Gaucong in Finland

Gaucong in Finland

Blue Ocean Strategy

It was made fashionable in the '80s by

Michael Porter in his classic text, Competitive

Strategy (1980), in which business is

acknowledged as a competitive battle in

which strategy is essential to winning.

Competitive advantage could either be

achieved by low cost or differentiation. Since

only one brand can be the cheapest, and

physical product attributes are easily copied, it follows that differentiation is the key to

competing in today's marketplace. Brand

strategy therefore is a course of action to

differentiate an organisation or a product in

stakeholders' minds.

To better understand the sustainable development attributed to the application of Blue ocean strategy, it's appropriate to know what Red ocean strategy is and the differences between these two strategies.

This strategy was first introduced in the book "Blue Ocean Strategy" (W. Chan Kim, Renée Mauborgne, Harvard Business Press, 2005). This is a theory break from the competition. It challenges one of the most commonly accepted dogmas of competition based strategy: that of the value-cost trade-off.

In classic business conception, business is acknowledged as competitive battle in which strategy is essential to winning (Michael Portal, "Competitive strategy", 2008). Competitive advantage could either be achieved by low cost or differentiation. Since only one brand can be the cheapest, it implies that differentiation is the key to competing in the business market. It is also believed that organizations could not gain both low cost and differentiation achievements. Therefore, strategy is seen as making a differentiation between value and cost. However, "Blue Ocean Strategy" was born in 2005 and changed this conventional understanding. Companies applying blue oceans pursue differentiation and cost simultaneously. The name "Blue ocean" implies an contradiction to the old strategy "Red ocean" which states