Blue Ocean Strategy

In the high competitive market, it is hard to maintain and sustain success. With the new entrants firms face to lose their shares and profits. That is why companies try to find new ways to make profit. To reach their aims, in business space there are two different strategies which are red ocean strategy and blue ocean strategy.
Red ocean strategy refers that there is an existence known market, and all the rules of market known. Each market has boundaries in that strategy. Companies compete to take share existing demand. However, blue ocean strategy refers an unknown market space that there is no demand for it, and no competition. In those markets, there is a huge opportunity to make profit and grow. Companies implement blue ocean strategy in two ways. One method to implement is creating a nonexistent market and demand for it, such as eBay. Another method is changing the boundaries of Red Ocean, such as Ford did in the first quarter of the 1900s. It is believed that blue ocean strategy will lead the growth in the future. In today’s economy, supplies exceed demands. So, commoditization of products and services is unavoidable. Moreover, price wars and decreased margin profits are other problems. Companies could overcome those problems with the blue ocean strategy. However, they should understand some key issues about it. Firstly, it is not about innovate technology. Of course it goes with the innovation, but by taking advantage from it. Secondly, companies create blue nonexistent markets with their core values. Thirdly, it should not be focused on companies or industries while making evaluations. The success of a company or industry differs over the time. Lastly, successful blue ocean strategy creates brands to last years. In additional to these issues, it has characteristic features that distinguish it from others. The most important one is it rejects the trade-off between value and cost relationship. Fortunate companies apply differentiation and low cost to their...