The Blue Ocean Strategy (BOS) is as a result of about ten years research of over 150 strategic moves that have been seen in over 30 nations in over a century of business dealings. BOS describes the situation where businesses simultaneously pursue differentiation in dealings and low cost processes.
The goal of this is usually not to outsmart competitors of the existing industry but rather to create new market space which is in this context referred to as the ‘Blue Ocean’. This way, the competing businesses are rendered irrelevant. BOS provides a number of methodologies and instruments that help in creating these new market spaces.
Whereas innovation is often looked at as a random and experimental process in which investors or managers and spin-offs are the main drivers. This BOS provides a systematic and reproducible method and process that can be used to pursue innovation by both new and existing firms.
The frameworks and tools used in this game are very simple and include developing value curves, use of the six paths, greater understanding and interpretation of buyer experience cycle, four actions framework, use of the grid known as strategy canvas, employing the buyer utility map and the blue ocean idea index.
Critical Appraisal
BOSS is a unique game and the students loved it and they worked as a team to manage a fictitious firm for a number of years. They loved the way they were presented with strategies to swim out of the red ocean that is filled with dangerous sharks to the blue ocean (Kim & Mauborgne, 2005, p. 47).
The theories behind this simulation game and the tools provided a strategy to break away from competitors and then develop new market space ‘a blue ocean’ for their own firm as a result escape competition.
The tool was fun to use and highly effective in learning, practicing and experiencing the market position. The game offers deeper under understanding of the blue ocean theory and actual connection of theory and practice. The competition that the team put up inspired excitement and enthusiasm among the students.
The members were made ready and were willing to lead the blue ocean strategies in other companies. Before embarking on the actual projects, it is proper to study BOSS since it has very good functional team in company specific strategies (Kim & Mauborgne, 2005, p. 47).
The students loved the game and their attitude was inspired mainly by the fast pace and hands on experience which lead to creation of intense energy and this is what made the students keen and eager to develop their skills and apply them freely. The game is fun to play and also inspire hard work and in real business environment, this combination is irresistible.
The ocean is teemed with opportunities as there are different species of animals and the environment there is very attractive and peaceful. There are thousands of real life species to be discovered ranging from the giant whales to the sea lion.
This game is very interesting in that the players are given that real feel of exploring the beautiful ocean with good and wide ranging opportunities. The adventure takes place in the mind as the students play and offered relaxation and enjoyment.
However at some points, the players have to escape from or resist and calm down attacking sharks which are also exploring shipwrecks or looking for treasure in the sea. The creatures are designed to fully immerse the players it to the ocean.
Nonetheless, the simulation teaches survival tactic and it has a full range of instruction material and allow players to monitor the team’s progress and control it highlighting main learning points and repeating them again and again (Niciejewska & Dimitrov, 2008, p. 75). The BOSS is very simple to administer and the indirect competiveness offers total flexibility that can apply t several team and allow BOSS to work what any number of teammates.
The strategy here is based on the symbolism in the game design. The terms red and blue have been used strategically to describe the marketplace in the business world. The read ocean described all the existing industries on the market today and the competitive rules of the game are explicit.
The red oceans round, the boundaries if the industry are identified, described and accepted. The firms that outsmart others here in the same industry are able to grab a bigger share of the market and they become dominant to meet the demand of their clients (Niciejewska & Dimitrov, 2008, p. 75).
As the existing market spaces continue getting overcrowded, they translate into reduced prospects for profits; opportunities for the business expansion also decline. Products become commodities and the competition has heightened to a cut throat level and this is symbolic as in, the competition can be described as Red Ocean for being bloody (Niciejewska & Dimitrov, 2008, p. 75). This is why the term red ocean is applied here.
As players and students, were are determined to move out of this red ocean because it’s filled with ‘sharks’. By playing in the red ocean round, we get familiarized with the simulation environment or the real industry and market condition we managed fictitious consumers for years. This helped to show that it is very difficult for the fictitious companies to obtain netter results in the environment that is filled with attacks or threats from ‘sharks’.
On the contrary to what red ocean has to offer, the blue ocean is a representation of all the industries and markets that are not in existence in the world currently. Simply put, the blue oceans represent the unknown market space that has not been exploited by competition.
In the blue oceans, the business strives to create demand rather than fight over the existing demand (Niciejewska & Dimitrov, 2008, p. 75). There is therefore ample opportunity to grow faster and more profitably. The blue ocean round is played to help students to attain the BOS learning and they did this in four rounds. We learnt that in the blue oceans, business have space to explore their capacities as there is not or less competition having been rendered irrelevant.
