Porter's Five Forces VS Blue Ocean

 

Porter's Five Forces is much concerned with the micro-environmental issues impacting enterprises in same sector than it is that keeps a corporation compete in current markets. Competitive rivalry, new entrants, buyer power, supplier power, and threat of substitution are all factors that, if seized will not actually make you a market leader. One criticism of this model is that businesses are not always in a competition whereas Blue Ocean Strategy is a strategy that an organization uses in a new level that its competitors haven't yet stepped into. As a result, the company effectively develops its own new market, which if successful then will uplift you to the position of business leader through active innovation. So, there are some firms today that are dealing with various obstacles in their organization that are being addressed to the management, which is why the firm has certain strategies. The insights suggest that current markets may have a lot more opportunity than previously assumed. The majority of the business press focuses on new and rapidly rising industries; however, this study demonstrates that innovating in established markets is a useful solution, and that competition is a considerably weaker factor in reducing the advantages from that type of innovation. And, more importantly, the sort of innovation you need to consider does not have to be new or revolutionary. In the market, it is more progressive, adaptable, reshaping, and moving forward. Porter's approach is built on the principle that a company's strategy should be adapted to the opportunities and threats it faces in the external environment. Competitive strategy, in particular, should be based on an understanding of industry structures as well as how they develop. Every industry and market are shaped by five competing factors, according to Porter. These forces influence the level of competition and, as a result, an industry's profitability and attractiveness. The goal of corporate strategy should be to alter these competitive factors in such a manner that the organization's position improves. Porter's model aids in the study of an industry's major drivers. Management can select how to modify or utilize specific aspects of their industry depending on the information collected from the Five Forces Analysis. According to the Blue Ocean

Strategy, innovation should generate new market space, connect into unfulfilled customer demand, and seek out unique market. Competition can become almost meaningless in this situation. The term "blue ocean" is a metaphor used to represent the unexplored potential of market. Companies must be more than simply another rival in a developed and over- saturated industry, especially now. 'Value Innovation' is the core of the Blue Ocean Strategy. A blue ocean is formed when a firm accomplishes value innovation which benefits both the customer and the company at the same time. While simultaneously decreasing or deleting features or services that are less valued by the present or future market and innovation in product, service, or delivery must increase and generate value for the market. Both are competing approach. Porter's Five Forces helps firm to compete through five forces. Blue Ocean Strategy helps firms to identify innovation through differentiation strategy and cost leadership strategy to avoid competition.