Red ocean and blue ocean strategy, collaborative and competitive Strategy

xRed ocean and blue ocean strategy, collaborative and competitive Strategyx

1. I. Red Ocean Strategy and Blue Ocean Strategy

a) Red Ocean Strategy
In the red oceans, industry boundaries are defined and accepted, and the competitive
rules of the game are known. As the market space of red oceans gets crowded, prospects
for profits and growth are reduced. Products become commodities, and cutthroat
competition turns the red ocean bloody. Therefore it becomes used term of “red
oceans”.
Red ocean strategy
requires essential approach to
beating competitors, where
the conditions supply that
exceeds demand in most
companies, competes in
reaching a contracting market
share must be done but the
company’s performance will
not be adequate.

b) Blue ocean Strategy
Blue ocean strategy is a theoretical framework of strategy that guides business
organizations to create new market space through reconstructing industry boundaries.
It uses the terms “red oceans” and “blue ocean” to describe in existence today. Blue
ocean strategy takes a reconstructionist view of strategy, which is built on the theory of
endogenous growth. Besides that, which focuses in the intrinsic characteristic of actors
behind innovations that induce structural change.
Blue ocean strategy aims at breaking the trade‐off between value and cost
through cognitive reconstruction of market elements across industry boundaries. On the
basis of a reconstructionist view of strategy, blue ocean strategy argues that industry
structure can be changed endogenously by the strategic actions of micro‐level actors.
This, in turn, requires the alignment of the value, profit, and people propositions of a
strategy in support of pursuing both differentiation and low cost.

2. II. Competitive and Collaborative Strategy

a) Defining Competitive Strategies
A firm’s competitive strategy concerns how to compete in the business areas the firm
operates. In other words, competitive strategy means to define how the firm intends to
create and maintain a competitive advantage with respect to competitors. A business
area identifies: (a) a distinct set of products or services sold to a uniform set of customers;
and (b) a well defined set of competitors to be faced.
The definition of competitive strategy itself addresses the underlying dynamic of the
issue. Competitive advantages are created as the result of direct actions of the firm
(proactive strategies) or as result of the reaction of the firm to external change (reactive
strategies). Consequently, competitors react trying to erode the advantage.

b) Collaborative strategies
From a theoretical perspective, most studies of collaboration are limited to "the process of
collaboration, its stages, or its success components. Few studies discuss the actual [plan]
outcomes ... ”(Turcotte & Pasquero, 2001: 448). Clarke and Fuller (2011) detailed six types
of outcomes which have been written about in the collaboration literature: plan-centric,
process-centric, partner-centric, outside-stakeholder centric, person-centric, and
environmental-centric (meaning context related).
Hence It can be said that, Colllaborative Strategy is the synergy between the strategy
of a Business and the Strategy of its partners to realise the objectives through collaboration.
This concept is being evolved as the new way to grow a Business. Companies collaborate
with their partners, vendors and customers to build synergy at strategic level to grow their
business