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How to create a new market and be out of competition

 

How to create a new market and be out of competition

How to create a new market, The Blue Ocean Strategy book had a huge impact worldwide, with over one million copies sold within its first year of publication and translated into 93 languages, breaking Harvard publishing's record for the fastest-selling printed book.


How to create a new market


The book is written by professors W. Chan Kim and René maubourg, of INSEAD College, which is one of the leading and largest educational institutes in business administration, its main campus is located in Fontainebleau, France. In the run-up to writing this award-winning book, Kimo mauburgen spent 15 years studying the strategic moves of more than 30 industries from 1880 to 2000.


Competition has-traditionally-been at the heart of corporate strategy, country versus Country, company versus company, even a business school versus another. The main question is how can a company to outperform its rivals? Competitive strategy and excellence was born at Harvard Business School, with a constant focus on competition. The basic roots of this concept can be traced to military strategy, even the vocabulary used by companies can be traced to the military, words such as “executive officers”,”headquarters”,”troops” and”front line” are often used in corporate settings. There is a strategic rule that if you want to gain market share you have to take something from your competitor, or in other words, you win and they lose, which is known as the zero sum game.


In this traditional view of strategy, construction is assumed to be static and specific, where the medium or environment and conditions are predetermined and cannot be changed by the efforts of a company. This strategy has already been competitors to win a greater share of the economic pie, Ltd. "But when we look at the industry, who do we like more? You are those who outperform their competitors? Yes, we admire the winners, but we admire more people who create new models, businesses, new markets, that's what expands the cake of intellectual and Creative Wealth, in other words creating a non-zero-sum game.” This shift from win - loss to win - win, is the core of Kim and mauborgan's Blue Ocean Strategy.


According to Kim and maoborgen, the markets consist of red and blue oceans. The red ocean represents the known market space, where all industries are currently located, in this space is defined, defined and accepted all boundaries, and companies try to outperform each other, but the more crowded the market space the less the possibility of profit and growth.


On the contrary, blue oceans represent an untapped market space, characterized by the creation of demand and highly profitable growth opportunities. Kim says: the Blue Ocean strategy goes beyond competition by opening a larger “cake”. In contrast, the Blue Ocean Strategy is based on the idea of restructuring, where companies can shift the production front outward by reshaping the boundaries of the market to create a larger economic cake.


Blue Ocean Strategy Red Ocean Strategy


Create an undisputed market space that competes with the existing market space


Make the competition irrelevant beat the competitors


Focus on those who are not customers focus on existing customers


Create and seize a new order take advantage of the existing order


Break value and price swaps (make better value at a lower price at the same time) use value-price swaps (make better value for customers at a higher price or make moderate value at a lower price)


Rank each system of company activities to seek excellence and lower price rank each system of company activities with its strategic choice of excellence or lower price


The book gives practical examples, provides tools and concepts, and also lays the foundations for reconstitution theory. It presents the key to creating new market spaces, by synchronizing the pursuit of excellence and low cost. This allows a company to create a new curve of value: for example, Cirque du Soleil eliminated animals and show stars from the show, reducing the cost structure and creating a whole new element of artistic dance and music to achieve excellence. For the circus today 19 tours and shows held around the world in famous venues such as Las Vegas and Tokyo, Cirque du Soleil earns more than a billion dollars each year.


“Connecting the Cirque du Soleil more than a billion dollars each year”


Kim and maoborgen's work is both “administrative and theoretical” and can be used at every level: national-to improve social and environmental wealth - and also on a personal level. Blue ocean markets can be created in all walks of life, not just in technology-based businesses .


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