RED OCEAN

STRATEGY
Alaras, Chariz
Bobadilla, Arlene
Inocencio, Baby Rose
 RED OCEAN STRATEGY
- is the name of the optimal strategy to follow in a very
Competitive Market.
The concept was invented by W. Chan Kim and Renée
Mauborgne in 2004. 2
RED OCEAN STRATEGY cont…

It involves competing in industries

“A sea that are currently in existence. This
where often requires overcoming an
fishes intense level of competition and can
often involve the commoditization
eat
of the industry where companies are
each competing mainly on price.
other
to
survive
RED OCEAN KEY GOALS

“The key goals of the red

ocean strategy are to beat
the competition and exploit
existing demand.”
DIFFERENCE BETWEEN RED AND BLUE
One Company Dominates
the New Market

Many Companies Compete

with Each Other in the Same
Market

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 4 ASPECTS IN COMPARING RED AND BLUE

The focus The competition The relevance The demand

perspective perspective perspective perspective

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RED OCEAN vs. BLUE OCEAN
CHARACTERISTICS

Red Ocean Strategy Blue Ocean Strategy

© Chan Kim & Renée Mauborgne. All rights reserved.

 ADVANTAGE AND DISADVANTAGES

• The market is • There is usually an

already established market
established. leader who will be
• It is clear what very hard to beat.
products and • There is usually
services numerous niches
customers want. trying to carve out
market share in a
• The company can subset of the total
recruit skilled market.
employees easily
who have deep • Competition is
experience in the fierce.
sector.

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HOW TO OVERCOME COMPETITION

To beat competition companies tend to search for

something that differentiates them from others. It
can be a unique feature, outstanding customer
service, specific target audience or excellent user
experience.
5 TIPS TO BEAT THE COMPETITION
According to Kateryna Mayka

Don’t offer a product, offer a solution.

Find a new target audience.

Consider pricing.

Take care of your employees.

Advertise your products.

 SlideOF
RIGHT STRATEGY TitleRED OCEAN

• DON’T GET OBSESSED WITH YOUR

COMPETITORS, JUST KEEP AN EYE ON THEM.
• NEVER STOP IMPROVING YOUR PRODUCT.

• FIND SOMETHING THAT DIFFERENTIATES YOU

FROM YOUR RIVALS.
• LET YOUR CUSTOMERS KNOW YOUR VALUE
PROPOSITIONS.
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 Porter’s 5 Forces

Try to rise Take special

them. Fight care of your
every new clients. They
player or buy have many
them. SUBSTITUTE alternatives.
SUPPLIERS PRODUCTS COMPETITION

Look for best ENTRY Diversify your CLIENTS Do something

BARRIERS
suppliers. More products to different or
established and increase your better than your
reliable market share competitors.
suppliers and Study them
competitiveness. carefully.
SIX RED OCEAN TRAP
1. Looking to Existing
Customers for Insight into
Creating New Demand

2. Treating Market-
Creating Strategies as
Niche Strategies

3. Confusing Technology
Innovation with Market-
Creating Strategies
SIX RED OCEAN TRAP cont…
Click icon to add picture

4. Equating Creative
Destruction with Market
Creation
5. Equating Market-Creating
Strategies with Differentiation
6. Equating Market-Creating
Strategies with Low-Cost
Strategies

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RED OCEAN STRATEGY EXAMPLES
RYANAIR (and other airlines)
-competing very successfully in the already
saturated red ocean of the short-haul
airline business
Competitors:
Lufthansa Group, Finnair, easyJet, Flybe,
Norwegian Air Shuttle, Pegasus Airlines,
Vueling Airlines and Wizz Air
How did they take action:
• providing a low-cost no-frills airline through
many methods
• the service isn’t great of differentiated in
some way from other carriers, but it is cheap.
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RED OCEAN STRATEGY EXAMPLES
SAMSUNG TV
Competed with SONY, Grundig, LG,
Panasonic, etc.

How did they take action:

• They have focused on developing only High
Quality TVs, especially in the last decade
with their flat TVs.

• They didn’t launch a revolutionary product

or a product with a particular peculiarity
(like Apple did with the iPhone).
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RED OCEAN STRATEGY EXAMPLES
IPHONE
Mobile phone industry was very
competitive in 2007 with Sony, Ericsson,
Motorola, NEC, Alcatel, etc.

How did they take action:

• developed a much better mobile phone,
which was years ahead of its
competitors
• Apple’s first touch screen Supplier was
Samsung, which is not bad.
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RED OCEAN STRATEGY EXAMPLES
FIVE GUYS
Competition in the Fast food Industry is
extremely fierce:
• Aggressive prices and discounts.
• New Products released every week.
• Expensive commercials at Sporting
events.
How did they take action:
• Good burgers in an Old style restaurant.
• Its quality was notably superior to that
of its Competitors.
• The company’s low profile (no big
commercials) conveyed authenticity.
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RED OCEAN STRATEGY EXAMPLES
BOSE
BOSE is a good example of “how a small
company can succeed in the fiercest market
of all, THE TECHNOLOGY MARKET”.
Competitors:
Panasonic, SONY, Samsung, Apple

How did they take action:

• they have only focused on Audio Equipment;
and
• within the Audio Equipment sector, they
have a Diverse Range of Products.
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OTHER EXAMPLES OF RED OCEAN CO.

HIMALAYA DELL AMAZON DOVE

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THANK
YOU!
Alaras, Chariz
Bobadilla, Arlene
Inocencio, Baby Rose