AGRI90094 Managing Innovation and Change

Blue Ocean Strategy

The term "blue ocean strategy" refers to a demand for a commodity that has little or little rivalry. This approach is based on identifying a market with a small number of competitors and little price pressure. Blue Ocean Strategy is applicable through industries and enterprises. It is not restricted to a single kind of industry (Sindhu, 2018). It is predicated on the premise that business lines and business structure are not fixed in stone and may be reconfigured by the activities and views of industry participants.

In dynamic markets

Blue ocean strategy is a business strategy that requires Cirque de Soleil to think outside rivalry by generating new uncontested market room, or Blue Ocean, that renders existing competition obsolete. It is about increasing demand and differentiating yourself from the market.

There are many explanations for the growing need to create blue oceans:

1. Rapid technical advancement has increased manufacturing production significantly and enabled manufacturers to manufacture an unparalleled variety of goods and services. Therefore, a growing majority of sectors are seeing a surplus of supply over demand (Alam, & Islam, 2017).
2. As the movement toward globalisation continues, trading gaps between nations and territories will be reduced, and as knowledge about goods and pricing becomes readily and internationally accessible, small markets and shelters for monopoly will begin to dwindle.
3. There is little convincing proof of global demand growth, and figures lead to demographic declines in a number of emerging economies.

Apart from intensifying market wars and declining profit margins, the convergence of both of these forces has resulted in an acceleration of goods and service commoditization. Blue Ocean Strategy is about going past a particular industry's conventional consumers. It is about developing a commodity that will cope with the competition. Three critical components are essential for a good transition (Mi, 2015).

Embracing a blue ocean outlook — Cirque de Soleil that embrace the Blue Ocean Strategy have a unique way of thinking. They pose distinct concerns. They innovate in a variety of forms. They take a particular path to the value-cost frontier. That is a widened range of vision.

Practical business building techniques — these tools assist in challenging preconceived notions. They assist in identifying potential consumers and sources of request that others can overlook or disregard. It serves as a roadmap for assembling the best team possible to carry out the transition.

Using a humanistic approach — the status quo is maintained by culture, individuals, and procedures. The internal tension occurs during the process of transitioning to a blue ocean, whether it is institutional, systemic silos, or infighting. Assuring that the change incorporates mechanisms that ease the humanistic aspect enables more effective implementation.

Blue Ocean Strategy provides an overview of the concept, tools, and case studies necessary to begin thinking regarding blue ocean strategy (Sheehan & Vaidyanathan, 2009). It begins the trip through less competitive waters with the aim of increasing revenue and benefit. Building from these concepts, Blue Ocean Change discusses what it takes to enable the transition to blue oceans. It delves further into the plan, the resources, and, most importantly, what it means on the human side to successfully perform a blue ocean transition.

Real-Life Business Situation

Cirque de Soleil is perhaps the most well known representation of a blue ocean plan in motion. The business was established in Canada throughout the early 1980s and has since entertained over 155 million people across over 300 cities (Cirquedusoleil, 2021). How is this accomplished? Cirque du Soleil reimagined the circus business with a strategy of cost containment and distinction. Through eliminating live animal performances, the organisation was able to lower its costs, whilst including live music, a plot influenced mostly by world of theatre, and a focus on human physical ability allowed Cirque du Soleil to produce previously unseen elements in the circus world (Cirquedusoleil, 2021). Cirque du Soleil thus provided a new retail room. Adults and business customers (rather than the typical family audience) are now able to offer a premium to see this incredible spectacle.

Four Actions Framework Application

The Four Actions Framework may be used to change a product's market position. According to Kim & Mauborgne, writers of Blue Ocean Strategy, the system may also be used to optimise established goods. To accomplish these objectives, both Cirque de Soleil must recognise four points:

Raise

Is it possible to boost certain current product characteristics (competitive factors) in such a way that they would have additional market value? In other words, the characteristics have the potential to establish new market norms or trends.

Reduce

In the alternative, are there any other components that can be diminished or omitted if their relative worth or expense does not warrant the means? Perhaps such conditions erode earnings or erode a Cirque de Soleil's competitive edge?

Eliminate

This entails eliminating factors that consumers compensate for as part of an established status quo that market players profit from. The wine industry promotes the ageing properties of wine as well as the technical jargon used to define it in order to increase the final product's worth. Competitive considerations that bring more benefit can involve wine club deals or directed tours of the winemaking method.