This is because the rules of the game are not yet set or known many businesses like in the case of the red ocean. The rule are still being developed as the business grows therefore anything that affects the business at that moment is waiting to be set.
The blue ocean simulation offers an analogy of the wider and greater potential that new market space yet to be exploited intensively offers. Just like in life situation, blue oceans waters are vast, deeper and powerful therefore they are many possibilities of trying out something different and totally unique as there are many resources. This is likened to this BOS in business particularly in terms of potential for profitability of the investment, growth strategy of the business and infinite opportunities.
The four rounds have pedagogical goals that will be discussed in the preceding paragraphs. We learnt that the strategies to survive in the red and blue ocean differ tremendously. To sustain themselves, the red ocean strategic concentrate on creating advantages over competitors, normally by assessment of the competitors’ tactics and struggling to emulate them and even do better (Kim & Mauborgne, 2005, p. 48).
The main goal is to grab a bigger share of the finite market. This is described as the zero-sum game where if one company gains some space in the market, then it directly translates to another one losing the space. Companies here concentrate on sharing the red ocean and the growth is restrained. Strategic thinking in this context helps managers to divide the industry into two types of businesses, those which are very attractive and the unattractive ones. This is what can determine their decision to or not to enter the market (Kim & Mauborgne, 2005, p. 49).
The blue oceans managers realize that there are no boundaries to the industry and in there were any; they are in their minds only. The existing market structures do not restrict their thinking or creativity in the industry. For them, there is always an extra demand in the marketplace that is widely unexploited.
As Students with ambition to enter the corporate world, were highly motivated that there is possibility that there are a lot untapped market space out there. The root of the problem is simply the way the new product or new market on new bleu ocean is developed by an ambitious business.
This therefore calls for a shift of attention the supply to the demand or to shift focus from the competitors to innovativeness to develop or create new demands (Kim & Mauborgne, 2008a, p. 2). This is what the game teaches them be able to pursue low cost and differentiation.
The blue ocean offers both attractive and unattractive opportunities in the new business industry for businesses to explore. The success of a firm in any type of product that it chooses to venture in has its level of attractiveness is based in the creativity of the company in that industry and so is its failure.
The company can alter this by its own meticulous efforts. The market structure can be altered by breaking the value or cast tradeoff and this are the rules of playing in this ocean and this also renders the completion in the old red ocean irrelevant. By creating new demand, it expands and as such, the economy improves by the resultant creation of new wealth (Kim & Mauborgne, 2008a, p. 2). This tactic can therefore allow a company to basically play a non- zero sum game that has very high payoff possibilities.
Team Dynamics
We clearly understood from the beginning that the simulation game was designed to build important skills in the corporate world. Leadership, decision making, motivation and team member contribution and management of the team collective efforts are the main issues that were addressed.
The team members chose me to be the team leader and I decided that I would be that team leader would encourage member participation and collective decision making. This means that the groups work would be done with one common goal even when the members are focusing on different tasks. This would make each of them accountable and happy when we achieve the required results. Without wasting much time, we went straight to our responsibilities.
Since many of us had not had an experience of playing this game, I was forced to take a risk against my inclination that only me and a member who understood the game would lead others and give them assignments. This was a way of offering strong direction to the group at the beginning.
However, it was very easy to understand how we were supposed to go about playing the game and each member had already understood their roles. Gradually, I allowed them to be decision makers in the group. This means as a group leader I was only to play the role of a coordinator rather that director. Autonomous participation resulted in great improvements in the game and I realized that they had become very enthused by the experience. I believe my leadership style had helped to make this group work a success.
As a leader, I realized that I was supposed to be able to understand the group’s situation to enable me give direction. I was very flexible to change and welcomed suggestion and opinions from members essentially leadership is all about behavior and especially communicative behavior.
At the start I had to veto some decisions and suggestion members gave but I thought were immaterial because they still did not have that actual feel of the game. Nonetheless, later I gladly accepted their thought and decisions and even supporting them because they had grown to become very sensible with regard to the educational objective of the game.
Having a good connection with the group allowed me to be a better leader and it is this kind of bonding that also helped the group in conflict resolution. My source of power or influence was legitimate power because the members chose me to lead them and any leader needs to be influential in order to lead others.
The motivation we had for out group was instant appraisal for good contribution to the group works and the satisfaction we attained by realizing that we had achieve the intended pedagogical objectives of the task.
