German University in Cairo

Blue Ocean
Strategy
14th of November 2022

By Mazen & Nourhan

OUTLINE
1. Blue Ocean Strategy

2. Blue Ocean pros and cons

3. Blue Ocean Implementation

4. Technology Trend and the Blue Ocean Strategy

5. Real Life Case

 WHAT IS BLUE OCEAN STRATEGY
1. 4.
Market Penetration

•According to the Blue Ocean Strategy, even

•Market spaces are either contested or
contested markets have what can be called
uncontested. Usually, in contested markets,
uncontested space. This uncontested space
there are several competitors and the
can be penetrated through product or service
competition is high.
differentiation.

Blue Ocean
2.
Differentiation Strategy Need Creation
5.

•Differentiation is the ultimate solution to •The point of this uncontested market space
competing in contested markets. However, is to create a need for the product or service.
differentiation would lead to an increased The Blue Ocean Strategy comes to defy the
cost. Red Ocean Strategy.
BLUE OCEAN Create uncontested market space
1. •The Blue Ocean Strategy is a newer strategy that states that
creating what would be called ‘uncontested space’ would help the
product make competition irrelevant.

Create and capture new demand

2. •Creating a new demand would mean capturing new interest.

Break the value-cost trade-off

3. •This would deem the value-cost tradeoff insignificant as it
wouldn’t apply to this situation.

Make the competition irrelevant

When competition is fierce and exploiting existing demand is
4. difficult, new demand needs to be created. Value innovation helps
make the competition irrelevant through simultaneous product
differentiation and cost leadership.
Align the whole system of a firm's activities in pursuit of
differentiation and low cost
5. •This means that differentiation wouldn’t necessarily lead to
increased cost and vice versa.
RED OCEAN Compete in existing market space
1. •A strategy that helps compete in an existing competitive market
space.

Beat the competition

2. •The name refers to the ‘bloody’ nature of the competition in this
market. In such market, the boundaries are well-defined by all
competitors.

Exploit existing demand

3. •This strategy states that in order to lead the market, a product or
service should beat the competition by exploiting the existing
demand. This may be achieved by taking one of two routes.

Make the value-cost trade-off

4. •The first route is differentiation while the other route is low cost.
If the market is value-driven, differentiation would be the key.

Align the whole system of a firm's activities with its strategic

choice of differentiation or low cost
5. •If the market is cost-driven, the lower cost would be the key.
Hence, the value-cost tradeoff is unavoidable.
 PROS AND CONS OF THE BLUE OCEAN
STRATEGY

PROS CONS
•Might be too ambitious as it studies the
•Avoid competitive and saturated markets best-case scenario.
which lead to ‘bloody’ competition.

•Very risky given that the window of

•Neglects the value-cost tradeoff as
creating a niche market space is very
differentiation and low cost may both be
slim and narrow.
achieved.

•Increases business growth potential. •Impermanent in most cases given that

innovations are not exclusive.
STRATEGY IMPLEMENTATION 3. Imagine where you could be

•Understand the drawbacks of the product or service, and define the

target or goal to be achieved

1. Get Started

•The first step of implementation is choosing or creating a starting point

for the product or service. This also implies to creating an identity for this
product or service, or the business as a whole
4. How to get there

•Troubleshooting the drawbacks to eliminate them while satisfying the

needs of the customers or consumers. This would imply to moving towards
the target or goal set

Understand Where you are now

2.

5. Make a move
•The second step is to assess the strengths and weaknesses of the
product or service to know where it stands in the market amongst
competitors (or potential competitors)
•Formally document the plan to move towards the blue ocean. This formal
documentation should include a strategy, a plan and the tools to achieve
the set target or goal
Founding Getting Started Innovation

•In 1997, Reed Hastings and Marc Randolph founded •They began as an online DVD rental service but •They came up with the brilliant idea when they
Netflix. quickly recognized they had a problem: customers allowed people to create accounts and charge
don't like to go to the store to return the DVD or pay monthly fees, and letting them list the movies they
late fees when they don't return the DVD by the due wanted to watch, and Netflix would send them to their
date. homes along with an envelope asking them to return
it so they could send the next title on the list. This
helped them expand quickly and reach 5 million
subscribers.

Demand Creation

•The aim was to create a demand and meet it by

starting to stream movies. In 2007, they made the
decision to follow the blue ocean strategy, which
helped them to develop more swiftly than the
previous plan and they reached 167 million users in
2019.
 TECHNOLOGY TREND - AI

In order to provide customers with the best experience and service

1. NETFLIX adopting AI possible, Netflix has adopted artificial intelligence. This is because the
competitors began to copy them when Netflix deployed the blue ocean
strategy and began streaming movies online.
The replication of human intelligence in computers that are programmed to
act and think like people is known as artificial intelligence (AI). Any computer
2. What is AI that exhibits traits of the human intellect, like as learning and problem-
solving, can also be referred to by the phrase.

Widespread customization is now possible because of Netflix's

improved AI integration. To put it simply, the AI engine keeps an eye on
3. Widespread customization the information flow and occasionally takes control so that it can make
decisions and recommendations at specific periods.

When recommending content, Netflix's AI takes into account your

viewing preferences and interests. Users can take charge of their
4. Customer Need
multimedia streaming and tailor their interactions because the system
can assemble and recommend content based on user preferences.
NOVO NORDISK- The Danish insulin manufacturer Novo Nordisk opened up a new
market for insulin by questioning the accepted wisdom regarding

REAL LIFE CASE which customer segment to target.

It discovered fresh information about how to increase value for a

New Market previously underserved segment of purchasers by taking a broad view
of buyer groups.

Doctors were made the industry's target market because of how

Increase Value crucial they are in influencing diabetics' decisions regarding the
purchase of insulin.

Target Market
However, they saw that by reorienting the industry's long-standing
focus on doctors to the users—the actual patients—it might
differentiate itself from the competitors and open up a "blue ocean."

Diffrentiation

•This gave Novo Nordisk the idea for NovoPen, the first convenient
insulin delivery system created to take the difficulty and shame out
Novo-pen of giving insulin. Without the difficulty and social shame of syringes
and needles, patients may carry the pen around and inject insulin
with ease and convenience.
NOVO NORDISK- Novo Nordisk then unveiled NovoLet, a pre-filled disposable insulin
injection pen with a dosage system that offered users even greater

REAL LIFE CASE comfort and ease of use, in an effort to rule the blue ocean it had
opened.

The Innovo, a combined electronic memory, and cartridge-based

Pre-filled disposable pen delivery device were later introduced.

With the help of its "blue ocean" business strategy, Novo Nordisk went
Electronic memory from being an insulin manufacturer to a provider of diabetes
treatment. The NovoPen and subsequent insulin delivery systems
completely dominated the market.

Blue Ocean Buisness strategy

In Europe, Asia, and Scandinavia, where patients are encouraged to
take frequent insulin injections each day, sales of pre-filled devices
or pens currently make up the lion's share of the market.

Sales

Nearly 30 years after making its first blue ocean strategy move, Novo
Nordisk is still the market leader in diabetes care, accounting for
Result roughly 70% of its overall revenue.
This dominance was primarily the result of the company's decision to
think in terms of users rather than influencers.
 REFERENCES
•https://www.businessnewsdaily.com/5647-blue-ocean-strategy.html

• https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/

• https://www.angelone.in/knowledge-center/online-share-trading/blue-ocean-strategy

•https://www.admixweb.com/blue-ocean-strategy-in-product-development-using-netflix-as-an- example/

•https://www.blueoceanstrategy.com/blue-ocean-strategy-examples/novo-nordisk/
Thank You