Strategic Management Report: Blue Ocean Strategy and Mace Macro

This report provides a comprehensive analysis of the Blue Ocean Strategy, a key concept in strategic management. It begins with an executive summary and an introduction to strategic management, emphasizing its role in achieving competitive advantages. The report delves into the definition, origin, and arguments surrounding the Blue Ocean Strategy, including its strengths, weaknesses, and evolution over time. It examines the strategy's linkage with other management concepts and its transition into a universally applied business practice. The report then focuses on a case study of Mace Macro International, analyzing the company's current situation and implementing the Blue Ocean Strategy to address specific challenges. The report concludes with a discussion of the strategy's implications and potential for future development within the company and other organizations.

STRATEGIC
MANAGEMENT

EXECUTIVE SUMMARY
Strategic Management is an essential practice which is undertaken by organisations
which require effective competitive edge within the market. It has several concepts and theories
that assists different organisations into gaining an appropriate edge within the marketplace.
The report below is based on analysis and implementation of Blue Ocean Strategy, which
is an essential concept under strategic management. For the same, Mace Macro International has
been chosen in context with reflecting upon application of this concept.
The purpose of this report was to analyse the emergence and evolution of Blue Ocean
Strategy, along with its current implementation. To attain this, a detailed analysis has been
performed on inception and application of this strategy with other concepts like SWOT Analysis.
Another purpose of this project was to implement this strategy on Mace Macro
international. Thus, a detailed implementation, with focus on its applicability and relevance with
context of the company, along with improvisation aspects in its implementation.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Critical Examination of the Concept...........................................................................................1
Present Application of the Concept.............................................................................................6
PART 2............................................................................................................................................8
Blue Ocean Strategy....................................................................................................................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic Management refers to an area of practice which is concerned about planning,
organising, directing as well as controlling all the activities and procedures within a company
which provides a company with strategic and competitive advantage in the future. Moreover, this
field also contributes in increasing the sustainability and performance of the organisation, which
further provides a company with appropriate and effective edge in the market. There are several
concepts associated with strategic management that are very important for firms to adopt in
context with ensuring betterment in their capacity as well as overall working in global markets
(Ansoff and et. al.,2018).
The report below is based on Mace Macro International, which is a world-renowned
organisation dealing in provision of facilities management services for different companies
working all around the world. This assignment is divided into two parts, wherein the first part
deals with choosing an appropriate concept or model in strategic management and its critical
evaluation. Moreover, this part also includes the evolution of this concept as well as its present
implementation in terms of dealing with the current problems within organisations in the present
business environment. On the other hand, the second part of this project relates with turning the
theory into action, with respect to Mace Macro International. It takes form of a mini-case study,
which involves present analysis of situation of the company and application of this concept to
solve issues. Moreover, it also includes several challenges with respect to the application of this
theory within the company.
PART 1
Critical Examination of the Concept
Definition of Blue Ocean Strategy
Blue Ocean Strategy refers to an effective process where low cost as well as
differentiation are taken as basis by organisation to create new spaces within the market as well
as develop further demand of their offerings (Noe and et. al., 2017). The main agenda of
application of this strategy is with respect to capturing the uncontested market within a specific
location, in a way, which makes the competition irrelevant. Organisations applying this strategy
work towards creating a demand for their products as well as services, rather than fighting over
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the same. A deeper and wider potential is developed by firms using Blue Ocean Strategy, which
they implement in an unexplored market for growth as well as higher competitive edge.
This strategy works on the concept of value innovation, which means that low cost as
well as differentiation could coexist at one space. The assumption as well as principle which this
strategy works upon, focuses on that if the current value of customers is identified by a company,
then through differentiation, a low cost offering could be provided effectively by the organisation
(Ginter, Duncan and Swayne, 2018).
Origin of the Strategy
Blue Ocean Strategy was first incepted in 2004, in an article within Harvard Business
Review. However, even before that companies were creating different market spaces through
differentiation and low cost strategy, however, this concept came into being a little more than a
decade ago. During that time, the strategy was quite effectively adopted as well as dominant
within the market, where every day new concepts were created as well as new segments within
the market were discovered. In that era, new spaces were created by companies by applying
disruptive innovations. This was because technology and new business management principles
were slowly coming into play, giving both time, scope as well as opportunities to companies in
every field of using those creations and developing new spaces within the unexplored sections of
the market (Hill, 2017). Thus, its inception or origin came into being when a concept like this
was highly required within the market that was needed to ensure a certain level of competence in
companies operating at that time.
Arguments related to the Strategy
However, despite of having a strong origin as well as implementation within the same,
the strategy came across with several arguments and criticism at time of its inception within he
marketplace (Lasserre, 2017). This is because, there were several loopholes as well as limitations
which were found by the theorists as well as practitioners of management theories and concepts.
Moreover, these weak points made it quite evident that this strategy was required to be gained
insight upon, in context with its appropriate long-term implementation.
