International Journal of Economics, Commerce and Management Research Studies

Volume 1, Issue 2, September - 2018

The Implementation of Blue Ocean

Strategies in Business
Ejona Duçi Elfrida Taraku Mersida Shytani
Department of Finance and Department of Finance and Siena University
Accounting University Aleksandër Accounting University Aleksandër Siena, Italy
Moisiu Durrës, Durrës, Albania Moisiu Durrës, Durrës, Albania

Abstract: - Why so many businesses fail even though
they have many competent people in big business plans?
Porter suggests that business should be in the right
industry. Five competitive forces have been mentioned
by Porter that has a significant impact on the business
world. Forces are the most important part of drafting a
strategy to set up a lucrative business.
Keywords:- Component; Blue Ocean Strategy, Red Ocean,
Value Innovation, Competition, five competitive forces,
Canvas Strategy, ERRC Network, 4 Framework of action,
buyer, consumer.
I. INTRODUCTION

Porter believes high priority should be given to

substitute products. This is similar to the "Blue Ocean"
concept mentioned in the book: "Blue Ocean Strategy".
Kim and Mauborgne authors emphasize that there are
no companies in the world that will be forever
successful, but it is possible to have temporary success.
The existing market with fierce competition and
competitors on the market is called the Red Ocean. In
the Red Sea, industry boundaries are defined and
accepted, and the competitive rules of the game are well-
known. Instead, the authors suggest that the company
should create a new market, an ocean called Blue, where
competition in it and all negative consequences become
irrelevant for a company. The first step towards a blue
ocean is to go without making comparisons. To put a
company on a lucrative path within the industry's
conditions it is not to look at the stages of the
development of competition by trying to offer something
more to something less. Such a strategy can increase
sales, but will hardly drive a company out of space to
market. It does not give a considerable competitive edge.
Kim and Mauborgne believe that innovation value
is the result of combination and value creation and
innovation. Value Innovation forms the basis for a Blue
Ocean. Instead of focusing on the beating of competition,
firms focus on making irrelevant competition, creating a
step in value for the buyer and the company, opening up
new and undisputed market spaces. This approach
allows the company to achieve differentiation and low
cost at the same time. Value Innovation is a new way of
thinking about executing a strategy that results in the
creation of a blue ocean and a break from the races.
Companies have always been in competition with each
other in pursuit of a stable profit and growth in the market.
They have fought for competitive advantages, market share
and differentiation.
Even today, developed industries compete with each
other by reaching a "Red-eared Ocean" by competitors
fighting in a pool where profit is always on the decline. In
the book written by W. Kim Kim and Renee Mauborgne, it
is precisely this fact that companies that compete within
these red oceans are increasingly difficult to provide growth
in the future.
Based on a study of 150 strategic moves involving
more than a hundred years and thirty industries, Kim and
Mauborgne argue that leading companies will not succeed
by competing with competitors but creating "blue oceans"
for economic growth. These strategic moves called "value
innovation" - create strong leverage for firms and buyers,
creating advantages over rivals and affecting demand
growth.
The "Blue Ocean" strategy offers a systematic
approach to making irrelevant competition. Examining a
wide range of strategic moves in many industries made it
possible to formulate six principles that each company can
use to reach the blue zone, otherwise called "Blue Ocean
Strategies."
II. WHAT IS THE BLUE OCEAN STRATEGY? TEN
IMPORTANT POINTS

This is illustrated by the case of du Soleil Cirque

(Canadian circus), who succeeded in creating a new
market based on the Blue Ocean principle, reducing
costs and continuing to add value. With the introduction
of these new factors, Cirque du Soleil has created more
sophisticated performances and this explains why
Cirque du Soleil is so successful.

