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PRODUCT RANGE	FUNCTIONS PER MACHINE	PRICE	TURNAROUND TIME	EXPECTED PRODUCT LIFE	SOFTWARE BUILT IN	SIMPLICITY FOR USER	PRODUCT SIZE

LOW

HIGH

Blue Ocean strategy

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston, Mass: Harvard Business School Press.

OFFERING LEVEL

COMPETING FACTORS

Company A

Company B

Company C

“Blue ocean strategy” is a term created in 2005. The idea behind it is for companies to avoid head-to-head competition in the overdeveloped, saturated and bloodied red oceans (the known market space); instead, they should focus on finding and developing unexplored industries and markets in the blue oceans. This strategy makes the concept of competition irrelevant; companies should therefore have more success, less risk, and increase their profits.

Examples abound: Cirque du Soleil and the wine brand Yellow Tail is used a lot in their book; also consider how iTunes entered the music industry too; Nintendo is another – specifically how they positioned the Wii product.

In the example on slide one, a B2B manufacturing company (Company C - the blue line) is launching a new range of machines. It’s looking to keep the range low intentionally, so it can keep its costs (and the price) lower than the competition, which is hell-bent on offering a very wide range of products. Whilst its competitor Company B (yellow) has decided not to compete on product life, Company A (green) has a good reputation on this. Company C has looked to enter a blue ocean by introducing new elements (built in software, user interface simplicity and a tiny machine footprint) - these are extensions to the ‘canvas’.

Slide 1 is rendered purely in PowerPoint; slide 2 uses Excel, which some people may prefer (easier to plot the lines and dots).

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston, Mass: Harvard Business School Press.

2 of 2

LOW

HIGH

Blue Ocean strategy

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston, Mass: Harvard Business School Press.

OFFERING LEVEL

COMPETING FACTORS

Slide 1 is rendered purely in PowerPoint; slide 2 uses Excel, which some people may prefer (easier to plot the lines and dots).

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston, Mass: Harvard Business School Press.