Some of the most prominent arguments in context with this strategy are mentioned
below:
 A very prominent and strong range of arguments regarding Blue Ocean Strategy was
raised on academic terms. This is because at time when it was introduced, practitioners
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and management specialists used concepts that were backed up by theories. However,
with this strategy, there were no theoretical coherence to back up the same, and thus, it
was criticised from being ineffective (Morschett, Schramm-Klein and Zentes, 2015).
 Another prominent argument that was raised against Blue Ocean Strategy was that its
explanatory model was rather simple. Thus, a single factor related to success was argued
exponentially during the time it was developed and came into existence.
 Its concept of amalgamating both differentiation and low demand is also argued with
context to both being different and distinct concepts. Moreover, it is still an ongoing
debate related to the assumption about firms concentrating either on differentiation or
cost leadership.
 Another criticism during its origin was related to aspects about the concept leaving
several essential elements out of consideration and apply its model out of proportion.
Some of these elements are related to acquiring customer feedbacks related to demand of
offerings. Thus, without taking such a prominent stakeholder into consideration, the
concept emphasises on creation of new market space. This exposes companies with risk
associated with as to whether the demand created by the firm would actually bring in
profits or not (Moutinho and Vargas-Sanchez, 2018).
Thus, with presence of such criticisms, there are several aspects are actually ignored as
well as the overall concept lacks a strong theoretical backup, which made it quite ineffective to
be applied in business context the way it was showcased in the review. Moreover, with such a
range of arguments, its application is still debated in several managerial and operational context.
However, there are several arguments that were for this strategy at the time when it was
developed. A range of favourable arguments are mentioned below:
 While applying the concept of Blue Ocean Strategy, a firm is required to strategically
plan every aspect associated with creation of a new market space, which actually could
be quite profitable for the company as every aspect regarding the offering and its
presentation in the market would be taken into consideration. In addition to this, its
principles encourage companies to indulge in strategic planning and consider the same as
a priority.
 If an organisation properly and effectively implements Blue Ocean Strategy, it would
forewarn the company regarding all the threats available within the market, which were
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associated with the previous sellers of the commodity or service. This would further
assist the organisation in planning an appropriate space which could be free from those
threats (Frynas and Mellahi, 2015). This strategy undertakes innovation as a basis for all planning within the company. If an
organisation plans a new market space to deal in, innovation is quite necessary and has
always been since the inception of Blue Ocean Strategy. Thus, its principles emphasise
on using innovation as a tool to plan its further processes.
Evolution of the Strategy
Based on the arguments above, this concept saw quite an appropriate and sequential
evolution overtime, where emphasis has been given to reduce the criticism and increase the
number of advantage with companies could acquire by using Blue Ocean Strategy within the
firm.
The evolution of this concept has been quite dynamic and its traces are even found before
1990's where companies like Mace Macro International and other companies of that sort already
created a basis for this theory. Such essential application throughout the years has presented the
companies with several benefits like having exclusivity in the marketplace.
Linkage with Other Management Concept
Further, the evolution of Blue Ocean Strategy was also witnessed linking of this concept
with other strategic management practices and principles. For instance, other aspects like Porter's
Five Forces, Core Competencies and several associated aspects like Ansoff Matrix, have been
appropriately used in combination with Blue Ocean Strategy by different organisations. Due to
having appropriate and effective factors like cost reduction and differentiation, it is highly linked
with these concepts and also into practical application of the same (Meyer, Neck and Meeks,
2017).
From mere Concept into Universal Application
Blue Ocean Strategy has turned into a vast field of study, where there have been new
implementations and modifications related to this concept and its applicability in the current
working environment. Currently, different industries have been known to now implement this
concept within their functioning and are working effectively onto creating new markets for
customers to have their products from. Companies are now using this concept as a willing
formula as it assists them to create higher demand simultaneously and without indulging into any
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competitive terms with other companies. This also helps in providing a firm edge and
sustainability of the firm within the marketplace (Trigeorgis and Reuer, 2017).
Rise of Academic Usage
It's evolution also saw an effective turn in terms of acceptance as a management and
business practice academically. While argued before that it lacks a theoretical coherence, Blue
Ocean Strategy is now being taught in universities like Harvard and INSEAD.
Illustration 1: Search hits for "Blue Ocean Strategy"
(Source: Examining the Emergence and Evolution of Blue Ocean Strategy, 2019)
As reflected above, academically, this concept is widely in used and being taught as an
imperative business strategy to pupils to be used by them later in future.
Implementation by Consulting Firms
Consulting organisations regularly seek different management ideas and concepts. As
having a dynamic and wide business base, these companies root for several essential concepts
wherein they could provide the best services to their clients. As a prominent example, Mace
Macro International has implemented this strategy while its inception in Oman market almost 3
decades ago. They created new market spaces with their facilities management services in the
country and since, the company has been consistent in context with improving and essentially
applying within different parts and operations conducted by the firm (Engert, Rauter and
Baumgartner, 2016).
