Post on 14-Apr-2018
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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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