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 International Journal of Economics, Commerce and Management Research Studies
"There are no great eternal companies, no big eternal
industries. But there are still strategic moves that remain
permanent. "
 SOB is the result of a long 10-year study of 150 strategic
moves involving over 30 industries over 100 years (from
1880 to 2000).
 SOB is a simultaneous search on differentiation and low
cost.
 The SOB's goal is not to improve competition in the
existing industry, but to create new spaces in the market
or a Blue Ocean, thus reducing the importance of
competition.
 While the change is seen as an odd / experimental
process, where entrepreneurs and spin-offs (spin-offs)
are the main drivers-as Schumpeter argues its followers -
The SOB offers a systematic and reproducible
methodology and continues with the search for the Blue
Ocean, both of which are both new and existing ones.
 The SOB framework and tools include: strategy support,
value curve, four action framework, 6 paths, buyer
experience cycle, buyer benefit scheme, and blue ocean
goal index.
 These frameworks and tools are designed to be visible in
order not only to effectively build the company's shared
experience, but also to allow for effective
implementation of the easy communication strategy.
 The ILO includes both the formulation of strategies and
the implementation of strategies.
 The three main conceptual building blocks of the SOB
are: value innovation, leadership at turning points, and
honest process.
 While competitive strategy is a structuralize theory of
strategy, in which structure gives shape (sets) strategy,
the SOB is a deconstructionist theory in which strategy
defines the structure.
 As an integrated approach to the strategy at the system
level, the SOB urges organizations to develop and
prioritize three strategy proposals: value offering, bid
and fat offer and people's offer.
III. THE FORCES THAT SHAPE THE
COMPETITION IN THE RED OCEAN
A. Threat of entry
Porter (2008) said: "New entrants to the industry bring
new capacities and a desire to gain market share, which puts
pressure on the awards, costs, and the degree of investment
needed to compete.
The threat of entry will limit the maximum
profitability within an industry. When the threat is strong,
companies have to lower their prices or increase investment
to fight competition. So the threat of entry has definitely
lowered the benefit.
Porter (2008) suggests seven main sources in creating
a barrier for new entrances, which matched the idea of Kim
and Mauborgne that it is very difficult to enter the market
with the highest competition of the Red Ocean:
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Volume 1, Issue 2, September - 2018
B. The economies of scale economy supply
Firms have significant advantages when products are
produced in bulk. Unit costs are lower, as fixed costs can be
delivered to large number of units. So, the most efficient
technology can be used. Distributors can benefit from better
conditions.
C. Positive aspects of the degree request
These benefits discourage the new entrant, reducing
the readiness of buyers to buy to a newcomer and lowering
the price, the newcomer has the ability to dictate until he
manages to deploy a larger number of core clients. Buyers
usually trust the well-established companies in the market,
regarding important products.
D. Customer reimbursement costs
Revenue costs are fixed expenditures that buyers have
to bear when changing suppliers. Such costs may be due to
the need to change product specifications, staff retraining, or
work procedure modifications. The higher the return cost,
the harder it is for a newcomer in the market to win buyers.
E. Capital Requirements
Major international firms own powerful financial
resources to dominate almost every industry. To build up
factories, for consumer loans, inventories and initial loss
financing, large capital is required. Such large demand in
certain industries is factors that limit the number of potential
entrants.
F. Advantages of maintaining the position, regardless of
size
Porter (2008) describes: "Despite their size, position
holders may have the advantage of cost or quality that are
not available to potential rivals. These advantages come
from resources such as proprietary technology, privilege on
raw material utilization opportunities, and a predetermined
selection of geographically more favorable locations, known
brand identities, or an already accumulated experience over
the years that it has enabling market position holders to
learn how to produce more efficiently.
G. Uneven use of distribution routes.
Sometimes the opportunities for using distribution
channels or networks can be a major obstacle that
newcomers in the market may need to give up on all
distribution channels or create their own channels. The more
limited the majority or retail networks, the more difficult it
will be to enter the industry.
H. Government Restrictive Policies.
Government policies can directly affect limitation and
even impede access to certain types of industry. This can be
done through actions such as trade barriers, quota controls,
licensing requirements and restrictions on foreign
investment.
I. Power of suppliers
Companies are dependent on major suppliers, which
can get more profit, which is not able to pass on rising costs
in their prices, for inputs. Suppliers can earn more from
