Blue Ocean Strategy

Blue Ocean Strategy - This part not in book Blue Ocean...

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This part not in book. Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne They contend that while most companies compete within such red oceans, this strategy is increasingly unlikely to create profitable growth in the future. Blue Ocean Strategy (BOS) is the simultaneous pursuit of differentiation and low-cost to create new market space. Blue Ocean Strategy seeks to make the competition irrelevant by creating a leap in value for both the company and its buyers. Blue Ocean Strategy aligns the following three propositions: o 1. Value proposition: The utility buyers receive from the product or service minus the price they pay for it. Is there a compelling reason for the mass of target buyers (customers and noncustomers) to purchase the new offering? Is the offering priced to attract the mass of target buyers so that they have a compelling ability to pay for it? o 2. Profit proposition: The price of the offering minus the cost of producing and distributing it. Lower cost is achieved by eliminating and reducing factors that the industry has either taken for granted (e.g., legacy factors the industry still competes on but add little value); or over delivered on. o 3. People proposition: The readiness of employees to execute the new strategy with all of their energy, to the best of their abilities, and voluntarily. Adoption hurdles can block the execution of a Blue Ocean Strategy. These
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This note was uploaded on 10/17/2011 for the course MKTG 470 taught by Professor Dr.valenti during the Spring '11 term at Nicholls State.

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Blue Ocean Strategy - This part not in book Blue Ocean...

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