As shown in Figure 2, it is often presented who is responsible for designing pieces of an overall strategy.
In companies that have different business lines, where different strategies must be controlled, the task of developing a strategy involves four levels, namely:
- Corporate strategyCommercial strategyFunctional area strategiesOperational strategies
On the other hand, it is also important to define the concept of innovation: "it is the application of new ideas, concepts, services and products, practices with the sole intention of being useful to achieve increased productivity", an essential element of innovation it is your successful application. (Céspedes, 2013)
Innovation in value (Blue Ocean Strategy)
Since the beginning of the industrial era, organizations have been immersed in great competition, fighting for competitive advantages, wars for the market, or disputes have been a common denominator in the creation of strategic plans.
Societies and organizations have been swimming in red oceans, waging struggles to survive. (ESDEN, sf)
The red oceans represent all those industries that exist today, while the blue oceans symbolize those business ideas that are currently unknown. (Chan Kim & Mauborgne, 2005)
Below is a comparative table of the main differences between one and the other.
Comparison between red ocean and blue ocean strategy (Chan Kim & Mauborgne, 2005)
In the red oceans, the limits of organizations are defined and accepted as they are, and also the rules of the game are known to all.
As more competitors appear, the possibilities of profits and growth diminish, the products are standardized to the maximum and the competition becomes more bloody (hence the red color of the ocean).
On the other hand, the blue ocean is characterized by the creation of markets in areas where all opportunities have not yet been exploited, where they are also generated with profitable and long-term growth.
To clarify this concept a little more, let's take the worldwide known example of Cirque du Soleil, which was created in Canada in 1984 by a group of actors, their presentations have reached more than 40 million people in 90 cities around the world. world get to see them.
From a first glance, few are the people who consider starting a circus as a business, in fact, it is considered a business in the doldrums since its main audience (children) today are more interested in electronic items.
From a strategic point of view, it was also considered somewhat unattractive, however, Cirque du Soleil addresses an audience of all ages, which together with the unique characteristics of each of its tours has increased demand. of this type of shows, in addition to charging rates much higher than any other circus, it is even comparable to theatrical works.
Cirque du Soleil knew how to create a blue ocean, characterized by an innovative concept made up of circus and theater, and it also expanded the market frontiers by diversifying the target audience.
(Chan Kim & Mauborgne, 2005)
Matrix of the four actions: The case of Cirque du Soleil (Chan Kim & Mauborgne, 2005)
The blue oceans arise when competition becomes irrelevant, since the rules of the game are waiting to be set, and are characterized by the creation of new markets in areas where they have not been exploited; there are blue oceans that have nothing to do with current industries, although most of the red ones arise when expanding into existing limits. (Ortiz, 2014)
Principles for developing a blue ocean strategy
Create new consumer spaces
The process of discovering and creating blue oceans is not about trying to predict industry or sector trends through a guessing exercise, nor is it about implementing new ideas that emerge from the minds of managers using the trial and error method. error.
This first principle is responsible for creating a strategy based on these characteristics in order to expand the limits of the market as they are conceived today.
Focus on the big picture, not the numbers
Instead of preparing a formal document, it turns out that it is more convenient to draw on a canvas and in the clearest way possible, the strategy that we want to implement.
However, doing it this way does not mean that you do not have to do numbers and compare all the ideas in a final document, but that will be done later, since the details are easier to specify once you have a vision. general of how we want to distance ourselves from the competition.
Go beyond existing demand
To achieve this goal, it is necessary for companies to correct two conventional strategy practices, the one that consists of how to solve the needs of current customers and the one that leads to excessive market segmentation.
To be commercially viable gure of the ocean blue
The goal is to reduce the risk that is created by implementing such a strategy. To ensure the viability of this strategy, it will be necessary to arrive at an affirmative answer to the following questions:
- Are there obstacles to transforming our current value proposition? Is the price set for the products or services within the reach of the great mass of potential customers? Is the cost structure we have viable taking into account the price objective that we have? marked? Will customers derive exceptional utility from the new business idea?
(Chan Kim & Mauborgne, 2005)
conclusion
The need to create competitive advantages today is very important, and doing it with a strategy that precisely bypasses the competition and is based on factors just as important is even better.
The Ocean Blue Strategy gives us this opportunity and also ensures that if implemented correctly it will achieve the results expected of it.
Although it is a relatively new tool and not very well known by companies, without a doubt over time it will be implemented and adapted more and more to the needs of organizations today.
Thesis topic proposal
Implementation of a Blue Ocean strategy in a SME in the region.
General objective
Analyze the feasibility and implementation of a blue ocean strategy in an organization in the Orizaba region to create a competitive advantage.
A g r adequacy
To the National Technological Institute of Mexico for being my alma mater and to Dr. Fernando Aguirre y Hernández for their support and motivation to carry out these articles on the subject of Fundamentals of Administrative Engineering.
References
- Céspedes, H. (August 26, 2013). HC Global Group. Retrieved May 2016, from http://hcglobalgroup.blogspot.mx/2013/08/blue-ocean-strategy- Estrategia-de.htmlChan Kim, W., & Mauborgne, R. (2005). The Blue Ocean Strategy: How to Develop a New Market Where Competition Doesn't Matter. Colombia: Grupo Editorial Norma.ESDEN. (sf). School of Business and Technologies. Retrieved May 2016, from Ingersoll Rand: http://www.esdenonline.com/datos/articulos/archivo11.pdfOrtiz, JL (July 15, 2014). ITESM. Retrieved May 2016, from: https://tec.mx/es/noticias/nacional/investigacion/mas-de-90-proyectos-innovadores-en-ingenieria-reciben-fondos-novusPorter, M. (1996). What is strategy? Harvard Business Review. Thompson, A., Strickland, JA, & Gamble, J. (nd). Strategic management:Theories and cases.