There is no group that lacks conflict because that would mean the group is not communicating, it’s not effective, it does not have goals and it is undermining the essence of group works. The failure to express conflict in a group is called groupthink and this is dangerous to problem solving.
However, it is important to properly manage conflict because to do that can cause even more dire consequences. We experienced substantive conflict where members disagreed greatly over the ideas, issues and principles that we had based out group on and the way we were conducting our assignment. However, we were fast to use the conflict to our benefit having learnt from previous lessons.
I allowed members to freely express their disagreement since denying them that chance would jeopardize out work and kill the genuine process of decision making which is to ensure all members are heard, consequently the problems solving ability of the group would not be tested and the group would be denied some of what could be very crucial information.
Our disagreements were based on reasoning and evidence instead of mere insinuations and emotions and the reaction of group members to disagreements were made with spirit of inquest and not attacks.
Our style of conflict management was solution-oriented. This strategy was assertive and cooperative in that the members who disagreed were put together to try and reach a compromise with me taking the mediator role. The solution tried to accommodate many of their thoughts and opinions as much as possible.
The principles of negotiation, collaboration and compromise were evident in the process. This made the approach very appropriate thought it took a little longer. The solutions obtained were long-lasting because they accommodated the strong opinion from members and also brought some compromise to a satisfactory level, what is called a win-win situation. Each member gave up something and also got something in return.
Marketing Theory
The team made numerous decision that were basically about research and development to develop new products on new demand as in the blue ocean strategy, improved marketing strategies, and pricing abs sales to fight for a space in the red ocean (Kim & Mauborgne, 2004, p. 78).
The team also suggested upgrading by reduction and/or raising competitive factor. In reality, there are no new clients but only the existing ones who can be manipulated. Just as studies show that clients are price-conscious, the strategy to swim out of the red ocean to blue ocean would mean to develop products that are cheaper and of superior quality. Market research and marketing theory have found out that customers often ‘want more for less’.
Peer Group Discussion
The red and blue oceans have always existed and they are here to stay. The true situation on the market therefore requires that companies understand the strategic logic of these two ocean types (Kim & Mauborgne, 2004, p. 78). Currently, nonetheless, the competing businesses in red oceans are numerous across industries and business both theoretically and practically.
Part of the reason could be that it has a history related to war where companies can define their territories based on the way they are able to defeat the opponents in a limited and defined area. This focus of being competitive and defeating competitors in the existing market has been infuriated by dramatic rise of the Japanese from the 1970s. after being faced with increasing competition on the international market for virtually the first time in history, clients started to desert western product for Japanese products.
This set out strategic resolution based on competition. I think this is what totally defines the red ocean and in the current world CEO across the planet have remained focused on it because they are familiar with the rules of the game and feel well prepared to compete.
The blue ocean I believe is well designed to for creativity and capturing of new markets as methodical and actionable as possible just as there are fighting strategies to capture greater market share in the red oceans. despite the fact that the blue ocean strategists have existed since along ago, they have mainly been less sensible of their potential (Kim & Mauborgne, 2004, p. 78). The blue ocean strategy hence searches for solution to this by discovering the patterns and principles of developing Blue Ocean and also set analytical frameworks and tools to enable the business managers to act once they perceive these ideas.
The blue ocean is becoming very important in today’s economy because the established markets are overcrowded yet they are shrinking again. There have been phenomenal technological success stories that have considerably improved the production of different firms allowing supplier to produce excess range of products.
The trade barriers between nations have been reduced because of the free trade policies around the world. Businesses are able to easily access important information for competition. For instance, information regarding a number of products or brand in a particular industry and their prices is readily available in research journals and the internet across the globe the diversity has seen and monopolies disappear. Simply put, the supplies are overtaking demand and the situation is even faster characterized by price wars.
We can’t rule out that the red ocean is no longer useful because it remains very important for a business to swim successfully by defeating opponents. The red ocean still matters and remains a factor to reckon in business.
However, with supply exceeding demand in a number of industries, competition for market share is restricted. Although necessary, Red Ocean will not be sufficient enough to sustain a business in the high performing environment.
Companies have to look beyond competition. To seize new market space for greater profits and growth and expansion opportunities firms need to apply moves to help them swim to blue oceans. There has to be a good balance between the red and the blue ocean.
A good example of the blue ocean strategy is the invention of the I-pod. Essentially this gadget was created out of an idea and not because of the market situation. This is one of a kind type of product that is not replicated. Applying blue ocean strategy is an ingenious idea where the creator or inventor has the right over that product and the producer has enough market for it (Kim & Mauborgne, 2004, p. 79).