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 International Journal of Economics, Commerce and Management Research Studies
rising prices, lowering quality or services or transferring
costs to other industry players. If a particular industry
manages to provide the bulk of the volume or profit of a
supply group, then it has the opportunity to defend its
industry through reasonable pricing, investment in R & D
and lobbying tactics. Companies can face high costs if they
change suppliers, even risk their strategy to move forward in
the industry.
J. Power of buyers.
Powerful buyers can take such importance to
determine selling prices. On the other hand, good quality or
more services can be demanded, resulting in increased costs.
Consumers can have great influence on dealings, especially
when the business environment is price sensitive or there are
few buyers or rely on volume of purchases that are
relatively bigger than those of a provider single. Large-
volume buyers are particularly strong in high-cost fixed-line
industries such as telecommunications equipment, offshore
drilling, and most of the chemicals.
K. The threat from substitutes.
A substitute offers the same or a similar function of an
industrial product, by other means. For example. e-mail is a
substitute for traditional letters. Videoconferencing is a
substitute for physical meetings.
The benefit of an industry will fall if the threat of
alternate alternative routes is high or when the cost of
switching to the replacement industry is low, practically
setting a price ceiling. Today's technological advances bring
constant disruption to competition even in businesses that
seem to have no connection in the first place, having a
major impact on the benefits of the industry.
L. Rivalry between existing competitors.
Rivalry is particularly a devastating factor for
profitability within an industry, because competition
transfers industry gains to its customers. Price reductions are
short-term tactics and easy to implement, but there will be
an immediate response from the competition. Constant price
awards makes buyers pay less attention to the characteristics
of the product or service. The rivalry rate is stronger if
competitors are powerful or are equal in size. Large firms
are more likely to undertake competitive actions and
strategic actions at a given moment and they have the
unused resources needed to launch a large number of
competitive actions. If industry growth is slowed, everyone
has no choice but to fight for the market.
IV. PRINCIPLES OF BLUE OCEAN STRATEGY
BOS is the simultaneous tracking of differentiation
and lower cost. The Blue Ocean Strategy Principles are the
six main principles guiding companies to formulate and
execute their Blue Ocean Strategy in order to minimize
systemic risk and maximize opportunities.
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Volume 1, Issue 2, September - 2018
The first four principles have to do with the
formulation of the Blue Ocean Strategy.
A. Reconstruction of Market Boundaries.
This principle identifies the ways that managers
manage can build unsuspecting space between the various
industries by taking care of the various risks. It teaches
companies how to make trivial competition by looking
around 6 conventional boundaries of competition by
opening up important Blue Ocean trading. The sixth streets
focus on capturing industry alternatives, through strategic
groups, through buyers' groups, through complementary
products and services provided through the emotional-
fiction orientation of an industry, and also through the time
needed.
B. Focus on large paintings, not numbers.
Illustrates how to design the plan process strategic
development of the company by moving to visible
improvements in growth by creating value innovation. This
is seen as an option by the company to make visible
improvements. Using visualized benefits, this directs
managers to focus on total performance rather than
numbers, this principle has as its main goal the four-step
planning process in which you can build a strategy that
creates and captures the opportunities of the Blue Ocean.
C. Achieve through the existing request.
To create a larger market of new demand, Managers
can challenge the conventional market segmentation
practice in order to meet customer preferences. This practice
usually results in the growth of the small market group.
Instead, this principle shows how we can increase demand
by not focusing on the differences that divide our customers
but by building a strong resemblance by maximizing the
size of the Blue Ocean's creation and unlocking the new
demand, minimizing the degree of risk .
D. Acquiring the Right Sequence Strategic.
This principle describes a sequence which companies
should follow to make sure that their business model built
will be able to produce and maintain the viability of growth.
When companies encounter the frequency of utility, price,
cost, and adaptation requirements, they address business to a
risk model and an idea for the Blue Ocean in order to trade
in the best possible way.
The two remaining principles have to do with the risk
of executing the Blue Ocean Strategy.
E. Overcoming the main organizational barrier.
Tipping Point Leadership tells managers how they can
be mobilized to overcome the organizational barriers that
hinder the implementation of the Blue Ocean Strategy. This
principle is about organizational risk. This principle outlines
