Hi Class,

This is regarding a critical analysis of the pros and cons of the Blue Ocean Strategy with
examples. Proper exploration and research in oceans (which are vast, massive, wide, and are
the most baffling natural wonders of the world) can give way to incredible discoveries and
provide information about their scopes and untapped prospects. Similarly, we can unlock the
wider unfathomable, powerful and vast potential in the unexplored market space in profitable
growth by using the Blue Ocean Analogy. This strategic planning theory is different from the
general notion of benchmarking the competition and focusing on lump sum figures.
Before analysis of its pros and cons, let us have clarity about the Blue Ocean Strategy.
When the industries are in a state of inexistence, there is absolutely no purpose of peer
comparison. The strategy secures the new demand by familiarizing special products with
innovatoive features.

In other words, the strategy prompts companies to offer precious products to the customers.
Thus, it supports the firm to incur large profits and beat the competition. The price of the
products are generally kept on the higher side because of their monopoly. Blue Ocean
approach avoids the ideology of outperforming the competition and asserts to recreate the
market boundaries and operate within the promising area.

The kind of management and leadership required to initiate a Blue Ocean Strategy differs
from the management of corporations with short-term objectives and mainly focuses on
increasing shareholder value by lifting up the stock prices through mergers, buybacks, and
acquisitions. The Blue Ocean Strategy can be implemnted in all sectors or businesses and is
not limited to just one kind.

Pros of Blue Ocean Strategy - Here are a few of the advantages of using the blue ocean
strategy:
1. It cooperates with organizations to find uncontested markets, and thereby, matured,
and saturated market is avoided.
2. It helps to move gradually towards constructive value improvement instead of
competing within the existing industry as to cost structure/marketing. In short, it shows
 how to break free from the traditional strategic models and to expand profitability, and
create demand for the industry by using the analysis.
3. Value innovation is the alliance with the innovation of price, utility, and cost positions. It
ultimately creates new value/demand for consumers and thereby expands the chances
of growth potential.
4. It develops mental perspectives and helps in recognizing opportunities.
5. It is based on the proven data rather than unproven theories. Hence, it is based on
practical approaches which have proven results during live market executions.
6. This strategy is ultimate with high payoff possibilities.

Cons of Blue Ocean Strategy - There exist various common cons, as explained below.
1. It is pretty challenging to get futuristic ideas and identify substantial untapped markets.
2. Blue Ocean Strategy results from a calculated and detailed research process backed
by extensive analysis and expenses as well. There is no magic technique or silver
bullet from which we can get a ready-made result.
3. It involves many risks while venturing into a market in the early phase. It is very much
possible that the customers might not understand the grass root of the products and
services in the absence of a fully developed technology.
4. Launching a product to enter into a new market is never an easy task. An organization
must do much groundwork to find its consumers base and ways to educate about new
ideas, new products, and new solutions. Clarity about the obstacles, trade-offs, and the
workforce is also required.
5. While doing so, it is very much possible that other business houses that reached a
saturated market will be lured to the new market. Thus, it needs to build strategically
defensive alternatives. It may include brand power, technological advancement, and
speed of execution.

Examples of Blue Ocean Industry

1) UBER: This Cab service is a brainchild of the Blue Ocean Strategy. The company discarded
the nuisance of booking cabs, denial of services, meter issues, and unwanted arguments, and
thereby It has dramatically transformed the transportation industry.
It is a ride-sharing service that enables customers to book their rides with the ride's estimated
cost by any smartphone/PC through Uber App. It also permits customers to trace a driver’s
progression towards the pickup point in real-time through the medium of an Uber App through
a smartphone.
With the help of modern devices and technology, Uber devised a new market. It differentiated
itself from the regular cab companies and developed a low-cost business model that offers
flexible payments and pricing strategies and generates good revenues for both the drivers
and the company. In the initial stages, Uber successfully captured the uncontested market
space, but now, ultimately, competitors emerged.
Still, it continues to command the market and is speedily expanding across the world. As of
2019, Uber approximately has 110 million riders worldwide and holds 69% of the market
share in the United States.

2) iTunes: Apple entered into digital music with its unique and eminent product, i.e., iTunes,
in 2003. In previous days, conventional mediums like compact discs (CD) were used to
disseminate and listen to music.
When iTunes ventured into the market, it solved the fundamental problems of the recording
industry, i.e., the practice of illegally downloading music that was of high-quality music. All the
available Apple products have iTunes to download music and have ruled mainly the market
space for decades because it offered a reasonable price with this unique feature. It is also
recognized for driving the growth of digital music.
This model departs from the typical management exercise in a nut shell that
focuses on number-crunching and competitive criterion. Rather than striving to gain more
share in an already saturated market, Blue Ocean Strategy is about creating demand in a
growing, uncontested market capturing this uncontested space. Of course, it may not be
feasible in all areas of the business environment.

Regards
Bibhuti

Reference: https://tradebrains.in/blue-ocean-strategy/