Music Industry: Red and Blue Ocean Strategy
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Business plays and integral role in the economic development of any nation. In most of the nations in the world it is one of the major sectors which generates substantial amount of money in terms of national income. However, it is one of the sectors that are compelled with many challenges ranging from political, economical and social factors. With such great challenges it can be described as battle field where only the best fit survives while the weaklings perish. On the other hand, the success and growth of any given business depends on large array of factors but the fundamental factor is the availability of market. Businesses cannot operate in an environment where there is no market to sell the manufactured goods and services.
Consequently, with current stiff competition being experienced in the world today, it is evident enough that the market space is concentrated with many competitors. This in turn has compelled all the stake holders in the business sector to draft new plans and mechanism which will help them to remain competitive and effective in the market space for a long period. It is in respect to this stiff competition that business men have restored to the use of blue and red ocean market strategies as effective methods of boosting growth and development of their firms. Therefore, in this paper we aim at developing a comprehensive analysis of blue and red ocean strategies, its characteristic, limitations and the influence of the three Es in the implementation process of blue and red ocean strategies (Kim & Mauborgne, 2005).
Red ocean market strategy can be perceived an environment in the market space where competition is a common phenomenon among the various industries. The rules and boundaries of each industry are well marked out to avoid unfair competition. All the involved parts are striving to outdo each other so that to have a larger portion in the market space. This means that in the red ocean strategy the main thing which reinforces such competition is to search for larger market share rather than creating room for more demand of goods and services. The prospects of profits and growth of industries tends to decline due to contested market space thus leading to collapse of less stable businesses in the market.
On the other hand, blue ocean strategy aims at innovating new industries which have never existed before thus increasing the demand of goods and services to the consumers. It also provides a favourably environment for rapid growth of business as there is no competition among the firms. The aspect of competition is of no significance in the sense that the rules and regulations are not yet integrated into the system. Furthermore, it unleashes a business opportunity that has not been explored by any other firm hence increasing the prospects of business profits in return.
According to Dimitrov & Niciejewska (2009), the red ocean market is easy to enter because the rules and regulations of the competition are well stipulated. It mainly aims at beating the competition through value and cost trade off strategies in the market space. On the contrarily, blue ocean strategy can be described as being hard to venture in it but it has more returns in terms of profits than red ocean strategy. It aims at making competition irrelevant through creation of new ventures that has never explored. The issue of value trade off system holds no sold importance in this kind of strategy as it mainly focuses on differentiation as well as low cost. However, the innovation of new business opportunities many in long runs attract other firms in it thus bringing in the characteristics of red ocean strategy in place.
The three E principles of fair process
Jamil (2007) affirms that “A business should up hold the moral concept of fair process in executing its daily operation. Therefore, there are three fundamental mutually components which help in encouraging fairness in business operations.” They include: engagement, explanation and clarity of expectation which has been discussed below:
i)Engagement mainly involves the process of involving all employees in strategic decision making by allowing them to speak out their opinions as well as encouraging them to refute their college’s ideas for better decision making. This in turn helps in developing strong relation between the managers and employees for sustainable progress in the organization.
ii) Explanation on the other hand, mainly aims at providing a favourable environment where clarification of various issue pertaining to decision making are ironed out. Managers elaborate further to the employees on which ground were the decisions made based on as well as the goals and objectives placed in position by the managers while formulating such decisions.
iii) Clarity of expectations finally, focuses on setting up the new rules and regulation which would control the daily operation of the organization. Employees get the informed consent of what is expected of them as well as the penalty conferred on them in case they contravene the stipulated rules.
In conclusion, it is therefore evident that those firms which incorporate these three principles of fair process in the organization have been rated to achieve high returns in their business operation in relation to their counterparts.