how managers and managers should use resources,
recognitions, motivations, and political obstacles depending
on resources and time constrained during the
implementation of the Blue Ocean Strategy.
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 International Journal of Economics, Commerce and Management Research Studies
F. Execution of strategy execution.
By integrating the execution into the strategy, people
are motivated to act and execute the Blue Ocean strategy in
a profoundly sustainable way in an organization. This
principle is what the authors of the Blue Ocean Strategy call
the Fair Process because the blue ocean strategy represents a
statuquoia department, the Fair Process is intended to
mobilize people voluntarily to cooperate to execute Blue
Ocean's strategies. This is about managing risk associated
with people's attitudes and behaviors.
V. STRUCTURE AND TOOLS OF THE BLUE
OCEAN STRATEGY
There are many tools and applications available that
serve the development of the strategy in a competitive
oceanic environment. Various tools have been used to study
competitive oceanic situations such as 5 porter forces or
industry environmental analysis and many more. But, there
are no practical tools to study competition in the blue ocean,
so below we will see some analytical tools and the structure
of the implementation of the Blue Ocean Strategy.
The Canvas Strategy is the first strategy to make the Blue
Ocean Strategy's wording.
Fig 1:- Canvas Strategy
The Canvas Strategy is the central diagnostics and
framework for building a Blues Obedient Strategy.
The horizontal axis includes the range of factors in which
the industry competes and invests in, and the vertical axis
includes the level of supply that buyers are offered through
all the competitive factors.
Canvas Strategy Serves 2 Purposes:
 First, it captures the current state of the game in a well-
known marketplace. This allows us to figure out where is
currently investing the competition and the factors in
which the industry is competing. Second, pushes us to
move our focus shift from competitors to alternatives and
from consumers to non-industry customers.
 The value curve is the main component of the Canvas
strategy. This is a graph of the relative performance of the
company through competitive industry factors.
As we will see from the diagram above, whatever
makes me a value curve is the focus, avoiding more from
the bullet in the bottom.
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Volume 1, Issue 2, September - 2018
Fig 2:-Value Innovation
Value Innovation is the foundation of the Blue Ocean
Strategy. Innovation of value is the simultaneous tracking of
differentiation and lower cost. Value Innovation focuses on
making unimaginable competition by creating a valuable
step for the buyers and the company, opening up new and
undisputed market spaces. Because the buyer comes from
the price difference offered at cost, value innovation is only
available when the entire system of usefulness, price and
cost are in a line.
A value gap can be shown by linking all these points
together and by testing a comparison between the products
and services of our company with other competitors.
Individual products and services can be identified through a
strategic profile.
A new product or service with a large differentiation
can be created at a low cost, the process will require you to
be guided by the application and application. A Blue Ocean
Strategy can overcome the traditional problem of
simultaneous arrival and differentiation and lower cost.
The new curve created in the Canvas strategy has three
features:
 Every great strategy has a focus, and a strategic business
profile, or a value clause, and can easily show it.
However, it is important to achieve a clear focus on key
competitiveness factors.
 When a company tries to keep up with competition
strategies, it loses its distinctiveness. On the other hand,
the value curve in the Blue Ocean Strategy always stands
out. Applying the four tools for eliminating, reducing,
building and creating successful companies have
differentiated their profiles. So their curves are
completely different from the curves of the competitors.
 A well-grounded team has clear and fair competition
goals, this is a variant of a new slogan typically used in
marketing materials to create a new profile strategy. For
example, airlines in the south used: "With the speed of an
airplane the price of a car ride-travel wherever you want"
 Reconstruction of market boundaries.
A. Red Ocean to the Blue Ocean
 Red Ocean Strategies
 The Red Oceans are all existing industries today, well-
known market areas and industry boundaries are clearly
accepted and concerned about the existence of the
customer. So they compete in well-known market
spaces.
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 International Journal of Economics, Commerce and Management Research Studies
Volume 1, Issue 2, September - 2018
 All industries strive to compete with price rivals, C. Four framework of action
considering the most important division of markets. So
fight the competition.
 There is a fierce competition and the products are
different so there is a small opportunity for growth and
small profits can be obtained.
 The Red Ocean can use one of the two strategies: either
price strategies or the creation of a unique strategy.
 For example: telecommunications companies.