Create

Is there an incentive to introduce everything novel to the marketplace that more effectively addresses a business dilemma than a rival offering? Rather than making complicated bottles with complex explanations, a winery might create a wine that was enjoyable, unpretentious, and simple to consume at an affordable price.

Six Paths Framework Application

The six pathways process for developing blue ocean strategy is as follows: (1) Examine alternate markets, (2) Examine competitive classes inside a sector, (3) Examine customer groups, (4) Examine compatible product and service products, (5) Examine an industry's functional-emotional focus, and (6) Examine time to shape patterns.

Path 1: Look across alternative industries

The first step in developing a blue ocean plan is to identify the sectors that compete with yours. To begin comprehending this course, let us first define the terms replacement and alternative. Substitutes are goods or services, which have a different appearance but perform the same purpose or have the same basic utility (Blueoceanstrategy, 2021). Alternatives are goods or services, which are functionally and aesthetically distinct and have the same reason.

Path 2: Look across strategic groups

Strategic groups within industries are associations of Cirque de Soleil that have a common approach. Strategic groups are organised hierarchically according to two criteria: price and efficiency (Sheehan, & Vaidyanathan, 2009). Thus, a Cirque de Soleil must examine why investors swap up for the higher specific sector and downward for the lower specific sector.

Path 3: Look across Buyer Groups

In the majority of markets, competitors align behind a similar image of the ideal customer. However, there are a number of consumers that are either actively or implicitly interested in purchasing choices, including the following:

• Customers who make a purchase of a good or service
• Users that already use the goods
• Influencer marketing who play a part in decision-making
• Traders are intermediary sellers.
• Regulators that have an effect on purchasing decisions

Thus, a blue ocean process is designed by determining who the industry's chain of customers is and if buyer party your industry normally targets. 

Path 4: Look across complementary product and service offerings

Cirque de Soleil must consider what occurs before, throughout, and after users utilise the goods (Cirquedusoleil, 2021). In the majority of markets, competitors converge mostly on service and product products of their industry (Kim & Mauborgne, 2005). By gaining an awareness of the environment in which your goods or services is utilised and what occurs prior to, before, and after, you may recognise customers' pressure points (constraints) and alleviate them with a complimentary market offering.

Path 5: Look across the functional-emotional orientation of an industry

Purchasers' Emotional Appeal applies to the emotional utility derived from the consumption or usage of a good or service. Competition continues to gravitate toward one of two potential appeals. This are to be questioned in the development of blue ocean strategies. The term "functional usefulness" applies to the functional value that consumers derive from Cirque de Soleil or product/service focused on simple utility and price calculations. In most industries, competition appears to concentrate on one of two potential points of appeal. By recognising whether the industry places a premium on functionality or emotional appeal, you will perform on emotional appeal by removing functional elements or even on compatibility by incorporating emotional elements.

Path 6: Look across time

Most of us respond to market developments as they grow. In other words, we develop reactive strategies that enable us to respond to changing circumstances in Cirque de Soleil. Both sectors are influenced by global factors that have an impact on their operations over time.

Conclusion

By launching a commodity with superior functionality, the blue ocean approach seeks to catch fresh interest and render rivalry obsolete. It enables the corporation to earn enormous profits because the commodity can be priced very high due to its special features. It is the achievement of differentiation while maintaining a low cost structure that allows for the creation of new market room and demand. It is about establishing and winning uncontested market room and thus rendering competitors obsolete.

References

Alam, S., & Islam, M. T. (2017). Impact of Blue Ocean Strategy on Organizational Performance: A literature review toward implementation logic. IOSR Journal of Business and Management, 19(1).

Blueoceanstrategy. (2021). Home Page. Retrieved May 25, 2021, from https://www.blueoceanstrategy.com/

Cirquedusoleil. (2021). Home Page. Retrieved May 25, 2021, from Cirquedusoleil: https://www.cirquedusoleil.com/

Kim, W., & Mauborgne, R. (2005). Value innovation: a leap into the blue ocean. Journal of business strategy, 26(4), 22-28.

Mi, J. (2015). Blue ocean strategy. Wiley Encyclopedia of Management, 1-1.

Sheehan, N., & Vaidyanathan, G. (2009). Using a value creation compass to discover “Blue Oceans”. Strategy & Leadership, 37(2), 13-20.

Sindhu, R. (2018). Blue Ocean Strategy. Journal of Social Welfare and Management, 10(2), 237.

Vieira, E. R. M., & Ferreira, J. J. (2018). Strategic framework of fitness clubs based on quality dimensions: the blue ocean strategy approach. Total Quality Management & Business Excellence, 29(13-14), 1648-1667.

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