Red Ocean Strategy vs. Blue Ocean Strategy
Marketing sector now benefits from two quite different strategies Red Ocean Strategy and Blue Ocean Strategy. The differences between these strategies are very large. Red Ocean Strategy is a strategy widely used around the world. Most companies used foundation of this strategy to defeat the competition. Companies using this strategy still fighting for luring new customers with promotions and big discounts on their products. Quite a different strategy Blue Ocean Strategy is where the fight for customers is not so big. The assumptions of this strategy rely on this to the client wanted the same product for a higher price. Apple is a company that best uses this strategy. Apple boss Steve Jobs is an example of how to use the strategies in the best possible way.
What is blue ocean strategy?
Blue Ocean Strategy is one of the latest business ideas in the world. It was created quite recently, but immediately gained recognition among experts the presidents and directors of many companies. Blue Ocean Strategy is a strategy that differs significantly from the other strategies. Concept Blue Oocean Strategy is based on a finding of "Do not fight the competition issues to become irrelevant." Trusting the old principle, which says that the simplest solutions are best for you. Apple is the biggest company benefits from Blue Ocenan Strategy, using the assumptions of this strategy.
Apple is a company producing computers, laptops, media players, phones and programs. All Apple products are different from competitive products, quality of workmanship, materials used and the particular simple design. Steve Jobs has created a different brand from competitors that attracts customers. Apple is great at using the Blue Ocean Strategy. Apple is the biggest competitor to such companies as Microsoft, IBM, Hewlett-Packard, Dell.Steve Jobs main objective was to create a luxury brand with a classic design of its products. Apple products have excellent performance, reliability, and high price Apple products are not as advertised as the competition but the whole world is waiting for new technology which is usually a pioneer Apple.
Apple from the beginning uses Blue Ocean Strategy in such a way to achieve excellent sales results for its products. Customers are delighted to use the products of the brand.
Characteristic Blue Ocean Strategy
· Create uncontested market space
· Make the competition irrelevant
· Focus on non-customers
· Create and capture new demand
· Break the value-cost tradeoff
· (Seek greater value to customers and low cost simultaneously)
· Align the whole system of a firm’s activities in pursuit of differentiation and low cost.
· Tension builds before the release of a new product
· The higher price than the commercial products
· Better performance of their products
· Innovative technology
What is Red Ocean Strategy?
Red Ocean is a space all of these markets, which are already discovered and developed. It is their struggle for each percentage point of market share. The Red Ocean, players want to produce products and provide services cheaper and better than the competition. His theories are celebrating the success of improving employee productivity and production efficiency. But, over time, improving efficiency is becoming more expensive and more difficult, in addition, the competition is doing the same thing, and ultimately the whole industry is like a headlamp in place.
Red Ocean Strategy is a strategy designed to gain the greatest possible number of customers and to sell as many of their products. These companies advertise their products in every way possible. The fight between the two companies is a constant. Some of these companies are trying to create exclusive product lines to increase the range of the brand.
Characteristic Red Ocean Strategy
· Compete in existing market space
· Beat the competition
· Focus on existing customers
· Exploit existing demand
· Make the value-cost tradeoff
· (create greater value to customers at a higher cost or create reasonable value at a lower cost)
· Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost
· Every percent in market is very important
· Strong fight about customer
· Big competition amid companies
Red Ocean is World merciless competition and fight for the customer.
Company using Red Ocean Strategy
• Polish market mobile cellular
- Orange
- Era
- Plus
• Global market computers
- IBM
- Dell
- HP
- Asus
If anyone would like to learn more about Blue Ocean Strategy recommend this book.
What do you think about these strategies? What do you thing about Blue Ocean Strategy? What do you think about Apple? Please comment.
author: Filip Podgórski
something goes wrong with left margin from the "Characteristic Blue Ocean Strategy" sentence, anyone of you have incomplete words like me?.
ReplyDeleteBut go back to your questions, I am not a Apple fan with the exception of iPod. Especially sometimes I do not understand for what people loves the iPhone.
But what the Apple has done is great (I mean their market success) - often people can choose cheapest product, but they still want the Apple's one even if the performance did not differ significantly.
And about the strategies, both is good but in special market sector, you know we can't forget about our customers if we are GSM provider, also company like Apple must be focused on new customers, if not they will stuck.
You're right but taking into account such Leopard which is a system without an emergency, and for it is people love Apple and its competitor Windows hangs on the presentation. On systems with the OS family of viruses which do not arise is a big plus. Windows runs on all computers and the OS only on Apple machines.
ReplyDeleteI wonder why everyone says Leopard is much more stable. I don't want to make an offtopic here but Windows is lastly a really great OS. I cannot remember when was the last time it hung or got a virus, even though I make different things that could be possibly harmful.
ReplyDeleteTalking about marketing. Although my sympathy for Apple is a little 'limited' I must admit that their PR is one of the best I've ever seen. It makes their product's disadvantages look like an advantage and it really works :)
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ReplyDeleteTo me, Piotr used good explanation, that I agree with, of these two strategies.