The Red Sea Strategy is the strategy that seeks to

create advantages over competitiveness; it focuses on what Fig 3:- Four frameworks of action
competitors do and then do what they do but in a better way.
Taking a very large part of the market is seen as a To rebuild the elements of the value of the buyers by
possibility that a company's achievements can only be occupying a new value margin, we use 4 action frames. As
realized by benefiting from the weaknesses and loss of shown in the diagram above, to break down trade between
another company. Growth in this kind of strategy is limited. differentiation and low cost and to create a new value
This strategic way of thinking with firms in the division of margin, there are four key questions to challenge the logic
industries into two types: attractive industries and non- strategy in industries and the business model:
attractive industries, and decide on which industries to enter  Which of the factors that the industry holds the given
the market and which not. should be eliminated?
 Which of the factors should be reduced well below
B. Blue Ocean Strategies
industry standards?
 Not all industries are in existence today, there are
 Which of the factors should be raised well above the
unfamiliar market spaces.
industries?
 There is the possibility of creating a new request that
 What factors does the industry have ever offered to be
brings a greater opportunity for growth and a greater
created?
opportunity for benefits.
 Competition cannot be emphasized that there is no
ELIMINATION GROWTH
comparison between companies.
 The Blue Ocean can use both tactics as price and Which of the factors can Which of the factors should
creation of a unique strategy to create value innovation. you eliminate in order for be raised well above the
your industry to continue industries?
 For example: CNN, iPod, Southwest Airline
to compete?
The Blue Ocean Strategy is that market boundaries REDUCTION CREATION
exist only in the minds of the managers and they will not Which of the factors Which factors that the
allow the existing market structures to limit their thoughts. should be reduced well industry did not offer
below industry should be created at times?
RED CREAM BLUE OCEAN standards?
STRATEGIES STRATEGIES Table 2. ERRC Network
Compete in popular market Creates unsustainable
spaces. market spaces The ERRC (eliminate, reduce, raise, create) network is
complementary to the four limitations of action. It pushes
Competition woes. They make the
companies not only to ask everything about the four
competition void.
questions in the four action limits but also to act to create a
Expose the existing request Create and meet new new value loop that is essential to unlocking a new Blue
demands. Ocean. By addressing the companies to fill the network with
Trade with the value of the It discards trade with the elimination and reduction actions as well as growth and
cost cost value. creation, the network gives the company four major benefits
They manage all the Leading all system that are:
activities of a company's activities are firms  It pushes companies to pursue a straightforward
system with its strategic seeking differentiation differentiation and minimum cost by breaking the cost-
choices of differentiation or and lower cost. value trading.
low cost.  It immediately releases companies that are focused
For example, mobile phone 1- Eg: CNN, iPod, solely on growth and creation, and raises the cost
industries Southwest Airline structure by overestimating products and services, a
Table 1. Essential changes between the Red Ocean Strategy general promise to companies.
and the Blue Ocean Strategy  It is easy to understand by all managers at all levels,
creating a high level of engagement in its applications.

