A PRACTICAL APPROACH TO BLUE OCEAN STRATEGY - PART 1 (INTRODUCTION)

INTRODUCTION

Blue Ocean Strategy can be described as a planned sequence of events or processes designed to create uncontested markets and make the competition irrelevant.  This is done by encouraging companies to break out of the current market space which they described as the red ocean and instead of further segmenting prevailing market segments to concentrate on desegmentation of the market place and grow the demand creating what they refer to as a blue ocean. Though this notion is not entirely new, this is the only approach that provides a logical and scientific sequence of events that can be replicated leading to the establishment of uncontested markets each time this sequence is applied in the appropriate order. 

The corner stone of blue ocean strategy is VALUE INNOVATION. Value Innovation refers to increasing the value of a product while simultaneously reducing the price.

Blue ocean strategy is also unique as opposed to other business strategies as it provides guidelines for both strategy formulation and implementation. Most other trainings or business strategies on innovation provide only guideline for  strategy formulation or innovation. Hence apart from Value Innovation the other components of the blue ocean strategy are Tipping Point Leadership and Fair process.

W. Chan Kim and Renee Mauborgne stated that there are six principles to abide by in achieving the blue ocean strategy with the first four principle enabling value innovation and the last two ensuring it is adequately implemented with the processes of tipping point leadership and fair process.

As with other more conventional red ocean strategies which make use of analytical tools like SWOT Analysis, Porters Five forces e.t.c. Blue ocean strategy also possesses a set of analytical tools which are applied to unlock the blue ocean i.e. an uncontested market space. These tools are highlighted in the figure below.

The purpose of this series is to apply the blue ocean strategy to Polo Ralph Lauren T Shirts to help them break out of the red ocean and create a new market space. We did this by making use of the Blue Ocean analytical tools and frameworks following the principles of the Blue Ocean Strategy.

The series would be in eight parts including the introduction as shown in the figure below and would deal primarily with strategy formulation and not implementation. 

 So join me as we unlock the blue ocean, creating an uncontested market space for Polo Ralph Lauren T-Shirts.

Look out for Part II in which we begin the practical application of blue ocean strategy beginning with the use of the PMS (Pioneer, migrator and settler) Map.