Global Journal of Management and Business Research, A: Administration and Management, Volume 23 Issue 9

Literature Review Red Ocean Strategy Global Journal of Management and Business Research ( A ) XXIII Issue IX Version I Year 2023 59 © 2023 Global Journals A blue ocean strategy mentions differentiated value for customers must be accompanied with lower costs to the enterprises or firms in business. Companies that adopt differentiation strategies typically offer customized goods and services to consumers, so the prices are generally higher; companies that implement cost-leading strategies have a price advantage but are unable to meet the growing demands of consumers [26]. Yellow Tail wine and Salesforce.com are examples of business firms that offer high value at low cost. Porter defines productivity frontier as the “totality of presently adopted business practices at any given time”. Businesses have general practice of selecting a strategic position along the "productivity frontier" [24]. Thus the productivity frontier represents the range of value-cost trade-offs available based on the construct and industrial norms. In 1990s, Moss-Kanter marked that businesses are “switching away from setting out their strategies in terms of lower cost and differentiated attributes.” [25]. Therefore, Trap Five: Equating Market-Creating Strategies with Differentiation is found to be a similar approach as selecting a strategic position along the productivity frontier. means two goods are differentiated good if they are substitutes but not perfect substitutes. Product differentiation types; 1. Horizontal: Different products with same price some customers will purchase one and some will buy other, it really depends on their preferences. Example: Pepsi and Coca Cola. 2. Vertical: Products are different and all customers would prefer one to the other if they were sold at the same price. Products are of distinct qualities. Example: Pentium III and Pentium II [27]. Cost leadership strategies are not required. If businesses prefer to choose in priority product positions (horizontal differentiation) simultaneously and then set prices, then the company with a cost advantage sets a price higher than its competitors [28]. Examples will include Cirque du Soleil Starbucks coffee and Dyson vacuum cleaners [4]. Therefore, Trap Six: Equating Market-Creating Strategies with Low-Cost Strategies is found to be a similar approach as using horizontal differentiation for product positioning. Consequentially, the red ocean traps mentioned Figure 1: Conceptual Model – Factors affecting Managers Common Presumptions III. R ed O cean S trategy Red ocean strategy comes into existence when companies try to perform better than their opponents to mark a much bigger share of current demands in the market. As the market space gets jam-packed, chances for profits and growth are minimized. Products get turned to commodities, and fierce competition turns the Trap Six: Equating Market-Creating Strategies with Low- Cost Strategies – “ Horizontal differentiation” Blue ocean strategy mentions that a low cost strategy should not be an act of compromise in product value provided to the customers. Product Differentiation by the authors are factors that affect common presumptions depicting managers temperaments while initiating competitive strategies to gain leadership in their respective industrial markets [4]. ocean meant to be market bloody as red ocean [1]. A competitive strategy which is an outcome of factors affecting managers common presumptions (see figure