Blue Ocean Strategy Harvard Case Solution & Analysis

Question 01: Apply the logic of 'blue ocean strategy’ to an organisation with which you are familiar

Blue ocean strategy basically refers to the overall creation by an organization of a new, unique and an uncontested market space that is developed to make the competitors irrelevant and it also creates new consumer value while also decreasing the cost. The concept of blue ocean strategy was introduced by W. Chan Kim and Renée Mauborgne (Kim, W.C., Mauborgne, 2005).

The company that has been discussed in the paper, which has implemented blue ocean strategy and has become the market leader, is Southwest Airlines. The airline has been the major United States airline and it is also the world’s largest airline that has been a low cost carrier that is headquartered in Dallas, Texas.

The airline was established in the year 1967 where it adopted the current name in 1971. The company has more than 46,000 employees who have been operating worldwide. The airline operates approximately 3,400 flights per day. Southwest Airlines carries most domestic passengers among all the United States airlines.

The airline is scheduled to cover 42 states and 97 destinations. The company has been using Boeing 737 aircraft in its fleet. Southwest has been largest operator of the Boeing 737 aircraft. The airline has been ranked number 15 in the Glass door Employees Choice Awards as per the year 2015.

The list of Board of Directors for Southwest Airlines includes 10 board members who are currently designated on the list of board of directors. Along with the list of board of directors, there are two honorary designations also which include Herb D.Kelleher, Cofounder and Chairman Emeritus and Colleen C. Barrett, President Emeritus. Gary C. Kelly is basically serving as internal members for the airlines at Southwest, where the remaining serve as external members in the company.

The Airline industry has been one of the most highly competitive industries where the prices have been quite high and the passengers in the past were unable to travel through air crafts from one place to another. The industry in the past was offering services at high prices and the customers or the passengers had to avail the services because they had no other option.

In such a situation, Southwest Airlines entered into the airline industry. The industry was highly competitive and the rivals not only in the United States but across the world have been using similar business model that is to offer high priced tickets with improved services and luggage facilities.

Once Southwest decided to enter the market, it actually opted for a different strategy. The airline decided to penetrate in the market by following the blue ocean strategy. The strategy which the airline followed was to enter the airline industry by offering low cost services to the customers. The basic idea or the reason behind this move was to actually directly compete with the substitutes of airlines that have been rather cheap.

Southwest targeted those substitutes by offering low cost carrier and low cost air tickets to the passengers. This has been the blue ocean strategy where Southwest has targeted a unique and an uncontested market space that is developed to make the competitors irrelevant and it also creates new consumer value while also decreasing the cost.

The blue ocean strategy is all about introducing or catering a market by offering diverse, unique and differentiated features to the customers that introduce a new dimension in the market or the industry. Southwest explored the already mature and saturated airline market by penetrating the market by offering low cost carrier and low cost services to the customers; therefore, it is considered the blue ocean strategy that is followed by the management of the company where it entered the already developed market but with a different approach and different business model.Blue Ocean Strategy Case Solution

The business model which made the airline become the market leader has been its low cost carrier. Since its inception, the airline has been following its low cost carrier plan, which has made the airline the most success full and in fact, the market leader airline in the low cost carrier market. With the success of Southwest, many established and new airlines entered the market with the same business model, however, they cannot be considered as organizations that followed the blue ocean strategy because these airlines have used the same strategy, which is followed by their competitors............................

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