Blue Ocean Strategy Theory and Criticism

Outline the main components of Kim and Mauborgnes (2004) concept of grungy nautical scheme. Critically assess the strengths and limitations of this approach to pursuing rivalrous advantage. map relevant ex deeps to support your argument. Introduction In the contemporary hostile business enterprise environment, inception has become part of any companys preponderant dodging for continuous survival. Nokia, despite world the worlds largest bustling phone manufacturer having a large customer base, realized how overlook of entry to compete against rivals high end smart phones threatened its grocery presence.Kim and Mauborgnes (2004) dark-skinned maritime Strategy is one of the major contri stillions in that context. Accordingly, this essay examines the downcast Ocean Strategy concept in the sideline order First, the theory is explained with a real-life example. Secondly we look at some of its limitations. Thirdly, a critical appraisal of why this approach is better or wo rse off than former(a) competing and harbor innovation theories is presented and finally the de bournination is drawn. gritty Ocean Strategy TheoryAccording to Kim and Mauborgne (2004) the business initiation consists of two distinct kinds of space redness and low-spirited Oceans. Red Oceansargon the known market space where manufacture boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of the market. As the market space gets crowded, prospects for profits and addition are reduced. Products become commodities, and cutthroat rival turns the ocean bloody and hence, the termred ocean.Blue oceans, in contrast, refer to all the industries not in existence todaythe unknown market space, untainted by competition. The plaza of Blue Oceans is value innovation where demand is renderd kinda than fought over. There is ample opport unit of measurementy for rapid maturement and p rofits. In Blue Ocean, competition is tangential because the rules of the game are waiting to be set. In contrast to Red Ocean which emphasizes either on cost or differentiation system, Blue Ocean suggests it is possible to attain both simultaneously. Pursuing this strategy is able to create high barriers to entry.There are two ways to create blue oceans one is to give rise to completely impudently industries and the other is by changing the boundary of an existing industry. One of the classic examples of Blue Ocean strategy was tracks invention of Model T back in 1908. At that time the automobile industry in US was sodding(a) (Red Ocean) with 500 depressed car companies manufacturing few expensive cars for the rich citizens only. Ford redefined the industry by the introduction of Model T car which was more(prenominal)(prenominal) robust, affordable and had less maintenance cost.With high demand and standardization in its harvest-feast it was able to attain both differenti ation and low cost. therefore instead of entering and competing on the same level Ford do the competition irrelevant by tapping into a whole new market or Blue Ocean within the existing industry. Limitations Some of the Blue Ocean Strategy limitation suggested by Bowman (2008) includes the cost associated with failed projects and innovations, the ambiguity in the industry definition and the methodology carried out for the theory. Other Strategy Theories and ApproachesCompetitive Strategy Forces Porters five crowds collecting competition as the main issue that business out to be addressing is in direct contrast to Blue Oceans view of value innovation and creating new market. A recent research in the retail market by Barke (2010) suggests that Porters view of increased substantial leading to lower profitability is in fact true but it does not go down alarmingly as suggested but sooner a pedestrian force. Also Blue Ocean innovation in an existing market can last for 15 days befo re it to go down to a basic level (Barke, 2010).What that gist is that the profit gains from innovation, in an existing market, are a lot more than previously supposed. Disruptive Innovation Kim and Mauborgne (2004) failed to identify the difficulty in surveying Blue Ocean strategy particularly for the open up firms. Christensen and Overdorf (2004) spotted this issue in their disruptive innovation ideal which bears similarity with Blue Ocean in that new markets can be created with the existing industry and continual innovation is needed for survival. Broadly defining, it is a strategy which disturbs the trajectory f an industry it is heading to, instead of trying to deviate the whole industry and does so by targeting the so called non-consumers. Christensen argues that established firms strength in resources, process, and values culture can often lead to rigidity to change and adapt to threats or explore new markets. Easy jets incremental growth and rise in dominance against ot her airlines such as British Airways is a perfect example. British Airways tried to change its business model and copy Easy Jets low cost strategy but miserably failed due to its different value.Christensen and Overdorf (2000) highlight this issue some the dangers of quickly imitating by established firms and instead urges new organizational structure, attainment means to tackle the issue. They further go on to say that small disruptive startups will always have an added advantage over established firms due to less stress in managing resources and in CEOs quick intuitive decisions. Their theory, thus, provide a whole new linear perspective in Blue Ocean Strategy model. Experience Innovation and Co-Creation of valuatePrahalad (2004) argues that that today, customers want to be involved more and more in the drudgery experience or become co-creators instead of the dominant logic of companies that decides which product to manufacture and sell as suggested by Blue Ocean strategy and other theories. According to him, this dominant logic fails to recognize threats, get done opportunities, growth and innovation. He suggests value is created through experience of consuming the product rather than only measured by product, service or operation (Prahalad, 2004 173).This is what terms as experience innovation that can be created through a paradigm known as DART (Dialogue, Access and Choice, essay Assessment and Transpercy). Starbucks is a good example here where people scantily dont go to drink coffee but rather to experience of the coffee shop culture. Trends in Japanese Management plot Blue Ocean Strategy emphasizes on finding a new market for competitive advantage, Clegg and Kono (2002) asserts that one of the rise of Japanese companies such as Hitachi and Toshiba was developing strategic alliances and co operation with other companies (Clegg and Kono, 2002 278). merely dissimilarity in Blue Ocean strategy includes Hamel and Prahalad (1989) advantage of being a follower rather than a leader which enables companies to have a strategic intent or a long term pile of winning and beating the biggest in the business such as law sought to beat Xerox and ultimately matching global unit market share. Conclusion The competitive perspective suggests that companies should pay close guardianship to their existing markets when looking for opportunities for innovation that competition is a much weaker force in terms of eroding the benefits from innovation.Disruptive innovation highlights the obstacles faced by firms in pursuing Blue Ocean but rightly urges firms to adopt this strategy for survival. With the current IT phenomena the experience innovations holistic view of measuring value through consumer is a new breadth of caller air that should be included and be a part of Blue Ocean Strategy. Lastly, the trends in Japanese Management indicates that other successful strategy theories must also be considered alongside Blue Ocean as part of c ompanies broader business plan to remain competitive.