Summary: Blue Ocean Strategy: From Theory To Practice A3Mcm

Read the summary and the most important questions on Blue Ocean Strategy: From Theory to Practice A3MCM

• 1 Introduction

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• What is the causal flow proposed by industrial organisation economics from market structure to conduct and performance? Also referred to as what by academics?

  Market structure (created by supplier and demand) shapes the conduct of sellers' and buyers' which then establishes (determines) end performance. Structuralist view - environmental determinism.

• Where does the 'blue ocean' idea/concept come from?

  The structuralist view leads to a main focus on protection against a companies' competition. Here organisations focus on the strategy of their competition. According to the authors this is not the best strategy, therefore they came up with the blue ocean strategy.

• 2 Blue Oceans

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• What does the strategy in the 'red oceans' look like? Red coming from the metaphor of bloody.

  Competitive rules have been formed and abided by for the past 25 years, companies try to outperform their competition and take a larger share of existing demand.

• What does the blue ocean market environment look like?

  It is 'untapped market space', where there is no competition because there are no rules for the market yet. The opportunities of creating demand and for profitable growth are endless (like a blue, deep and unexplored ocean).

• What does the reconstructionist view of strategy, as discussed in the article, mean?

  The beliefs that 'market boundaries and industry structure are not given' and can be reestablished by those in the blue ocean market.

• What is the difference between the reconstructionist view and the red ocean strategy?

  Red ocean strategy focuses on the fact that an industry's structural conditions are a fact and that organisations must act and compete within them, the reconstructionist view follows the exact opposite.

• Name the forces that are making the creation of blue oceans necessary;

  1. The advances in technology which has improved industrial productivity and allowed suppliers to produce an enormous arrangement of products and services (globalisation is an element in this);
     
  2. Based on 1, products and services are commoditised, price wars expand and profit margins decrease (people start selecting on prices as there is so much choice).

• What is a common characteristic of a blue ocean?

  Competition is not used as a benchmark (standard/basis).

• How does the blue ocean strategy lead to the expansion of existing markets, and create new ones?

  By focussing and energising the demand side of the economy.

• How is a leap of in value for organisations and consumers created through a blue oceans strategy?

  Lowering costs and at the same time driving value up for consumers.