INTRODUCTION
In this concluding chapter, we address the issues of the sustainability and renewal of blue ocean strategy. Creating a blue ocean strategy is not a static achievement but a dynamic process -Blue Ocean Strategy: How to Create Uncontested Market Space and Make
the Competition Irrelevant, W. Chan Kim and Renee Mauborgne, 2005
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INTRODUCTION
After a company creates a BLUE OCEAN and its powerful performance consequences are known sooner or later imitators appear on the horizon.
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This raises a related question: When should a company reach out to create another BLUE OCEAN?
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BARRIERS TO IMMITATION
A blue ocean brings barriers to imitation; some being operation and others cognitive
BARRIERS TO IMITATION
A
value innovative move does not make sense based on conventional strategic logic
y
EX: CNN
Brand
BARRIERS TO IMITATION
Natural
monopoly blocks imitation when the size of a market cannot support another player y EX: Megaplex in Brussels Patents or legal permits block imitation
BARRIERS TO IMITATION
Politics and Culture: Imitation often requires companies to make changes to existing business practices and culture
Ex: Southwest (offers speed of travel with cost/flex. of driving) y Would mean major revisions in routing, training, marketing, and pricing
y
BARRIERS TO IMITATION
Network externalities: the more customers, the more attractive a company looks
y
Ex: ebay many buyers/sellers; hard to get them to move to a potential imitator
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As long as value curve still good a company should focus on operation improvements, geographic expansion, economies of scale and market coverage. As more competitors enter the market and rivalry intensifies a blue ocean will turn red.
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This can be seen by plotting you and your competitions value curves on a strategy canvas. As they converge a company should start looking for a new blue ocean.
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Via value-innovation
THE
SWIM as far as to DOMINATE the BLUE OCEAN over your IMITATORS for as long as possible!
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