blue-ocean-strategy.pptVIP

BLUE OCEAN STRATEGY October 2004 BLUE OCEAN STRATEGY Competing in overcrowded industries is no way to sustain high performance. The real opportunity is to create BLUE OCEANS of uncontested market space Cirque du Soleil Founded in 1984 by street performers Stages productions seen by 40 million people in 90 cities around the world Cirque du Soleil has achieved in 20 years time what Ringling Bros. And Barnum Bailey – the world’s leading circus – more than 100 years to attain Circus Industry Negatives When CDS was founded the circus industry was in decline (and is still declining) Other forms of entertainment was available (sports, TV, videos) Animal rights issues High priced Circus star performers Ringling and Barnum’s name a barrier to entry (more than 200 years combined) CdS’ Blue Ocean Strategy Revealing Tagline : “We Reinvent the Circus” CdS did not make money by competing within the confines of an existing industry CDS did not steal from Ringling or Barnum CdS created uncontested market space that made the competition irrelevant RESULT : CdS increased revenues by a factor of 22 over the last 10 years BLUE OCEAN vs. RED OCEAN Red Oceans represent all the industries in existence today – the known market space Red Oceans’ industries boundaries are defined and accepted Red Ocean’s competitive rules are well understood What’s it like in a Red Ocean? Companies try to outperform rivals in order to grab greater share of existing demand Space gets more crowded Prospects for profits and growth reduced Products turn into commodities Increasing competition turns water bloody What is the BLUE OCEAN? Blue oceans denote all industries NOT in existence today The Unknown market space Untainted by competition In Blue Oceans, demand is created not fought over In Blue Oceans, growth is profitable and rapid 2 ways to create Blue Oceans Companies can give rise to complete new industries, example : Ebay with the online auction industry Created WITHIN a Red Ocean when a company alter