The Critical Discussion Of Strategic Models Business Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

This reports sets out the detail explanation over blue ocean strategy, highlighting the key main areas to be the market nicher. In order to be successful companies have to think beyond competition with their competitors. The report highlights the rule of game need to be set to redesign its current market strategies tom the dynamic blue ocean. It will provide an insight of dynamics market, showing a comparison between red ocean strategy and Blue Ocean strategy. An analysis between both the theories will ascertain the success or failure of business in this corporate world. By injecting the idea of Halal meat, a slaughtering method in which meat has been proved hygienic, in countries where the consumption of Kocher meat is high. The idea has several benefits: cost, health and well being with customer's value addition. Blue ocean strategy is the source of highly profitable growth where Companies challenge an industries conventional wisdom and achieve the long term monetary benefits. Although there are less walk in customers initially but based on the concept and mantra laid down in Blue Ocean strategy this can led to success. Its benefits, along with conclusion and disadvantages of Blue and Red Ocean Strategy will be discussed in detail.

Key Area of Research:

The main source of research is based on the book well written by Mr. W. Chan Kim and Renée Mauborgne "Blue Ocean Strategy: How to Create Uncontested Market Space and make the Competition Irrelevant. Author have focused on the real life practices of the corporate world and explained how those companies have developed their own Blue Ocean. Other source of research includes lectures, journals, reference books and publication in cover papers. A survey has also been conducted to support the idea and public opinion over the use of Halal products as replacement of Kocher meat. For assistance volunteers has designed a questionnaire for people considering the topic in context to determine whether the innovative idea would be an acceptable, healthier and hygienic solution without aggrieving religious susceptibilities of people. Findings based on above survey and questionnaire envisages the fact that not only Muslims prefer halal food even Jews prefer it over Kocher after informing them about its benefits and similarities in the concept referring with Hebrew Bible. The Halal meat will eliminate health issues and will be the respectful humane way of killing an animal to consume its meat. Moreover Halal meat has requisite to raise animal reared on grasses instead of junk supplements. The blue ocean strategy proved to be of great insight as it resolved many societal and religious issues of people, its structure and of its enactment.

Critical Discussion of Strategic Models:

According to well known authors and lecturers the best way to have an edge over your competition is to stop attempting to beat the competition. As per Mr. W. Chan Kim and Renée Mauborgne , whole market is based on these two strategies i.e. Blue ocean strategy and Red ocean strategy. Red ocean strategy is becoming bloody day by day and companies' management need to be more accustomed with Blue ocean strategy than current customs manager is used to. Red ocean strategy is representation of products which are in existence where as blue ocean strategy represent products or services which does not exist. Approach that creates value in product is hidden in complementary product and services. The success is to define and describe the solution customer think while selecting a product or service. Best and simple way is to think what a customer would think while buying product and his reaction after using that commodity. In red ocean strategy the ambits and limits are clearly defined and companies accept it willingly.

Based on Blue ocean strategy the companies should never outsource things in which they have core competencies. An artist will not let his idea to be painted with other artist. Same as the putting the feet in every shoe vis-a-vis story of strategy maker.

To increase the quantum of Blue Ocean, Companies shave to do revers engineering. Instead of focusing over their prospective customer, they need to look at non customer. Companies who approached for product differentiation need to build on powerful commodities in what buyer value.

Red ocean strategy following companies uses conventional approach to beat competition by developing position with in existing market. Contrarily operating in Blue ocean strategy do not fight over petty issues, they look beyond cat fights over profits. In other words, instead of focusing or introducing a product or service which eliminate the chances of moving toward supplementary items of competitors.

Mr. W. Chan Kim and Renée Mauborgne have termed Blue ocean strategy as value innovation. Value without innovation focuses only on creating value on incremental basis. This means that change can lead to upward trend but a slow pace, based on which survival is big issue. Simultaneously innovation without value seems to be technological change or pathetic concept or customers are unwillingly to adopt or accept innovation. Thereafter according to author Companies can attain value innovative when they are able to link innovation with:





Blue ocean strategy is new concept where Organization asks variety of questions from them to achieve niche market share where other organization have not started venture. Authors have defined a framework depending on four questions:

Which factor should eliminate industry takes for granted?

(Incase of Halal meat research health factor is taken for granted.)

Which of industries below standard factor should be reduced?

(In case of Halal meat the clotting in meat has been reduced as compared to Kocher meat)

Which of industries above standard factor should be raised?

(Here uniqueness and demand can be raise by obtaining certification from authorities)

Factors to be introduce which are never offered before.

(Punched meat in clean and hygienic manner in front of customer)

Kim and Mauborgne discussed that high performance cannot be achieved using strategies based on traditional competency. To earn more profits opportunist or entrepreneurs need to develop blue oceans.

The authors explains that many companies have traditional belief of competing with the others in the market fro survival and they are forced to do so, termed as structuralism. To remain in the market, business gurus of red ocean strategy focus on making profit through competition, usually by evaluating what opponents are doing and striving hard to do better. In these circumstances, having or attaining a bigger share of the industry is seen as a zero sum game in which the organization achieved an increment in the deficit of another organization. Due to which the equation of supply becomes the variable component explain strategy in competitive market. Where, associated cost are considered as trade-offs and a company selects a unique cost or unique position. This is because the total earning level of the targeted industry is also determined by essential factors, companies ultimately seek to obtain and redistribute capital other than creating wealth. They prefer Red Sea, where there is limited growth

Blue Ocean Strategy, however, based on the view that the limits of the market and the structure of the industry can not be given and can be rebuilt from the acts and assumption of market players. This idea is termed as "reconstruction" by the authors. Assuming that the market structure and limits exist only in the minds of managers and professionals who hold this view do not let current market structures limit their thoughts and creativity. Crux of the matter is how to create it. This, in turn, requires a shift in attention to demand from supply, to focus on innovation value from a focus on competition - which a source to create new demand. This is achieved through surveys, experiment and research at a time of low cost and diversity. As the market norms relating to cost and equilibrium have been broken, what will be the rules of the game? Competition in that is irrelevant. New wealth can be generated by raising the demand Due to which companies can play non sum zero game, with more perks and returns.

Implementing blue ocean strategy does not mean a company need huge fund to launch a new strategic model in market to attain profit in near future. However companies can purchase their route to the blue ocean through research and development. From bookish point of view, this is possible, but ignores some precautions of Blue Ocean Strategy. Development over innovation is warned because the new product can be thrown out of the market by providing product for which customer is not ready to pay for it. Moreover a dependeum pendulum needs to be established between cost and price. Therefore, investing much over research and development could find a Blue Ocean, but will not guarantee success. But chances of failure increases. Basic principle and the most significant of companies' strategic requirement to be determined before investing money in its development. A company thinking to recreate a blue ocean should ensure that these number of compromises is less than the satisfaction of customer which must be maximum. Last but not the least, Blue Ocean bringing of new factors never been introduced ever. This will ensure that company seek to be different among the market people and have to move one step ahead of red ocean strategy.

In the pursuit of market differentiation and driving down costs, the first two questions help drive the costs down while the latter increase buyer value. Together these four factors work in creating the 'Blue Ocean' and make the competition irrelevant. However in today's modern times, creating and retaining a blue ocean market is difficult. This is due to other competitors either catching up with imitations of what the organization is offering or either the threat of new market entrants that may as well take up the idea that was originally intended to be a blue ocean of its own, but turns into a red ocean once new innovations in that field start to emerge.