BLUE OCEAN STRATEGY

- Nivethitha S (1913066), PGDM I - A

Blue Ocean strategy is a theory of entering into less competitive or a new market
space to enjoy a monopoly at least for a short duration until other players catch up..
There is a greater level of competitive advantage with minimal costs due to the first
mover advantage. Whereas in Red ocean, there is an excess supply when
compared to demand and a hyper competitive market exists with competitors
slashing prices and offering deep discounts to gain the maximum market share.

A company with a new business model, introducing an innovative product or service,

that is not available elsewhere, is said to have entered a blue ocean. Instead of
competing in an existing market, finding new markets to market their products is the
key differentiator in this strategy. Instead of having to choose between Value and
Cost, in a blue ocean, the aim is value maximization and cost minimization. This
creates a value innovation benefiting both customers and company.

Most successful startups in India operate in the Blue Ocean.

Nykaa (2012):
Making use of growing affinity towards cosmetics among Indians, their huge
disposable income and the ever growing international brands in beauty and
wellness, Falguni Nayar decided to start a unique e-commerce platform catering
solely to the beauty needs of Indians. There are very few players in the Indian
market like Purplle competing with Nykaa, making Nykaa have a competitive edge
and have the maximum market share in the Cosmetics segment.

Oyo Rooms (2013):

Giving key importance to the value innovation in Blue Ocean strategy, is
Oyo’s mantra. Eliminating the fancy facilities and retaining the hygiene and
predictability aspect draws budget travelers. This reduces the costs incurred, price of
room but increases the value for customers.