Importance Of Blue Ocean Strategy

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Strategic planning and decision making are important in organizations using business. A strategy is a long-term plan for the whole organisation or for an individual to ensure successful completion of any activity in a business. Most of the big business firms involved in national level of international level business develops strategy at executive level called corporate strategy. Corporate strategy is defined as the positioning and relating of the firm/organisation to its environment in a way which will assure its continued success and make it sure from surprises (Ansoff H. I. 1987). Several factors decides corporate strategy to emerge successful such for instance is growth, stability, profitability and efficiency. Growth involves the expansion…show more content…
It is important for public sector service organisations to show that taxpayers funds have been used well. This apart, market leadership strategies aims to grab the global market. The market leader is able to gain considerable cost advantages over rivals because by definition other firms will have a smaller market share and therefore fewer opportunities for economies of scale. Beyond all these survival is essential in a highly competitive business environment. Survival is the key to most organisations. Only by surviving they are able to develop other strategies. Apart from above, strategies of an organization or individual are divided into another class as (1) competitive strategies also called Red ocean strategies (Porter M.E. 1998), (2) monopoly strategy called Blue ocean strategy (Han Kim W. 2006), (3) sustainable strategy called Green ocean strategy (Hou, Shengtian, 2007), (4) a mix of Blue and Green called Purple ocean strategy (Babelfish, 2007). (5) unethical strategy for one time survival called black ocean strategy (Aithal P.S 2015) and combined/white ocean strategies used in this…show more content…
The bloodshed makes the ocean turn red. That is why the competing strategies followed by the organizations are called red ocean strategies (Porter M. E. 1980) [7]. Red oceans represent all the industries in existence today in the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are well understood. Here, companies try to outperform their rivals in order to grab a greater share of existing demand. As the space gets more and more crowded, prospects for profits and growth are reduced. Products turn into commodities, and increasing competition turns the water bloody. Red ocean strategy supports to compete in existing market space, beat the competition, exploit existing demand, make the value/cost trade-off, align the whole system of a company's activities with its strategic choice of differentiation or low cost (Porter M. E. 1980)

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