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Discuss the Blue Ocean vs the Red Ocean Strategy and give at least 5 points of differentiation between them.

Home, - Discuss the Blue Ocean vs the Red Ocean Strategy

Question - Discuss the Blue Ocean vs the Red Ocean Strategy and give at least 5 points of differentiation between them. Explain using an example of a company, service or product what the Product Changes (at least one per product change) are which makes this a blue Ocean strategy company, product or service.

Answer -

Red ocean strategy

Blue ocean strategy

In this strategy, the company pursues its business in the already existing market space

In this strategy, the company pursues its business in the new and uncontested market space.

There is a lot of competition faced in this as the company is pursuing business in existing market space and therefore, the company focus on gaining the competitive advantage

The company does not focus on gaining the competitive advantage

Here the trade off between the value and the cost is the important part of the strategy.

Here the trade off between the value and the cost is not considered.

This strategy makes thee use of the existing demand.

New demand is required to be created in this strategy.

The company can choose between the product differentiation strategy and the product low cost strategy in this.

There is no choice between the product differentiation strategy and the product low cost strategy in this.

Example: Netflix, Uber

Example: Ryanair which is a European Airline operator.

Netflix Company is using the blue ocean strategy.

Name of the company

Netflix

Eliminate

The company did not compete with the existing giants in the market on the basis of the price or the better choice for entertainment.

Reduce

  • The existing giants demanded the return on time and late fees but it reduced those scenarios.
  • The customers of the Netflix were able to keep the DVD as long as they want without worrying about late fees.
  • The need for going outside the house for renting the DVD was reduced

Raise

  • Flat monthly payment model to watch all the videos
  • Renting video at the comfort of home using internet.

Create

  • Created new kind of DVD rental serviceon online platform
  • Created new model of monthly payment
  • Creating own videos and movies
  • Unlimited video streaming by paying the flat monthly fee.


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