Nokia’s Blue Ocean Strategy Essay

In todays all overcrowded industries, competing head-on results in nothing but a damn wild naval of rivals fighting over a shrinking profit pool. whatever Companies are fighting for a competitive advantage or over securities industry share while others are struggling for differentiation. This schema is more and more unlikely to nominate remunerative growth in the future. Nokia , the Finlands fall mobile phone company has seen its market share and share hurt tumbling dramatically by 90% since 2007 and the company is yet to strain the comeback it hopes.Instead of competing in such scarlet sea of bloody controversy, Nokia should make smart strategic moves by creating uncontested market put that would make the ambition irrelevant. toothsome ocean is consequently concerned with unsung markets where opportunities abound. First of all, this study give critically be evaluating Blue maritime system by highlighting the six principles that Nokia raft use to successful ly formulate and execute Blue marine Strategies. Secondly, we leave be counsel on the comparison and contrast of red and Blue marine, and finally, this assignment will concentrate on an explanation of the benefit and problems of Group Work.Blue Ocean Strategy Blue Ocean outline challenges Nokia to pull out of the red ocean of bloody competitor by creating uncontested market stead that makes the contender irrelevant. Instead of dividing up be and often shrinking adopt and benchmarking competition, rich ocean system is about growing demand and breakout a air from competition. This involves creating juicy oceans in a smart and responsible way that is both opportunity maximising and risk minimising. Creating uncontested parvenue market spaceTo win in the future, Nokia must stop competing with rival firms in the battle of smartphones because the only way to beat the competition is to stop seek to beat the competition since the rules of the game are yet to be site. Becau se trading operations improve, markets expand, and players come and go, it is a big challenge for Nokia to continuing knowledgeability of piquant oceans. Here, the strategic move would be the right unit of analysis for explaining the creation of blue oceans and sustained high performance. A strategic move is the set of managerial litigates and decisions involved in make a major market-creating blood offering. Also, Nokia has to cogitate on cherish innovation which is the cornerstone of blue ocean strategy. But again, instead of beating the competition, Nokia should focus on reservation the competition irrelevant by creating a leap in value for buyers and the company, thereby opening up modern and uncontested market space.Formulating and executing Blue Ocean StrategyTo succeed in Blue Ocean, Nokia has to take into rate the principles and analytical frameworks that are essential for creating and capturing the strategy. Nokias executives have to be insolent and entrepreneur ial, they should learn from failure, and seek out revolutionaries. Effective blue ocean strategy should be about risk minimisation and not risk taking. The tools and frameworks presented imply * The strategy canvas it a diagnostic and an action framework for grammatical construction a compelling blue ocean strategy which serves two purposes.First, capturing the period state of play in the known market space, allowing you to understand where the competition is currently investing, the promoters the industry currently competes on in products, service, and delivery, and what customers receive from the existing competing offerings on the market. Second, Nokias executives should fundamentally shift the strategy canvas of its operations by reorienting the strategic focus from competitors to alternatives, and from customers to non customers of the business.* The four actions framework consists of reconstructing buyer value elements in crafting a radical value curve. These actions cons ist of eliminating the factors that Nokia takes for granted, reducing factors intimately below Nokias standard, raising factors well above Nokias standard, and creating factors that Nokia has never offered. * The Eliminate- rosy-cheekeduce-Raise-Create Grid is key to creation of blue oceans. The grid will weigh Nokia to act on all four to create a new value curve. By doing it, the grid will give four nimble benefits * Pushing Nokia to simultaneously pursue differentiation and low costs to break the value-cost trade-off. * Lifting its cost structure and overengineering products and services* Creating a high level of elaborateness in its application since it is easily understood by managers. * Scrutinising every factor Nokia competes on, making it discover the range of implicit assumptions they make unconsciously in competing. An effective blue ocean strategy has three complementary qualities focus, divergence, and a compelling tagline. To make its competition irrelevant, Nokia sh ould then apply the principles of Blue Ocean Strategy to succeed.Principles of Blue Ocean Strategy Six principles will imbibe Nokia Corporation through the formulation and execution of its Blue Ocean Strategy in a systematic risk minimizing and opportunity maximizing way.The initiatory four principles reference book Blue Ocean Strategy formulation.* Reconstruct market boundaries.This principle identifies the paths by which Nokias management can systematically create uncontested market space across diverse industry fields, and so attenuating search risk. It will teach Nokias management how to make the competition irrelevant by looking across the six conventional boundaries of competition to open up commercially important blue oceans. The six paths focus on looking across alternative industries, across strategic groups, across buyer groups, across complementary product and service offerings, across the functional-emotional druthers of an industry, and even across time.* Focus on the big picture, not the numbers. This illustrates how Nokias management can design the businesss strategic cooking process to go beyond incremental improvements to create value innovation. It portrays an survival to the current strategic planning process, which is often criticized as a number-crunching engagement that keeps companies engaged into making incremental improvements. This principle challenges risk planning. Using a visualizing approach that drives managers to focus on the big picture rather than to be submerged in numbers and jargon, this principle suggests a four-step planning action whereby Nokia could build a strategy that will create and capture blue ocean opportunities.* Reach beyond existing demand.To create the largest market of new demand, Nokias management must challenge the conventional practice of embracing customer preferences through finer segmentation. This practice often results in increasingly small target markets. Instead, this principle shows how to aggregate demand, not by cogitate on the differences that separate customers but by building on the tendinous commonalities across noncustomers to maximize the size of the blue ocean being created and new demand being unlocked, thus minimizing scale risk.* Get the strategic rank right.This principle describes a sequence which Nokia should follow to ensure that the business sample they build will be able to produce and maintain profitable growth. When it will meet the sequence of utility, price, cost and adoption requirements, it will then address the business model risk and the blue ocean ideas it created will be a commercially viable one.The remaining two principles address the execution risks of Blue Ocean Strategy.* Overcome key organizational hurdles.Tipping stoppage leadership shows how Nokias management can mobilise an organisation to switch the key organisational hurdles that block the implementation of a blue ocean strategy. This principle addresses organisational r isk. It sets out how Nokias executives likewise can overcome the cognitive, resource, motivational, and policy-making hurdles despite limited time and resources in executing blue ocean strategy.* Build execution into strategy.By integrating execution into strategy making, Nokias personnel are motivated to pursue and execute a blue ocean strategy in a sustained way inscrutable in an organisation. This principle introduces fair process. Since a blue ocean strategy by force of necessity represents a departure from the experimental condition quo, fair process is needed to facilitate both strategy making and execution by rallying people for the voluntary cooperation required to hit blue ocean strategy. It deals with management risk associated with peoples postures and conduct.Red and Blue Ocean strategies Competition-based red ocean strategy assumes that an industrys structural conditions are given and that firms are forced to compete inside them. Simply stated, red ocean strategy is all about outpacing competitors in existing market. The strategic choices for firms are to pursue either differentiation or low cost. Conversely, blue ocean strategy is based on the popular opinion that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players. Clearly, blue ocean strategy teaches how to get out of established market boundaries to leave the competition behind, making it irrelevant. The table below outlines the key defining features of red and blue ocean strategies.