Blue Ocean Strategy

In this presentation, we will introduce the concept of “Blue Ocean Strategy”, to help you understand and gain a strong foothold in online competitive market place.
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1. ( Chapter 1
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3. Objectives

After reading this chapter you will be able to:
° Understand the term “Blue Ocean”
* Know how to make a Competition Irrelevant

Know how to create Blue Oceans

¢ Familiarize with Pillars of Blue'Ocean Strategy

4. Introduction

Guy Laliberte, the Chief Executive Officer of Cirque
du Soleil

He was a famous accordion player

Laliberte and his group of street performers founded
Cirque in 1984

It became one of the Canada’s largest cultural exponent

5. Introduction

+ Huge earnings of Cirque was not made out of a

thriving industrial activity

Many adverse phenomena were confronted by Guy and

friends for the outstanding performance of Cirque

It was possible to them to make such a rapid growth
due to the supplier power on the part of the star

perform er

6. Introduction

5 MT ne,

The Ringing Brothers and Barnum and Baily famous in

circus field are competitors to Cirque

In reality, there was no such competition between

them

It was quite well meant and apt to title their first

production as “We reinvent the Circus”

7. Introduction

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° Cirque dw Soleil realized that companies should avoid

direct competition for steady growth in the future

Cirque made the noteworthy achievement as they
could envision the two market space — the red oceans

and the blue oceans

8. Introduction

[he red oceans have well defined and laid.down rules

and regulations to rein in them in a competitive field

They try to outperform each other to grab a greater

share of the market leading to overcrowding the

limited market space

On the contrary, the blue oceans. can creat demand and
thus an opportunity for highly profitable growth on

their own

9. Introduction

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The red oceans have to struggle and make their own

way outsmarting the rivals successfully so as to be in

business

The real focus has been on competition based red ocean

strategy

10. How to create Blue Oceans

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If we look back, we could see that many leading

industries of today are blue oceans in the past

The non existent blue oceans today are really existent
red oceans of tomorrow

Though the term “Blue Ocean’ is new but the existence

of such phenomenon is not new

11. ° Just as evolution of the mankind, the industry also
undergoes constant evolution resulting of mew and
modified industrial entity

+ It could be seen that the corporate strategy is heavily
influenced with military strategy

12. The End Result of creating
Blue Ocean

+ Incremental improvement of about 86% within the

existing market space

Remaining 14% of launches were for creating blue
oceans which generated 38% of total revenue entered

which yield 61% of total profit

13. The End Result of creating
Blue Ocean

° Impact of creation of Blue Oceans on Profit and
Growth

MM Launches in existing marketspace (Red Oceans)

Launches in non-existing market space (Blue Oceans)

14. Why is Creating
Blue Oceans Mandatory
MI a

+ There are many imperatives of creating blue oceans

+ The population curve shows a downward trend causing
the demand curve to take a plunge

« Total dissatisfaction of the existing industry enable
hem to come out with new and better quality prices

15. ° There are certain questions deserve the attention like

— Can a company escape from the throttling grip of red ocean

competition?

- Is there a calculated decisive and systematic approach to
achieve the blue oceans?

° The first and foremost thing is to define the basic unit

for our research analysis

16. Strategic Move

5 MT ne,

“In search of Excellence” was a best-seller published
around 20 years ago

At the same time its contemporary ‘Built to Last’ was
able to trade its stand

“Built to Last became a best seller as they could earn

the trust of readers as well as the corporate analysers

17. Strategic Move

MT ne,

For Example:

- HP was featured by Built to Last’ as
outperforming the market over a long time

- According to “Creative Destruction’ the
companies those were set to the market

leaders by ‘Built to Last’ never existed

18. Strategic Move

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+ The companies can create their own blue oceans and

shape them up into high performers

+ It was possible for Cirque de Soleil to create a new

market space of their own in entertainment sector

19. Strategic Move

+ The strategic move was required to create and

sustain excellency in performance

° Example:

= Compaq was able to take the blue ocean
strategy in creating the server industry

20. Strategic Move

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+ The products and services delivered by the strategic

moves were able to open up new and much kewarding

market space

21. Strategic Move

* Common factors that led to creation of blue oceans and
came out of the stranglehold of the red oceans were

- Victorious group of small and large companies

Managed by young and inexperienced people as well as old
and exper EEE

Low-tech and high-tech

Domestic as well'as multinational

22. The com panies caught in the red ocean followed a
conventional approach of defending themselves from

being beaten by their rivals from the stiff com petition

The logic behind creation of the blue ocean strategy

was to make the competition irrelevant

23. * Value sans innovation means improving value but not
making the firm foothold in the marker place

+ Approach of blue oceans is to provide both,

differentiation and low cost together

24. Pillars of Blue Oceans Strategy

The efforts adopted by Cirque de Soleil helped only in

rising costs and without any upward trend in revenue

earnings

It should be noticed that Cirque did the competitors

without actually taking part in the competition

25. ° It was an all-in-all way out from the circus traditions

and customs the Cirque brought out

+ The changes were both innovative and value-added and

turned out to be a real crowd Puller

26. ° Cirque also introduced hitherto non-circus factors like

a story-line, artistic music etc.

+ In many ways is kept a close resemblance to a theater

° The visual performance Was made more meaningful

and attractive

27. + Cirque introduced the concept of multiple production
to keep up the tempo of harvesting the market of
entertainment world

Cirque played a dual role of a circus and a theater

simultaneously

28. + The diagram show how the blue ocean strategy is
interrelated with the dual strategy of both innovation
and value

° Value innovation means to give more value to its buyer

as well as achievement of a leap in value by the

industry

29. Red Ocean Vs. Blue Ocean Strategy

Red Ocean Strategy Blue Ocean Strategy

30. Blue Ocean Strategy -

Formulation &Execution

+ The chances of success are bit lower when companies
venture beyond the existing market space

+ Companies have yet to make up their mind towards

the call of blue oceans

31. Principles & Risk Factors of
Blue Ocean Strategy
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The Six Principles of Blue Ocean Strategy

32. Summary

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The chapter gives you an idea of what is Blue ocean

° How the blue ocean can be created successfully

° Cirque introduced a new strategy, eliminating certain
factors which are were a hindrance to rapid growth and

giving the circus Show a mew concept

33. End of Chapter
— a

an

34. "weschool

Welingkar Education

Master's level Distance Learning Program - PGDBA

ay)

“Like” us on Facebook:
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