Blue ocean strategy ( IPL example )
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Transcript of Blue ocean strategy ( IPL example )
Blue Ocean Strategy
By : Rohit, Kanika, Pulkit, Sidharth, Ashwin
What is Blue Ocean Strategy?
It argue that companies can succeed not by battling competitors, but rather by creating “blue oceans” of uncontested market space.
It unlocks new demand.
It creates leap in value for the company, its buyers and it’s employees.
Part 1 : Value Innovation
The simultaneous pursuit of differentiation & low cost.
It is the alignment of innovation with utility, price & cost position. This creates uncontested market space & makes competition irrelevant.
E.g. “Nano Car” is adopted combination of differentiation & low cost. It is the outcome of combining value innovation & playing a different game.
Part-2 : 4 Principles1.Reconstruct market boundaries.
2.Focus on the big picture, not the numbers.
3.Reach beyond existing demand.
4.Get the strategic sequence right.
Part-3 : IMPLEMENTATION PRINCIPLES
1.Overcome key organizational hurdles
a)Cognitive b)Resource c)Motivational d)Political
2. Build execution into strategy
Red Ocean Strategy v/s Blue Ocean StrategyRED OCEAN STRATEGY BLUE OCEAN STRATEGY
Compete in existing market space. Create uncontested market space.
Beat the competition. Make the competition irrelevant.
Exploit existing demand. Create & capture new demand.
Make the value cost trade - off Break the value cost trade - off
Fight to win. Win without fighting.
Example 1 IRON MAN
STARK company used to produce weapons for U.S.
army but it created a new market place by giving birth
to IRON MAN.
Thus, making the competition irrelevant.
Example 2 : CASHEWS I am currently running business of dry fruits.
If I sell 10 tons of cashew with 5 more shops
doing the same thing. Then, I can choose for
1ton of roasted & salted cashew especially with
liquor. Thus, creating & capturing new demand.
Example3 : IPLEarlier, we used to have O.D.I’s & Test match as the only
format of cricket. But it was very boring.
So, Lalit Modi introduced IPL which proved to be an
entertainment bomb.
Thus, creating uncontested market space.
Conclusion
It is the strategic move neither the company nor industry that creates “Blue Ocean” and sustains high performance.
The Blue Ocean Strategy tries to align innovation with utility, price & cost positions.
The book suggests that both differentiation & lower costs are achievable simultaneously.