The Competitive Strategy VS. The Blue Ocean Strategy #infographic

 

The Competitive Strategy VS. The Blue Ocean Strategy #infographic

Business schools teach potential market captains how to evaluate the determinants of profitability of a market with the five powers of the porter (Porter , 1980). That is to say, the threat of new entrants, the competition between existing companies, the threat of alternatives, the buyer's bargaining power and the supplier's bargaining power. In other words, the nature of an industry does matter.

Then, select a position by cost leadership , differentiation or a centered approach for a competitive advantage. Rita McGrath of Columbia Business School, however, indicated the reverse in her article in Strategy &, when she said businesses should give up the search for competitive advantage. "Neither theory nor strategy practice has kept pace with the realities of the boundaryless and barrier-free markets of today," according to McGrath.

In the same year, with their article "A New Manifesto for Management," other influential scholars weighed in by arguing that Porter 's theory is focused on static performance, given that it focuses strategic thought on accumulating the lion's share of economic benefit. There is a zero-sum race in Porter 's world between the profits of corporations and societal well-being, where profits involve losses (harm) to society as a whole (Ghoshal, Bartlett, & Moran, 1999).

In addition to the Porter paradigm, the resource-based view (RBV) originated in the 80s, where the proponents argued that a competitive advantage for the business lies primarily in the use of a package of important, tangible or intangible resources at the disposal of the business (Rumelt, 1984). In other words, to achieve a competitive advantage, resources matter.

As a result, with a handful of case studies in value innovation, they presented persuasive reasons where the strategic strategy paradigm might imply the opposite. They also developed a strategy canvas, a diagnostic system, as a guide to implementing a strategy for the blue ocean by rendering the competition irrelevant.

For this purpose, companies with an opportunity-maximizing and risk-minimizing approach will build a blue ocean of an uncontested market. Value creativity is thus a must to escape the red ocean trap in order to compete effectively. As a consequence, by reconstructing market borders, you can push prices down while simultaneously pushing up demand for consumers. In other words, the framework will allow you to differentiate while lowering your cost at the same time. Above all, they argued that value innovation, which is the value-cost trade-off, defies the most commonly accepted dogmas of the competition-based strategy.

Then, followed by the late C 's core competence. In 1990, K. Prahalad and Gary Hamel. Similarly, Teece et al . ( 1997) described the dynamic view of capability as "the ability of the organization to incorporate, develop and reconfigure internal and external competencies to meet rapidly changing environments." In other words, creativity matters.

Again, after more than two decades, W. In their 2005 book "Blue Ocean Strategy," Chan Kim and Renee Mauborgne argue that the competitive approach to strategy is somewhat flawed. They also claimed that the strategy sector includes a range of instruments to compete in the red ocean, including the five powers and the three generic strategies to evaluate the current industry.

The Competitive Strategy VS. The Blue Ocean Strategy #infographic

infographic by: cissokomamady.com

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