Blue Ocean Strategy

The concept of Blue Ocean Strategy (BOS) was first published in 2005 in a book by W. Chan
Kim. The concept is the end result of year long studies of 150 strategic straddling more than
130 industries over 100 years (1800-2000). It debated that firms can succeed not just by
combating with its rivals, but rather by creating blue oceans of unconcealed market space
or markets that do not even yet exist today. Such tactical moves create a dive in value for
the company, its buyers, and its employees, while releasing new demand and making the
competition immaterial. For instance, cost saving are made by eradicating and plummeting
the factors an industry competes on; consumer value is raised by creating essentials the
industry has never offered.
BOS is the concurrent pursuit of segregation and low cost that helps to achieve sustainable
competitive advantage for the consumer, the company, and its employees. The aim of value
modernization is not to battle, but to make the competition immaterial by changing the
playing field of policy. The strategic move must hoist and generate value for the market,
while concurrently eradicating features or offerings that are less valued by the existing or
future market. A Four Actions Framework is utilized to help create value modernization and
break the value-cost trade-off. BOS recommends finding values that outweigh conservative
market segmentation and offering value and lower cost. BOS stands on Reconstructionists view. Presuming that formation and market borders exist only in
managers minds, scholars who hold this view do not let current market structures edge
their thinking. To them, further demand is out there, mostly untouched.

A perfect example of BOS practice in context of Bangladesh can be Grameen Shakti project.
Grameen Shakti, one of the members of Grameen companies, supplies renewable power
technologies to the countryside poor in Bangladesh. It facilitated the poor to procure biogas
digesters or solar panels which involved a matching set of innovations making it categorized
as a BOS. The panels are accumulated and set up by women given apposite technical
training, also generating employment opportunities. The solar panels provide light at night,
and enhanced fuel-efficient cooking stoves build a healthier atmosphere.
The BOS skeleton include: strategy canvas, value curve, four actions framework, six paths,
buyer experience cycle, buyer utility map, and blue ocean idea index.

The Strategy Canvas: It is a vital analytical tool and an action framework that
diagrammatically detain, in one simple picture, the existing strategic background and
the future projection for a company. For instance, electricity is a key issue in
Bangladesh, especially in rural community. Hence, renewable power technologies, is
a good substitute, it can gain an assured share in the marketplace over its
competitors.

The Four Actions Framework: The Four Actions Framework (raise, eliminate, create,
reduce) is used to re-enact consumer value fundamentals in devising a new value
curve. The Four Action Framework questions:

Raise: Which issue should be raised well above industrys standard?

Eliminate: Which issue that the business has long-competed on should be abolished?
Create: Which concern should be addressed that the business has never presented?
Reduce: Which aspect should be condensed well below the industrys standard?

Figure above showing, buyer experience cycle and buyer utility map.
These structures are premeditated to be visual in order to not only successfully build the
communal astuteness of the company but also allow for efficient strategy implementation
through simple communication.
BOS covers both strategy formulation and strategy execution. The three key conceptual
building blocks of BOS are:

Value innovation: Cost of savings is made by removing and attaining the issues an
industry vie on. Consumer value is raised by constructing essentials the industry has
never offered.

Tipping point leadership: This facilitates managers topple the 4 hurdles to faster
execution and at a low cost by responding to the following queries:

What issues or acts exercise an unduly affirmative influence on breaking the status
quo?

On getting the utmost bang out of each buck of resources?

On stirring key players to uncompromisingly move forward with change?

And on knock down political barricade that often trip up even the best strategy?

Fair process: There are three equally reinforcing rudiments that define fair process:
engagement, explanation, and clarity of expectation. Whether people are senior
executives or shop employees, they all look to these rudiments.

While competitive strategy is a configured theory of strategy where construction shapes

strategy, BOS is a reconstructed theory of strategy where strategy shapes construction. The
foremost task of a firms leadership, therefore, is to decide the suitable strategic approach in
light of confronts the firm faces. There are three aspects that determine the right approach:
the structural conditions in which the firm operates; its resources and potential, and its
tactical approach. Structural conditions are lucrative but players are well-established and the
firm lacks the resources or ability to surpass them.
In essence, as an incorporated loom to strategy at the method level, BOS requires firms to
expand and ally the three stratagem propositions: value proposition, profit proposition and
people proposition. If implemented successfully, firms will have an orientation toward
modernization and compliance to practice new prospects.

(Naimul is currently pursuing his undergraduate major in Finance & Accounting and
Marketing Naimul believes that In order to be a good leader one must first be a good
follower. In the next five years, Naimul optimistically projects himself as a reliable financial
analyst & a dynamic marketing manager making his way upwards in the corporate world. In
the long run, he aspires to be a social entrepreneur addressing the most pressing needs of
society since he believes that one should give back & pass on the good deeds. To know more
about Naimul, visit http://antar-nk.strikingly.com/)