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On Blue Ocean Strategy

Essay by   •  January 14, 2013  •  Essay  •  301 Words (2 Pages)  •  1,487 Views

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ARTICLE CRITIQUE ON BLUE OCEAN STRATEGY

Pros: Blue Ocean strategy is often flexible, less competitive and moves towards the needs and wants of the customers and markets. It's an excellent strategy for small- and medium-sized businesses. New markets are created to serve. Being the beginner in the industry the company or product has a great leverage of capturing the market and even being the price maker. This strategy is perfect for companies that know how to use their marketing and communication effectively. Smaller companies can obtain lots of publicity quickly by using this strategy. The focus is more on costumers. Create and capture new demand. It aligns the system of a firm's activities in pursuit of differentiation or low cost. In red ocean strategy the focus is on existing customers. It aligns the system of a firm's activities with its strategic choice of differentiation or low cost.

Cons: A marketing budget comes very handy but many small- and medium-sized companies don't have one. It's difficult to create a blue ocean without the knowledge and experience of marketing and communication. The first and foremost weakness would be that there is a great chance of consumer's rejection which might create problems. For big companies it's harder to manoeuvre or change, to get a new strategy working in the complete company as soon as possible. There is a possibility of substitutes being produced. As the market being new it will hard to have a proper forecast. The risk involved is too high. The main weakness in Red Ocean is that the company is in the price taker position. There is high risk involved in the market. As there is free entry to the market the competitions increases every single day and companies should come up with new and innovative strategy to sell the product.

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