Introduction to Entrepreneurship

Introduction

The Red Ocean and Blue Ocean are different strategies to act on competitive markets and create new demand. Red Ocean is a description of high competition, a space which is achieved at the expense of others, either lowering prices or improving quality. The red ocean is the rule of competition, while in the Blue Ocean, competition does not exist. The trip to Ocean Blue Red departs from the ocean and should be done with imagination. Blue oceans not always arise from alternative industries, but may arise from their own. We can create new market segments within the existing industry. Blue ocean strategies have to do with creativity and innovation. The cornerstone of Blue Ocean Strategy is the useful innovation (value innovation), a form of innovation that creates value for the customer and for the company. The principle of the Blue Ocean strategy is to stop competing and finding a potential market hitherto untapped. The frontal confrontation is never the solution. This is an unnecessary expense and harmful energy. The Ocean Blue is shown by the virtually free of competition and commercial sectors corresponding to potentially lucrative markets if it is sent with intelligence (Mojca, pp. 5-9).

Red oceans are existing activities and represent the known market space. In red oceans, borders of activity are known and accepted by the stakeholders (suppliers, customers, etc.). The competition rules are also known. In red oceans, companies try to overcome their rivals by winning new market share. For a company facing this competitive intensity, it becomes increasingly difficult to find growth opportunities. The competition becomes bloody (Burke, pp. 24-34).

Discussion and Analysis

The Blue Ocean Strategy is virtually free of competition and commercial sectors corresponding to profitable markets. If the highly competitive sectors are somewhat exhausted and have only poor prospects for growth, not yet surveyed sectors are much more exciting. The blue ocean strategy is to reposition the company in its environment, from an analysis of its strengths and potential customer demand. It is the bias of creativity and innovation. To access the Blue Ocean, we must reform the way we design the strategy. The Red Oceans are existing activities and it is the known market space. In red oceans,

The boundaries of the activity are known and accepted by the stakeholders.

The competition rules are also known.

In red oceans, companies are trying to overcome their rivals by winning new market share.

For a company facing this competitive intensity, it becomes increasingly difficult to find growth opportunities.

The offer is transformed and becomes a commodity or is in niche markets.

The competition becomes bloody: hence the term red ocean.

The Blue Oceans in contrast consists of all activities that do not exist today. They therefore constitute an unknown market, uninfected by the competition. In blue oceans,

Demand is created rather than conquered.

There are many opportunities for rapid and significant growth.

The competition does not exist because the rules do not exist and must be created. 1.The company must contend not only with their competitors in their own industry but also other ...