University Mohammed V

FSJES-Sale El Fadil Sara

Option : Finance and Banking

The relationship between low demande and high supply :

Low Demand: When there is limited consumer demand for a product or service, it means that people are
not willing to buy it at a higher price. This results in a downward pressure on prices because businesses are
motivated to lower their prices to attract customers. Low demand can be caused by factors such as a weak
economy, changing consumer preferences, or the availability of substitutes

High Supply: When there is an abundance of a product or service in the market, it typically leads to
increased competition among suppliers. Businesses may produce more of the product than there is demand
for, leading to excess supply. To reduce their inventories and avoid waste, suppliers often lower their prices
to encourage sales.

the intersection of low demand and high supply often leads to a drop in prices. The degree of price
decrease can vary depending on the specific market and product, but the general trend is for prices to go
down in response to these conditions. This situation is often referred to as a "buyer's market" because
consumers have more bargaining power and can benefit from lower prices.

What is the Blue-ocean-Market :

A "Blue Ocean Market" is a concept introduced in the book "Blue Ocean Strategy" by W. Chan Kim. It
refers to a market space or industry where competition is low or non-existent, and where a company can
create new demand and achieve sustainable growth and profitability by innovatively differentiating itself
from existing competitors. In contrast, a "Red Ocean" represents a saturated and highly competitive market
where companies compete primarily on price and traditional factors, often resulting in stagnant growth and
limited profits.

Here are some key characteristics of a Blue Ocean Market:

1. Low Competition: In a Blue Ocean, there are few direct competitors or alternatives. This lack of
competition allows companies to carve out their own niche without constantly battling with rivals.
2. Targeting New Customers: Blue Ocean companies often identify new customer segments or
untapped markets, expanding the customer base rather than competing for the same customers as
existing players.
3. Risk and Reward: While Blue Oceans can offer substantial opportunities, they also involve risks, as
there may be uncertainty about whether the innovative approach will gain traction. However, the
potential rewards can be significant if a company successfully creates and captures value in a Blue
Ocean.

The Blue Ocean Strategy concept encourages businesses to seek opportunities in unexplored or
underserved markets, where they can thrive by offering unique and value-creating solutions. This approach
contrasts with the traditional "Red Ocean" strategy, where companies compete in overcrowded markets
with little room for innovation or differentiation.