Download it once and read it on your kindle device, pc, phones or tablets. Conceptualizing business model innovation in a framework of four specific actions w. Competitive advantage through business model innovation bcg. Chan kim and renee mauborgne and is the cornerstone of marketcreating strategy. Using business model innovation to create new paths to growth. Importance of the blue ocean strategy to a business. Value innovation is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company. Furthermore the blue ocean strategy was awarded with. Business models, business strategy and innovation david j. Pdf harvard business school press blue ocean strategy rajeh. A blue ocean strategy adopts the belief that markets and industries are not structured to beget competition. Blue ocean strategy can be applied across sectors or businesses. In this article, we will look at 1 what is a blue ocean strategy.
This paper is an attempt to highlight how business model innovation can be a disruptive force in any industry which can shake the roots of a wellestablished firm by using a case study on airbnb. This framework is very innovative, as its principles challenge the conventional business strategy principles of fighting competitors headon. A blue ocean, as used in the title of this book and strategy, is basically uncharted territory in the business world. Blue ocean strategy business model blue ocean tools and. Its time to dispel the myth that innovation must be disruptive. Business model innovation is about increasing the success of an organization with existing products and technologies.
The key theme in this article is that when businesses are faced with a choice of battling competition in saturated markets or creating an entirely new market. Blue ocean strategy and new business models in the food industry. For example, competing factors in blue ocean strategy are similar to the definition of finite and infinite dimensions in funky business. Business model innovation is probably the most challenging of the innovation types as it will likely present an organization with major requirements for change. Teece whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. Strategyzer aspires to create a whole new generation of business tools that change the way organizations do strategy and innovation. Blue ocean strategy including examples and pdf download. The logic behind blue ocean strategy is counterintuitive. Blue ocean strategy and new business models in the food. The authors researched the impact of innovative ideas on traditional industries and studied cases from companies such as tesla motors and starbucks, creating a most attractive model of innovation that allows you to rethink. Looking at entire industries in this way allows you to tell over time whether an innovation strategy or a competitive strategy is best. By defining and seeing examples of the blue ocean strategy, your organization can learn how to execute on this strategic planning. Business model innovation and digital strategy fourweekmba. Pdf business model canvas innovation and blue ocean strategy.
Blue ocean challenges companies to push the boundaries of their industries and offer consumers something unique of immense value. Of course, the blueocean approach to this model would call. As mauborgne2005 said, the capacity of an enterprise to move into the blue ocean could be described as the business success. Opinions expressed by forbes contributors are their own. Summary of the first four chapters of the international bestseller blue ocean strategy. Blue ocean strategy and its implications for businesses. This allows them to build a viable business model and ensure that a company profits from the blue ocean it is creating.
Blue ocean strategy this is the name given to a technique for exploring innovation space originally developed by two professors at the business school insead. How to create uncontested market space and make the competition irrelevant kindle edition by kim, w. Made by group d of the minor global trendwatching 2015. Companies need to build their blue ocean strategy in the sequence of buyer utility, price, cost, and adoption. How to create uncontested market space and make the competition irrelevant. The concept of blue ocean strategy first took the business world by storm in 2005 when authors w. Value innovation strategy competes in an uncontested market space. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. Pdf on jan 1, 2017, robi awaluddin and others published business model canvas innovation and blue ocean strategy for efishery find.
Disruption occurs when an innovation creates a new market and business model that cause established players to fall. Blue ocean strategy is a growth strategy framework focused on the idea of creating an uncontested market spacei. Blue oceans seldom result from technological innovation. Pdf business model canvas innovation and blue ocean. This blog article is a overview of some of the key points of the book by w. This paper reports the results of more than a decade. Product and service innovation are essential, but business model innovation can deliver more lasting competitive advantage, particularly in disruptive times. Blue ocean strategy is a consistent pattern of strategic thinking. The best way to understand value innovation is to consider value and innovation separately. Within the current business market, the companies are always involved in fierce competition, due to the development of technology and globalization. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy, expanded edition.
Because value to buyers comes from the offerings utility minus its price. Blue ocean strategy is a new way of thinking, a new strategic mindset, a bold new path to winning the future. Analyzes not only winning business players that created blue. What is the blue ocean strategy the term blue ocean was coined by two professors w. What determines whether blue ocean strategy is a innovation or generation analytical tool highly depends on the sequence that is used. Pdf blue ocean strategy and new business models in the. Blue ocean strategy is a creative way to innovate your strategy and in turn to innovate the business model.
