What is BOS? Nine Key Points of Blue Ocean Strategy (BOS)1. BOS is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000).
2. BOS is the simultaneous pursuit of differentiation and low cost.
3.The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.
4. BOS offers a set of methodologies and tools to create new market space.
5. While innovation has been seen as a random/experimental process where entrepreneurs and spin-offs are the primary drivers – as argued by Schumpeter and his followers – BOS offers systematic and reproducible methodologies and processes in pursuit of innovation by both new and existing firms.
6. BOS frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index.
7. These frameworks and tools are designed to be visual in order to not only effectively build the collective wisdom of the company but also to effectively execute through easy communication.
8. BOS covers both strategy formulation and strategy execution.
9. The three key conceptual building blocks of BOS are: value innovation, tipping point leadership, and fair process.
How does blue ocean strategy fundamentally differ from red ocean strategy?
In simple terms, red ocean strategy is about how to out-pace rivals in existing market space; it is a market-competing strategy. In contrast, blue ocean strategy is about how to get out of established market boundaries to leave the competition behind; it is a market-creating strategy.
Red ocean strategy assumes that an industry’s structural conditions are given and that firms are forced to compete within a finite market space. Taking market structure as given, companies are driven to try to carve out a defensible position against the competition in the existing industry terrain.
To sustain themselves in the marketplace, practitioners of red ocean strategy focus on building advantages over the competition, usually by assessing what competitors do and striving to do it better.
Here, grabbing a bigger share of the market is seen as a zero-sum game in which one company’s gain is achieved at another company’s loss.
Hence, competition, the supply side of the equation, becomes the defining variable of strategy.
However, to get the other side of the coin... please look at this REDocean, BLUEocean and the DEAD SEA - in enhancing your understanding on rObOs..!