Basically most firms that attempted this often failed because it is very difficult for people to understand the idea of a new concept. I think the I-pod must have been very successful because it was solely because of the fact that the CEO was very innovative in spearheading Apple to success by exploiting the digital media. He created a need and a product to satisfy that need. Steve Jacobs, the Apple CEO had a track record of great success and I feel if it were that he was just coming up with a new company from nowhere trying to sell the I-phone, it would have been very difficult to capital on the success of the new product.
Self Evaluation
The unique aspects I learnt from the Blue Ocean strategy are several. The first fact is that the strategy is based on three major conceptual ideas; value innovation good leadership and superior processes (Kim & Mauborgne, 2008b, p. 2).
These frameworks and tools to be used in the game are specifically and purposefully designed to be visual. This makes them this clear so that they can be used to build the collective wisdom of the group as everyone can easily identify them. at the same time, these tools offer an efficient strategy to success to be executed via proper communication (Kim & Mauborgne, 2008a, p. 2).
I also learnt that for an integrated approach to business strategy like the one applied in Blue Ocean strategy, an organization or a company is required to develop and align the three major concepts of strategy implementation; the value of products, the profit and the people.
The BOS has also taught me that even though it’s good to compete as in Red Ocean, success would not come only by trying to outperform business rivals in the existing marketplaces. However, greater achievement could be attained by creating new markets or blue oceans and therefore rendering competition irrelevant. The BOS is postulated under the famous reconstructionist theory and under this, it is the success strategy a company applies that shapes the kind of business structure it would have.
The issue of marketing is supposed to be a continuous process and one that is full of innovation. This is what leads to development of new products. Unfortunately, this is not usually the case in reality. The idea of innovation and creativity seem to be endangered in certain industries. I learnt that the blue ocean strategy offer a way of leaping out of competition. The process on marketing should eliminate the factors that tie a business to B2B strategy (Kim & Mauborgne, 2008b, p. 2).
Learning from significant BOS moves, Guy Laliberté begun a business in circus and attained a greater success. The Cirque du Soleil did not succeed by competing for customers with other players in the circus industry who dominated children attractions.
Rather the business established uncontested new market space hence no competition. It targeted new clients who were mainly adults in this case and corporate clients who were ready to pay premium prices for unique circus entertainment. The industry was very unattractive and shrinking when Cirque du Soleil entered but it reinvented the industry created space by challenging the tradition notion of competition.
In order to improve this assignment, the cases that are related to the ideas of BOS should be accompanied with the assignment to give the students a wider understanding of what they are doing and how to do it. The video offer better visual feeling of the market space situation and helps the student to decipher shared or similar patterns across the various strategic moves. This is possible because the videos cover important ideas of the strategy especially the BOS moves which many people still miss. I am still unsure about how the BOS tools can be used for marketing in the Business-to-business marketing.
Definitely I would recommend this Blue Ocean Simulation Strategy to anyone who would like to improve his/her tactics of developing new market space. I worked well and I believe that I have learnt a lot of tactics in marketing and creating blue oceans.
I believe that the blue ocean strategy is applicable to a number of industries from all types of trades. This can range from typical businesses of consumer products, the service industry of entertainment, the technology industry like information technology, and more importantly the financial services industry.
My experience is that there are two interesting findings with regard to the business environment. Some steps are taken away from the final consumer. The tradition style of competition has been that businesses view their products as commodities hence placing on them some little room for innovation. As such the companies find themselves in the self-fulfilling environment. Finally I learnt that the more a business was removed from the final consumer the more potential or room it had for innovation for the next direct party in the chain.
Reference List
Kim, C., & Mauborgne, R., 2004. Blue Ocean Strategy, Harvard Business Review, Vol. 82, No. 10, Pp 76-84
Kim, C., & Mauborgne, R., 2005, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, Boston, MA: Harvard Business School
Kim, C., & Mauborgne, R., 2008a, Blue Ocean Strategy Solution, Introduction To Round Blue -2 STRATX
Kim, C., & Mauborgne, R., 2008b, Blue Ocean Strategy Solution, Introduction To Round Blue -3 STRATX
Kim, C., & Mauborgne, R., 2008c, Blue Ocean Strategy Solution, Introduction to Round Red STRATX
Niciejewska, K., & Dimitrov, D., 2008, Blue Ocean Strategy, Muniche, Grin Publishers