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 International Journal of Economics, Commerce and Management Research Studies
 Because grid filling is a challenging task, it drives the
companies to the powerful observation of every factor
with which they compete, making them discover the
absorption of the boundaries that they make irrationally
by competing.
Fig 4:- Map Pioneer-Migrator-Settler
An easy-to-use exercise for a management team is a
corporation pursuing profitability growth, making it a
pioneer-Migrator-Settler (PMSP) prospect and portfolio.
For the purpose of the exercise, settlers are defined as
businesses that imitate existing products. Migrants are
defined as businesses that offer better than others in a
market space and start-ups are businesses that offer
unreachable value. These are two Blue Ocean Strategies and
are among the strongest sources of profitability growth.
If, simultaneously, the current portfolio and planned
bids consist mainly of Settlers businesses, the company will
have a low growth path, is largely limited by the Red Ocean,
and need to push towards value innovation. Although the
company may be of great profit today because businesses
settlers are still making money, they may well fall into a
trap of benchmarking, imitation, and intense price
competition.
If current and planned bids consist of a large number
of migrant businesses, a reasonable increase can be
expected. But if the company does not exploit the best
potential for growth and risk will be limited by the value-
enhancing company. Experience shows that the more
settlers in the Settlers business are, the greater the
opportunities for value innovation and the creation of a Blue
Ocean Strategy in a new marketplace.
This map is particularly useful for those managers who
want to see beyond today's performance. Revenue,
profitability, market share and consumer satisfaction are all
measured by the current position of the company.
Clearly, what companies need to do is change the
balance of their future portfolio against the Pioneers
businesses. This is the way for increasing profitability. The
PMSP map above describes this trajectory, indicating the
purpose of the company portfolio distribution for
participating businesses, where it is shown that the
seriousness of the actual portfolio of twelve businesses is
expressed in twelve points, shifted from a preponderance of
Settlers businesses to a strong balance the dominance of
Migrators and Pioneers businesses.
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Volume 1, Issue 2, September - 2018
Fig 5:- Buyer Experience Cycle / Buyer Utilty Map
The Buyer's Benefits Map helps managers to think
about the right prospect for the future. It describes all the
companies that are drawn to deliver goodies to buyers as
well as the different experiences that buyers have for
products or services. This allows managers to identify the
full range of useful proposals that a product or service can
offer. Let's see the size of the map in detail.
Six stages of the buyer experience cycle. The
shopper's experience can go through a cycle with six distinct
phases, passing frequently or rarely to the available demand.
Each stage involved a wide variety of specific experiences.
Requirements e.g. to navigate to Amazon.com.
The six levers of usefulness. Falling through the stage
of shopper experience is what we call the leverage of
usability. The way in which companies unlock the
usefulness of their customers. Much of the leverage is
visible. Simplicity, entertainment, image and environmental
friendliness required a little explanation. A product or
service provides convenience simply by the fact of being
easy to assure and to use. The most commonly used and
most noticeable leverage is lately the productivity of the
customer. An innovation can increase productivity by
helping them do things quickly, better or in different ways.
By finding a new product in one of the 36 customer
benefit mapping areas, managers can clearly see how a new
idea creates a useful proposition from existing products.
D. Three level of non-consumers
Fig 6:- three levels of non-consumers
Typically, to increase market share, companies try to
keep and expand existing customers. This usually involves a
market segmentation and recognition of customer
requirements and maximum satisfaction of their preferences.
The more intensive the competition is, the greater the result
of the bid's clientisation. Just as companies compete to
embrace customer preferences through market segmentation
they offer the risk of creating small market targets.
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 International Journal of Economics, Commerce and Management Research Studies
To maximize the size of their Blue Ocean, companies
need a change of orientation. Instead of concentrating on
consumers, they should focus on non-consumers. And
instead of focusing on consumer differences, they need to
build a strong resemblance to things that buyer’s value. This
allows companies to reach an existing demand and attract a
portion of consumers that did not exist in the foreground.
Although the universe is packed with non-consumers
offering many blue ocean opportunities, in fact, few
companies have accessed non-consumers to study who they
are and how they can be unlocked. To convert all this
hidden cursor to a noticeable company law, one has to
understand the universe of not the consumers.
There are three non-consumable levels that can be
transformed into consumers. They differ at a relative
distance from our market.
The first level of non-consumers is closed in our
market. They stand in our market. They are buyers who
minimally buy the indispensable products of this industry
but who are supposedly non-consumers of this industry.
They are ready to be hired in another market as soon as
possible and given the first opportunity.
The second level of non-consumers is the people who
refuse to use the bids of the industries. They are buyers who
have seen the offerings of our industries as they are able to
meet their needs but who have actually voted against them.
The third level of non-consumers is far from your
market. They are non-consumers who have never seen the
offerings of our industries as their option. Focusing on the
key of similarities between these non-consumers and
existing customers, companies can understand how they can
attract them into their new markets.
Fig 7:- Four obstacles to execution
Immediately after a company has developed a Blue
Ocean Strategy with a business viability model, it must
execute this.
The challenge of execution exists in any strategy.
Companies, as well as individuals, often have a difficult
time to operate in the case of a Red Ocean or in the case of a
Blue Ocean. Challenges of managers are often steep. they
encounter four obstacles:
 The cognitive barrier, this obstacle forces the employees
to change their strategy. The Red Ocean may not be the
next path to increasing profitability, but they feel
comfortable with people and have been doing well to the
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Volume 1, Issue 2, September - 2018
organization so far, why should we hit this boat in this
ocean?
 Limited resources. The bigger the difference in a
strategy is, the greater the resources needed to execute it.
