Blue Ocean Strategy

Hi LZ,

After discuss with Chee Ern, I will like to start something we can discuss and crosscheck the understanding of each other.

Let start with a topic. I choose "Blue Ocean Strategy". It is a brand-new Strategic Management Theory stimulated by Professor W. Chan Kim and Renée Mauborgne around 2005.

The backbone of the Theory is creative, value-based marketing and out of competition.

"The "ocean" refers to the market or industry. "Blue oceans" are untapped and uncontested markets, which provide little or no competition for anyone who would dive in, since the markets are not crowded.

Their idea is to do something different from everyone else, producing something that no one has yet seen, thereby creating a "blue ocean". An essential concept is that the innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market."

Reference:

http://en.wikipedia.org/wiki/Blue_Ocean_Strategy

http://www.valuebasedmanagement.net/methods_kim_blue_ocean_strategy.html

http://www.aslangroup.net/BlueOceanStrategy.htm

http://www.marketingprofs.com/ea/qst_question.asp?qstid=13173

For my opinion, it is really look like another side from Porter's Competitive Advantage which emphasize on Competition. However, most of the time, they are look like the same.

Porter try to looking to create competitive advantage via Price-marketing, Differentiation, or segment marketing. Another side, Kim and Mauborgne looking forward to new market.

The Red example with Blue

For example, Dell supply-chain. In Red, Dell create a competitive advantage by reduce the length of supply chain lead to lower cost (Cost Leadership), better control and better service (Market Differentiation).

But, it is irrelevant to Blue? I don't think so. It is because Dell revolution act create a new market for PC. By adding Internet as the supply chain component, Dell create a new ONLINE and DIRECT way of selling personal customized PC, which for years, competitor does not tap in.

The Blue example with Red

I got some points on Ikea Furniture and Nitendo DS. However, I will only elaborate on NDS.

Nitendo DS is a design that a gaming console. Not sure where the preliminary concept from, but it bring the way of gaming like Dancing Console to Home Gaming Console. For NDS, electronic gaming is no longer a so-called "not health activities", which it includes gaming concurrent with exercise.

Thus, it create a new market which other competitor does not have. However, can we say NDS does not compete? The answer is most properly NO. NDS is always compete with gaming console from PS, XBox or even PC Games. It is because no matter the conventional electronic gaming market or NDS creative gaming market, they share the overlapped target market.

Are they look the same. Let share some of your opinion here.