ReplyDeleteNow I’d like to focus on Apple products and its customers. People blame Microsoft for instability of Windows but they don’t seem to notice that it is caused by other factors like:
- Drivers (which are delivered by hardware producers). Apple cannot be upgraded in such a way as PCs so there is no problem with unstable drivers.
- Viruses (there are much more viruses for Windows because the popularity of Windows is much much much higher (more than 90% of OS market) than of Apple systems)
Typical apple’s customer (apple fan boy) looks like this: http://revelationroom.files.wordpress.com/2009/04/machug1.jpg
They lose their minds and they can’t see anything but Apple. They don’t believe other producers would offer better functionality, reliability, design and MUCH more (just take a look at HTC products).
And look at the prices. In Poland people used to think that Apple is a luxury good because of high price but they don’t recognize that the cost of making e.g. iPhone is several times lower than its market price. Steve Jobs should receive Noble Prize in economics – “how to sell a sh*t in freaky price”.
Very interesting post. Obviously the blue ocean strategy is from many points of view a better choice but I think that you're underestimating a power of marketing in case of Apple example. The fact is that 50% of Apple is a design and UI evolution and the second 50% of marketing buzz.
ReplyDeleteThat's why every article about Apple is followed by a flame war between PC and Mac fanboys everytime whose arguments are senseless.
What's more - I would say that Apple uses some ideas of red ocean strategy. Doesn;t ir mark out the line between privileged ones that can buy it with bigger price and those who can't afford it or don't want it? It definitely does.
You are right that Windows is more used because it is a universal OS only runs on Apple products, I know that the Core 2 Duo and Atom processors can be put OS. As for exclusive products in my opinion is that Sony Vaio is no different and the price is higher than the Mac. In my opinion, a company that makes very good computers and good price that Dell collects for this very good feedback from users and tests. Coming back to the Apple iPod is famous was created by Creative but Jobs bought it and earned millions of dollars on this.
ReplyDeleteI see that we can divide the camp of fans anti-fans of Apple :D. I think I'm somewhere in the middle. I would like to say something about the Leopard OS – you're right that is safe, but what would have happened if he had such versatility as Windows? All programs pass Apple, hardware is their so how the OS would not be safe?
ReplyDeleteMarek told that UI evolution is the fact - I agree with that but this is probably the only thing that I like in Apple.
I would buy a Leopard but not the whole computer – only OS and as a programmer I hate the IPhone I think ;). Also I hate the Windows but I must using it, if I had the opportunity I would only use Linux (you know freedom, etc. :D). I know that the Leopard OS is similar to Linux OS but in the last case I not need to buy new hardware to use it.
I wrote earlier that it is no longer able to use Leopard on a normal computer but you have to have the processor know that the Atom Core2Duo and Quad is possible and we can enjoy the use of Leopard:) I know that the MSI Wind's Atom processor works great:)
ReplyDeleteTo begin with I wanted to say that I prefer companies using Blue Ocean Strategy. I find them more quality demanding and rather focusing on developing products to a peak of superiority than on constant exploring markets for new, uncontested space. It's a common knowledge that clients who stick to a single company for years can benefit a lot, mostly thanks to loyalty programs. Unfortunately, Polish companies don't care about loyalty programs that much. I think it's due to the fact, that the majority of customers consider the current price to be the most important aspect.
ReplyDeleteAbout the Apple company... I share the opinion about the "Apple fan boys". E.g. iPhone, in my opinion, is just a toy with a sleek design - like a shiny tamagotchi ;) I would never buy one and I think that most of my friends who are interested in technologies wouldn't as well. iPhone is not a smart phone and it's price should not be even close to it.
Well I'm biased against Apple products since I had first contact with them in gymnasium, it was terrible.
ReplyDeleteBut going back to the company strategy in my opinion it's not the blue ocean strategy but rather very good marketing that makes people see Apple's product as unique, exceptional better etc.
If you look at their products and compare the hardware you can see that if you buy their products you pay a lot just for their marketing, not for the quality.
They create some sort of virtual reality with shiny Apple products and old unfashionable and crashing products of their competition.
But well I haven’t experienced any blue screen on my Windows since about 3 years.
“how to sell a sh*t in freaky price”
ReplyDeleteI absolutely agree with s4504. But in my opinion "how to sell a shiny sh*t in freaky proce" : )
For us as customers the red ocean strategy is much more attractive.
Business topics are not for me. Apple is a great company because it creates products that consumers not just want to buy. They have to buy it. Their flag products are selling like hot cakes. I don't own any of these, but each of them is at least a big step ahead in its part of market. It's great to see that phones are now more and more user-friendly thanks to iPhone. Same thing now comes with an iPad.
ReplyDeleteI used to work for PTC Era, where Red Ocean Strategy is used and this strategy doesn't work as you wrote. There is big mess. Fight for a client coses pressure from business to came up with new offers even if the technical aspects of such changes aren't to meet.
ReplyDeleteFore me Blue ocean strategy is revelation! We use it in ouer company.
ReplyDeleteWhat about Apple?? hmm it's blue ocean strategy company;) They devices presentations are very interesting and we can learned from them.