But many companies find the sources of their supplies.
 Motivation. How can you motivate the main players to
move fast and steadily to reveal a part of the statu qua?
 Policy. Just as a manager puts it, in our organization you
can easily lean down rather than get up.
Keep in mind that companies face these four hurdles,
and many of them bother them, so the best way is to know
how to triumph over them and face organizational risk.
To achieve this effectively, companies under the
influence of change should abandon what is called Wisdom
Perceptions. Conventional Wisdom protects the idea of how
big the challenge is, the greater the resources and the time
available to produce the right results. Instead, you have to
analyze in your conventional Wisdom mind to use what we
call Tipping Point Leadership. Tipping Point Leadership
allows us to quickly and easily overcome these four hurdles,
and allows the winning employees to support the execution
of a part of the status quo.
Conventional Wisdom: the theory of organizing the
change that lies in the transformation of the mass. Thus
change efforts are focused on moving the mass by seeking
long term resources and long-term structure.
Tipping Point Leadership: Changing the mass by
focusing on extremes, people, actions and activities that
exert a disproportionate influence on performance to
achieve shift / change strategy quickly and at low cost.
VI. THE WEAKNESS AND POWERS OF BLUE
OCEAN STRATEGY
A. Blue Ocean Power
"The Blue Ocean Strategy" can lead to organizational
excellence. The four steps that show the development of the
strategy represent the step-by-step demonstration of the self-
creation process.
 The reconstruction of market boundaries (III) can be
considered as the most innovative methodology, trying
to broaden market boundaries systematically and to
target creative markets in a new way:
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 International Journal of Economics, Commerce and Management Research Studies
 To eliminate all alternative industries with: substitutes
(different forms, performing the same function, the same
usability) and alternatives (different functions, same
goal)
 Study all strategic groups within industries: Pricing and
Performance Groups.
 Study the whole chain of buyers: buyers, influencers,
users.
 Study complimentary products and offering service:
before, during and after using the product.
 Study all functional or emotional complaints for buyers:
rational or emotional.
 Be vigilant throughout the period: monitor external
trends.
 Focus on total performance and not just profit (IV) thus
creating a self-image of the company:
 Identify the current state: look at where the company is.
 Identify new opportunities: make yourself look more.
 Identify strategy failures: Compare where we are and
where we should be.
 Identify the communication routes: present and make the
company panorama known.
 Expanding the market through existing demand (V) is a
good strategy to expand to target markets:
 Near the market: there is no encouragement to become a
consumer
 Opponents of the market, who are aware of not entering
the market.
 Unspecified consumers who do not know anything about
the product.
 The pursuit of a Straight Strategic Sequence (VI) is the
last factor that needs to be taken into account and that
needs to take into account customer benefits. Managers
should plan the new cost structure and costs:
 The Buyer's Structure - Identifying Customer Benefits.
 Price structure - identifying price elasticity and response
rate.
 Cost structure - building a new cost through reducing the
existing cost.
Overall, it remains difficult to identify an appropriate
entry level for the implementation of the "Blue Ocean
Strategy".
B. Blue Ocean Defeat
In spite of the fact that the Blue Ocean Strategies are
used to reach market share, there are some metaphors that
clutter and do not allow for a clear understanding of what
the Blue Ocean itself is like.
In fact many firms know the importance of new
markets and the gain of strategic advantages. So it's not a
new idea, only in this case the authors Kim and Mauborgne
have called it all this 'Blue Ocean', describing new markets.
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Volume 1, Issue 2, September - 2018
Kim and Mauborgne (2005) state: "The creators of the
blue oceans, strangely, do not use competition as a reference
basis. Instead, they follow another strategic logic that we
call value innovation. We call it so, because instead of
focusing on competing in the competition, focus on making
the competition worthless, creating a step in value for your
buyer and your company. This is similar to "differentiation
strategies".
Globalization that is often seen as a two-edged knife
has caused a major change in the business environment
today. It brings opportunities and challenges, advantages
and disadvantages to the business environment. There are
many factors that affect the economic environment, the
political / legal environment and the cultural environment.
Kim and Mauborgne suggest that following the six
strategies mentioned above, firms can be very successful,
but businesses at this time have more ambiguity and are
more complicated.
The Blue Ocean Strategy does not address the real
world problem. It is very difficult or impossible for a large
company to recreate or restructure itself or go in completely
different directions. Many business consultants still believe
that the company should play with the existing advantages
rather than move the first to emerging markets. In fact,
creativity and risk are key factors but Ocean Blue is not
mentioned much.
VII. IMPLEMENTATION OF THE FIVE PORTER
FORCE STRATEGY
Porter (2008) describes that it is important to
understand industry forces because it is the first step in
drafting the strategy. Forces reflect the most critical aspects
of the competitive environment. The company can move on
to the productive opportunities for implementing the
strategy by benefiting from the current competitive forces as
well as anticipating possible changes in these forces.
These 6 forces make it possible:
 Company positioning
Five forces allow companies to analyze well inputs
and outputs. The strategy can be used to place competitive
advantages or identify industry weaknesses. A firm must
find the full potential of business. To start a new business
venture, managers can use 5 forces to identify a good-
looking industry that is reflected in their business plan.
 Exploiting industry changes
Industry changes create opportunities to reach and
capture new promising markets if the manager has a clear
picture of competitive forces, thus enabling new ideas for
new products and ideas for the way the existing customer
service can be achieved.
 Construction of the industry structure
Some companies have the ability to build the industry
structure and are able to lead their industry towards new
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directions of competition to change the five forces in their
favor.
 Reversal of benefits
To capture more profits from industry competitors, the
main objective is to minimize the profits that are shared
between suppliers, buyers and intermediaries. To neutralize
the power of a supplier, managers can create a standard or a
