Details: Creating and sustaining competitive advantage is critical to organization sustainability. Drawing upon the readings from Modules 4 and 5, current literature, and personal knowledge, you will...

Competitive Advantage 1

Running Head: COMPETITIVE ADVANTAGE
Why Blue Ocean Organizations sustain competitive advantage
Competitive Advantage 2

Table of Contents
Introduction ................................................................................................................................................... 3
Challenges and opportunities ........................................................................................................................ 3
Opportunities for innovation ......................................................................................................................... 5
Value and ethics for blue ocean organizations .............................................................................................. 6
Conclusion .................................................................................................................................................... 8
References ..................................................................................................................................................... 9
Competitive Advantage 3

Introduction
The concept of Blue Ocean strategies is new in the business world as it was first
published in 2005 by W. Chan Kim and Renee Mauborgne. The blue ocean theory is helpful for
organizations to focus on how to capture more market share than competitors. This theory
focused that companies engage in head-to-head competition for gaining sustainable profits and
growth. But in the overcrowded industries, there is a bloody red ocean of competitors who fights
for profits and market share (Kim & Mauborgne, 2005). At last, success comes not from fighting
with competitors, but from finding new blue oceans of untapped market spaces for growth. Blue
ocean strategy has some challenges about strategic success, but it provides opportunities and
systematic approach to making the competition irrelevant. In this paper, challenges and
opportunities of blue ocean strategy will be discussed (Xu, Chen, Liu & Shou, 2012). Along with
this, values and ethics of blue ocean organizations will be discussed that are useful to create
competitive advantage.
Challenges and Opportunities
Blue ocean strategy focuses on differentiation and low cost to provide increased value to
the customers and break the traditional approach of business (Xu, Chen, Liu & Shou, 2012). But
it is found that the execution of blue ocean strategy is challenging for the managers because of:
Cognitive: Employees don’t want to change their routine and schedule in which they are
comfortable (Kim, 2008). So, it is challenging for the managers to implement a new strategy to
change the routine and business operations.
Limited Resources: To implement the change, more money is required and most
companies don’t have adequate resources. To resolve this issue, organizations should focus on
Competitive Advantage 4

strategic alliances which provide a more leverage for the resources (Courtright & Smudde,
2009). It helps to reduce overhead costs, improve efficiency and reduce transaction cost.
Find New Market: This approach focuses on positioning of a product in a niche market.
But in practice, it is challenging to find a strategic space in the market. Niche market may be so
rare and it is challenging to find out the consumers in this market (Kim & Mauborgne, 2005). It
is because there are only few consumers who are attracted towards niche products. Further, it is
difficult to find empty markets where there are no competitors.
Opportunities
Explore New Market: The main advantage of this approach is that it is...