Red Ocean Traps reveals the downsides of conventional industry thinking from "summary" of Blue Ocean Strategy with Harvard Business Review Classic Article “Red Ocean Traps” (2 Books) by W. Chan Kim,Renée A. Mauborgne
The concept of Red Ocean Traps sheds light on the limitations of traditional industry mindset. It challenges the prevailing notion that competition is the only way to succeed in the market. This way of thinking keeps companies locked in fierce battles with rivals, leading to a crowded marketplace where everyone is fighting for the same customers. As a result, companies end up competing on the same factors like price, features, and quality, making it difficult to stand out and achieve sustainable growth. Red Ocean Traps highlight the dangers of engaging in head-to-head competition, where companies are constantly benchmarking themselves against their competitors and focusing on beating them at their own game. This approach often leads to a race to the bottom, where companies are forced to cut prices, compromise on quality, and sacrifice profitability in order to stay competitive. In the end, everyone loses as profit margins shrink and customers become increasingly price-sensitive. Moreover, Red Ocean Traps expose the fallacy of assuming that the industry's current boundaries and competitive rules are fixed and unchangeable. By accepting the status quo, companies limit their ability to innovate and create new market spaces where competition is irrelevant. Instead of challenging industry norms and exploring new opportunities, they remain stuck in the red ocean, where differentiation is difficult and growth is limited.- Red Ocean Traps serve as a wake-up call for companies to break free from conventional industry thinking and explore new ways to create value for customers. By focusing on innovation, blue ocean strategy offers a path to sustainable growth and profitability by creating uncontested market spaces where competition is irrelevant. This shift in mindset opens up new possibilities for companies to chart their own course and redefine industry boundaries, instead of being confined by the limitations of red ocean thinking.
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