Chan kim and renee mauborgne wrote a bestselling book, blue ocean strategy, which has been translated into 43 languages. Blue ocean strategy is ideal for consumer products. Yet, the business model canvas is just the beginning. Learn the concepts of tipping point leadership and fair process that ensure effective execution of blue ocean strategy.
The insead blue ocean strategy institute is dedicated to extending the research on blue ocean shift, blue ocean strategy, and blue ocean leadership by chan kim and renee mauborgne and disseminating it to professors, researchers and practitioners around the globe. Blue ocean strategy is based on the idea that every enterprise can achieve higher profit by creating new demand in noncompetitive market so called blue ocean. Value innovation is distinctively different from the competitive strategic approach that takes an industry structure as given and seeks to build a. Munich personal repec archive the concept of ideal strategy and its realization using white ocean mixed strategy.
Disruptive innovation and blue ocean strategy trustedpeer. Blue ocean strategy is referred to a market for a product where there is no competition or very less competition. Aim of this dissertation is to investigate whether eataly, the largest wine and food marketplace of the world, entered a blue ocean via business model innovation. In this article you will learn how to make your competition irrelevant and have sales and profit. Its a methodology that helps companies identify highpotential areas for innovation that competitors have yet to discover. The cornerstone of blue ocean strategy what consistently. Pdf on jan 1, 2017, robi awaluddin and others published business model canvas innovation and blue ocean strategy for efishery find, read and cite all the research you need on researchgate. Often, the very capabilities or processes that have been optimized to make a company successful and profitable will become the targets for transformation. Companies need to build their blue ocean strategy in the sequence of buyer utility. In executing a blue ocean strategy, how can a company overcome various organizational hurdles and build trust and commitment among people who work for or with the company. Blue ocean strategy is a book published in 2005 and written by w.
Chan kim and renee mauborgne in their book titled blue ocean strategy. Nondisruptive creation is an alternative path to growth. Blue ocean strategy is a method of creating business strategy of the enterprise, which was described in a book by w. A new framework of blue ocean strategy for innovation. In recent years disruption has become the battle cry of business. Blue ocean is a slang term for the uncontested market space for an unknown industry or innovation. Blue ocean strategy value innovation strategy canvas four actions. The blue ocean strategy book has been sold over 3,5 million times, was published in 43 languages and is a bestseller across five continents. This article explains what the blue ocean strategy is and how it can become a game changer for businesses stuck in stagnating markets.
In the past 50 years, the average business model lifespan has fallen from about 15 years to less than five. Blue ocean strategy, organizational performance, red ocean strategy, value. The blue ocean strategy explains how to guide your business across seas with less competition and greater profitability. Its a methodology that helps companies identify highpotential areas for. Amazon innovates with its business model, not drones wired. Blue ocean strategy pursues value innovation in their analysis of strategic moves over 120 years, the authors found a consistent pattern to successful blue ocean strategies. Achieved via the delivery of features that have a highest marginal benefit to customer needs. We are excited to share this knowledge with you and highlight some best practices. This is a focus on generating additional demand rather than improving or increasing supply through value innovation. By defining and seeing examples of the blue ocean strategy, your organization can learn how to execute on this strategic planning model and successfully reconstruct your market. This article uses examples from the real world to discuss the specifics of the blue ocean strategy. Strategy canvas understanding your business model customer relationship 5 key partners 6 key resources 7 costs 9 key activities 2 customers 3 channels 4 revenue 8 value provided to customers 1 strategy canvas understanding your business model. Business model innovation decision making solutions.
It takes its name form the metaphor of a sea in which many sharks are circling, competing with each other and occasionally thrashing around fighting over food creating a swirling. Use features like bookmarks, note taking and highlighting while reading blue ocean strategy. The circus business was and still is in longterm decline. Survive and further develop the company seems to be harder than before. Pdf blue ocean strategy as a tool for improving a companys. Subsequently, after an overview of the main dynamics of competition. Just as blue ocean strategy claims that a red ocean strategy does not guarantee success, funky business explained that competitive strategy is the route to nowhere. By crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. Blue ocean strategy will provide managers and entrepreneurs with a number of tools, approaches and models to support lateral and creative thinking, to create decisionmaking, to support and to systematize strategic innovation and to help moving towards the blue ocean.
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