Wednesday, November 25, 2015

Blue Ocean Framework Analysis

The Blue Ocean strategy talks about building products for a new market and set of customers. Christensen’s model of disruptive innovation talks about this market. By constantly innovating and creating more and more sophisticated products consumers are unknowingly creating a customer base for disruptive innovations. In my opinion, this strategy works for a few companies that aren’t already established in the market place. While it is vital to innovate and improve the customer relationship like we saw in the Cola Wars case. Applying the blue ocean methodology for already established organizations tends to get a little difficult.

One of the organizations that follows Blue Ocean is the Uber. Uber has successfully disrupted the Taxi cab industry. Uber’s blue ocean strategy can be easily understood using the ERRC framework. It eliminated the waiting time, denial of service, tipping hassles faced by the customer. It raised the standard of service provided by the traditional yellow cab. The drivers were friendly came on time and as requested. Uber reduced the fare it charged considerably. The amount Uber charges for a ride is a small fraction of what the taxi cab would have charged we can see the reduce aspect of the ERRC here. These factors and its new addition of UberXL has not been heard of in this we can create aspect of the ERRC framework. Using this framework has helped Uber, we are all aware of the Uber’s success.

Additionally through its constant innovation, the company has increased its profits ten-fold. The company has constantly been innovating in order to maintain its customer base. Its new feature UberXL has already a success. In that context I believe it has followed the Blue Ocean strategy. Additionally, the company is now working on making the application intelligent by predicting the time its customer usually request for its services. Looking at this model we can see that the Blue Ocean Strategy does work, however it may not always be the case.

In my opinion the blue ocean strategy is a good framework. The ERRC particularly is easy to follow and comprehend. We have seen countless such examples such as Starbuck, Dropbox etc. Coming into the market by reaching out to a niche customer base. The case’s point of innovating to help our customers better is correct but we’ve seen time and again that under certain circumstances companies cannot complete the demands of the new market due to their limitation one example of such a case is Encarta.

I believe this framework can strictly be followed and successful in a more agile, and fluid company. An organization with a strong hierarchy will be unable to adapt quickly to the customers changing demands and to the Blue Ocean Strategy.

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