Blue Ocean Strategy instal the new version for ipod

So is innovation a black box? Ms Mauborgne's analogy to explain this was simple.īut there is no permanently excellent company or industry. We know innovation is important but we have not learnt how to control risk and do it in a systematic manner,' Ms Mauborgne added. But they (companies) always sign cheques for red. 'As sensible leaders, we should be investing more in blue oceans. The remaining 14% of business launches that fell in the blue ocean category, accounted for 38% of revenues and had a profit impact of 61%. The revenue impact of these red ocean launches, according to studies by Mauborgne and her colleagues, was 62% and profit impact 39%. Yet 86% of business launches by companies fall in the red ocean category. In other words, returns from investments in blue oceans are substantially higher. In a blue ocean, companies realise both differentiation and low cost.

Also in a red ocean, competing companies usually have to choose between differentiating themselves at the expense of pushing up costs, or stay low-cost and undifferentiated from rivals. What Nintendo did was create an uncontested market space and make the competition irrelevant. While traditional strategy, or red ocean strategy, exploits existing demand, blue ocean strategy creates and captures new demand in the same manner that Nintendo did with the launch of the Wii, said Ms Mauborgne. Thus using a blue ocean strategy, it created a new market for itself instead of fighting for share in the market space dominated by Sony's Playstation and Microsoft's Xbox.īlue ocean focuses on how to link innovation to commercial value. So it decided to do away with this feature, keep the price of the Wii low and also target non-core gamers with the product. With the Wii, what Ninentdo did was ask itself how many customers used high-definition TV compatibility, a feature that was pushing up the cost of the console. Its better established rival, Sony, was losing $ 240 on each Playstation 3 model sold, while Nintendo was making $ 40 on each Wii sold, Ms Mauborgne said. Wii's launch helped Nintendo grow sales 90% and profits, 77%.

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Blue Ocean Strategy instal the new version for ipod