Blue Ocean Strategy Research Paper Example | Topics and Well Written Essays - 1250 words

Blue Ocean Strategy - Research Paper Example 2.0. Eliminate-Reduce-Raise-Create Grid Table 1. Eliminate-Reduce-Raise-Create Grid (ERRC) for Nintendo Wii  Eliminate Raise Game expansion packs Purchaser influence Simplicity / easy to play Reduce Create Gaming technology Health & lifestyle benefits Family experience 2.1. Eliminate Here BOS advances that Nintendo Wii has to look for those factors in the gaming industry that the industry has been competing on that can be done away with. Traditionally, in the Red Ocean, game expansion packs are utilised as a customer lock-in strategy. They are used to extend the gamers interest beyond the original version of the game. Nintendo Wii, unlike its competitors, does not offer expansion sets and this has enabled it to develop new value in two ways. Firstly, expansion sets lead to an extra cost to both manufacturer and users. By eliminating these expansion packs Nintendo Wii is able to save costs on production, distribution, promotion and sales. Secondly, these expansion sets needs serious gamers who are focused on extending their gaming experience beyond leisure. Expansion packs are also seen in some quarters as being as an unethical way of increasing customer loyalty through promotion of addiction (â€Å"Why are Video Games Addictive - Reasons & Theories,† 2011). The Wii targets the casual gamer who does not have that urge for an extended gaming experience. In fact, the Wii could use this to promote itself as the non-addictive gaming choice. 2.2. Reduce According to the Four Actions Framework at this juncture the Wii needs to determine whether products or services have been overdesigned in the race to match and beat the competition. Wii’s big competitors, Sony’s PlayStation 3 and Microsoft’s Xbox 360, have concentrated on differentiating their products through over-serving customers with provision of cutting-edge technologies such as increased graphics and HD. The benefits that these companies obtain through this strategy are marginal in comparison to the costs they incur. Kim and Mauborgne (2005) referred to this as increasing cost structure for no gain. PS3 and Xbox 360 are forced to provide cutting-edge game play because they are fighting over the same market of demanding, die-hard gamers. On the other hand, the Wii opted to focus on the three groups of noncustomers: those people at the market edge who are undecided, those that flat out refuse to purchase a Wii because they are committed to another system like the XBox 360, and the unexplored, who may not know about the Wii or possibly cannot afford it. Nintendo reduced their costs by going low tech and increased the value of the Wii by instead focusing on making it easy to understand, fun to play and highly interactive. According to Scott (2008) Nintendo expanded the market by making video games simpler and more accessible. 2.3. Raise As stated above the Wii utilised a strategy that was different from its rivals, focusing on raising the simplicity, fun an d interactivity of its games as its customer value proposition rather than using superior gaming technology as its value proposition. This is in line with the third action of the BOS Four Actions Framework which seeks to identify factors that need to be raised well-above the industry standards (Kim & Mauborgne,