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7/28/2019 Blue Ocean Stratgy(1) (1)

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Blue Ocean StrategyHow to Create Uncontested Market Space and Make the

Competition Irrelevant

Kiran AdkarNikhil Bhosale

Kartik VariyaBhagesh GharatYogesh Bhavekar


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Authored by W. Chan Kim and Renee Mauborgne in 2005.

Based on a study of 150 strategic moves spanning more than 100 years

and 30 industries.

BOS is the simultaneous pursuit of differentiation andlow cost.

The aim of BOS is not to out-perform the competition in the existingindustry, but to create new market space or a blue ocean, therebymaking the competition irrelevant .


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BOS offers systematic and reproducible methodologies and processesin pursuit of innovation by both new and existing firms.

BOS frameworks and tools are designed to be visual in order to not onlyeffectively build the collective wisdom of the company but also toeffectively execute through easy communication.


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Red Ocean Strategy Blue Ocean Strategy

Compete in existing market space

Beat the competition

Exploit existing demand

Make the value-cost trade-off

Align the whole system of a firms

activities with its strategic choice

of differentiation or low cost

Create uncontested market space

Make the competition irrelevant

Create and capture new demand

Break the value-cost trade-off

Align the whole system of a firms

activities in pursuit of

differentiation AND low cost

Difference between Red Ocean

Strategy & Blue Ocean Strategy


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Reconstruct market boundaries

Focus on the big picture

Reach beyond existing demand

Get the strategic sequence right

Overcome key organizational hurdles

Build execution into strategy


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Strategy Canvas

Eliminate-Reduce-Raise-Create (ERRC) Grid


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Degree of which each comp et itoroffers/invests in each factor Value Cu rves

Factor

that

indust ry

compete

& invest ,

also

potent ia l

area

where

consumer

valued

could be

created


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Eliminate

Price competition Seat selection Free food & beverages

Raise

Quality of safety Point to point flight

Reduce

Air fare Stopover time

Staffing ( ground & air )

Create

Web registration Express boarding

Budget hotel


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Infosys adopted Blue Ocean strategy with focus on healthcare.Government vertical & expansion into emerging markets India andChina.

Focus government vertical Infosys was hold Rs.700-750 cr for financialservice system integrator contract from DOP & rural information & alsocommunication technology system integrator contract of Rs.100 cr.

Focus on healthcare with help of BOS Infosys has set up subsidiary in

US for serving government and healthcare customers in 2009. Infosysis about to acquire Thomson Reuters healthcare division in a US$700-750 million transaction in US which will be the best option for Infosysto gain revenues in this vertical segment.


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Expansion in China and India is another Blue Ocean Strategy ofInfosys. Accordingly Infosys is planning to increase the headcount at its

India business process outsourcing (BPO) unit by five-fold to 2,000 inone year. In China, Infosys is planning to triple its staff headcount to10,000 in 2-3 years.


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blue ocean stratgy(1) (1)

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