specification so that all parts can be produced universally.
To control consumer power, the added value of services can
be integrated so that buyer costs will increase. Increasing
the budget for R & D and setting a better brand can frighten
the new entrants. To reduce the threat of substitutes,
managers can give a better value to the product and service
through new features or product diversity.
There is a weakness to shape the industry structure.
Firms can cause new types of competition that scans no
guarantee they can win because of pressures to gain market
share. Managers who just want to improve their competitive
advantage can become "lovers" of innovation and ignore the
long-term benefits of the industry.
 Expansion of profit
When demand generally increases, the quality of the
industry grows, the main costs are reduced, or the losses are
eliminated. The total value available to competitors,
suppliers and buyers increases. The total profit is expanded,
for example, when channels become more competitive or
when an industry discovers buyers hiding for its products
that are currently not served. The total value can be
expanded even when firms work in cooperation with
suppliers to improve coordination and limit unnecessary
costs incurred in the supply chain. This naturally reduces the
cost structure of the industry, allowing higher profit, higher
demand through lower prices, or both.
 Industry definition
Five competitive forces affect the definition of the
relevant industries (or industries) in which a company
competes. Defining the industry's boundaries exactly around
the country where competition occurs will clarify the causes
of profitability and the appropriate set-up units. A company
always needs a unique strategy for every particular industry.
Mistakes in industry definition made by competitors present
an opportunity to benefit from strategic positions.
VIII. THE BLUE OCEAN STRATEGY
MOVEMENTS
Many industries offer similar opportunities to create
the Blue Oceans. Determining who the target buyers are,
what they want, companies can often determine new ways
to create value. For example, if we look at the requirements
of managers for photocopying machines that want great,
longevity, fast, and require the minimum of maintenance. So
by following this request, Canon, the Japanese coma, has
created photocopies and small size printers that are suitable
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Volume 1, Issue 2, September - 2018
for personal use. With these smallest and simplest printers
in use, the company created new box office space.
In 1990, Apple noticed the rumors of illegal music that
Napster, Kazaa and Limeëire were making, which had
created an online network that anyone could access free of
charge. In 2003 more than 2 billion songs were taken
illegally every month. While the industry was struggling to
stop this process, the popularity of music continued to grow.
It seemed that most people instead of paying $ 19 per CD
chose the way they played music. This led to an increase in
demand for MP3s, such as the Apple iPod. Seeing this
growth trend in 2003, Apple decided to open online stores,
iTune, for music-loving with only 99 cents from $ 9.99 that
cost the entire album. This was a very good strategy because
it allowed clients to get individual songs instead of getting
the album.
On the other hand iTune benefits the record companies
and artists because they receive 65% of the price. ITunes
also protects copyrights.
Today, the iTunes Music Store offers more than 8
million songs. iTunes is the biggest seller of music in the
US with sales that exceed 5 billion songs. ITunes Apple has
launched a blue ocean in digital music, with the advantage
of increasing the attractiveness of iPod users.
Take the example of Cajit's British industry. She made
the sale of door-to-door cajners and was successful until a
period without profits. So Philips came to the market with a
new cajnik passing through the blue ocean. Thinking about
improving the complementary products and services, Philips
saw that the British problem was not in the cajners, but in
the complementary water product that had to be stuffed
because water itself contained sand particles and this was
not a problem of industry cajners but public water
distributors.
Thinking about solving the problem, Philips saw this
problem in its favor. So he built a filter cajnike where it was
noticed that the demand for them was coming and growing.
Recalling Ralph Lauren, the American designer who
created the Blue Ocean "height fashion with no fashion" by
understanding the key factors that affect changing customer
demands.
With the creation of the Polo, Ralph Lauren combines
the best features such as (designer's name, elegance of their
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 International Journal of Economics, Commerce and Management Research Studies
Volume 1, Issue 2, September - 2018
shops, and beautiful materials) with the lower price of Make Competition Irrelevant, US: Harvard Business
classic lines not only for existing but also attracting new School Publishing Corporation.
clients to the market. [2]. Porter, M.E. (2008): ‘The five competitive forces that
shape strategy’, Harvard Business Review. Boston:
IX. HOW MUCH BLUE IS THE OCEAN IN WHICH Vol. 86, Iss. 1:78.
YOUR BUSINESS IS LOCATED [3]. http://www.ukessays.co.uk/essays/business/blue-ocean-
strategy.php .
Is your company facing increasing competition from [4]. http://www.blueoceanstrategy.com/index.php .
domestic and foreign competitors?
 Do sales representatives need to make big sales
reductions in order to attract customers and sell their
sales?
 Do you feel you need to do more marketing, but each
dollar you spend is of greater value than the profit from
these dollars spent?
 Has your company focused on cost reduction, quality
control and brand management at the expense of growth,
innovation, and brand creation?
 Do you see outsourcing companies or low cost sites as a
key prerequisite for regaining competitiveness?
 Are the mergers and acquisitions that your company
views as a way to grow?
 Is it easier for you to find funds that support a strategic
move that is alike to your competitor or to provide funds
to support a strategic move that allows you to break
away from competition?

If you answered yes to most of these questions, then

your company is stuck in the red ocean.

X. CONCLUSIONS

The Blue Ocean Strategy offers you a way to swim

outside the Red Ocean, which is filled with sharks. It
represents a theory, ways and structures that allow your
company to get rid of competition and create a blue ocean in
a new market.

The structure and tools presented are essential and can

be applied to allow companies to move away from
competition and create the Blue Ocean in new markets.

Markets have never been constant so the blue oceans have

changed.

Focusing on the Red Ocean means accepting

competition, limiting the scope for creating new markets,
abandoning the opportunity to compete in order to win and
deny the distinctive power of the business world: ability to
create new market spaces.

REFERENCES

[1]. Kim, W. C., Mauborgne, R. (2005): Blue Ocean

Strategy: How to Create Uncontested Market Space and

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