Media Popularity
Evolution of Blue Ocean Strategy has also witnessed emergence of popularity within
aspects like social media and different social events. Companies and educational institutions are
quite consistent in terms of having seminars and training workshops where managers of different
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industries are present in context with having an effective guidance on how best to include this
concept within their overall operations.
International Usage
This strategy has a wide use in not even different industries, but also at the global level.
For instance, there has been “National Blue Ocean Strategy” introduced by governments, which
in that context, has been in implementation similar to SWOT Analysis framework. For example
organisations like Mace Macro International has been using this strategy like their internal
analysis framework currently and thus, thus, has been an evident example of its evolution and
current practice (Gallus and Frey, 2016).
Present Application of the Concept
Blue ocean strategy works for making strategies through which there is more scope of
growth and development in industry by analysing what issues people are dealing with. There are
many changes which are taking place in current market such as technological changes so in this
consideration, managers of Mace Macro have to understand what has to be done through which
they can sustain in industry. With blue ocean strategy, there is requirement of complete
information about issues which is faced by clients of Mace Macro so there is market space for
expansion. As per change in working style of consumers, they requires new and innovative style
with which they can deal with external environment (Hladchenko, 2015). With the help of blue
ocean strategy there is scope of growth and development which assist people to avail new and
fresh services or product from people. As there are many competitors working in environment,
so managers of Mace Macro can come with new and innovative style with which they can attract
more and more clients.
Mace Macro International provides construction and consultancy services in Oman to
different corporate offices which is specific and relevant for maintaining maintenance cost of
building. There is requirement of complete and relevant information about changes which are
taking place in current market. For renovation of office building, there is requirement of different
resources such as material, labour, etc. So managers of Mace Macro plan for some new approach
applying blue ocean strategy through which possibilities of their growth prospects are more. But
in current market, there is requirement of competition, so there are bright possibilities that this
strategy is not relevant in current market. In construction and management consultancy sector,
there is diffidence in demand of consumers but, if managers of Mace Macro have something
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new, then they are able to maintain existence in industry. People welcomes innovative
approaches which assist in maintaining good and positive relations with consumers or clients
(Rosenberg Hansen and Ferlie, 2016).
In blue market ocean, there is requirement of innovation ion market through which
products or services are available in market at cheap rate. When there is competition for some
stuff in market, then under this strategy individual thinks to launch something different which is
not relevant in current concept. There are some authors who have view that blue ocean strategy
will implemented in current market environment because this takes risk in consideration and if
there is risk, then probably possibilities of profits are also higher, which is core objective for
Mace Macro. If managers of Mace Macro implement blue ocean strategy, then it is easy for them
to make clear difference in services as compared to competitors. It is relevant and signifiant to
maintain distinct image among consumer which is possible through blue ocean model because
this provide new service at cheap rate (Harrison and et. al., 2017). So this is the major benefit to
Mace Macro through which they can update their technology with understanding its requirement
and major benefits achieved with it. In current market, people want new and innovative services
for maintenance through which they can get better services with minimum time, hence in this
case blue ocean strategy is best because this aims and implementing new style of working.
It is important for Mace Macro to use blue ocean model with the help of which they can
sustain in industry for longer time. Maintenance of corporate office is time and cost consuming
process and some times, there are possibilities that managers have less time due to which they
want their services to be quick and fast. So, under blue ocean strategy, it is easy for Mace Macro
to come with new strategy and provide satisfactory services to consumers (Chen, Delmas and
Lieberman, 2015).
As under strength of Mace Macro there is proper maintenance of assist of consumers, so
if managers will implement blue ocean model strategy, then they can plan for personalised
services. This assist in monitoring performance of organisation by client and in case of any
change , it can be easily implemented.
Mace Macro have good and skilled workers which are working to make schemes for
consultancy services to corporate houses. If they implement blue ocean model strategy, then it is
easy for managers to get new ideas. Managers can motivate workers to come with new policies
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and provide them awards and rewards, so it is easy to retain and maintain long term relations
with skills and knowledgeable professionals.
For implementing blue ocean model strategy, there is requirement of new and latest
technology with electricity infrastructure, but in Oman there is less technological development
(Bergh and et. al., 2016). So this model is not implemented in proper and effective manner. It is
estimated that economy of Oman will improve in near future, hence in this case, there are
possibilities that Mace Macro does not get proper sources of finance for the purpose of launching
new ideas. Hence this gives negative impact on organising new ideas. Oman is the country with
uncertain economy, and in order to implement blue ocean strategy there will be use of some new
and innovative ideas which is not positive in context Mace Macro.
Mace Macro have threat of new entrances, hence if they are using new and innovative
strategies for improving their services under blue ocean strategy, then they can sustain in
industry. There is no fear of competition with new entrances. This is the major benefits which
Mace Macro avail with use of this strategy.
From the above discussion, it is clear that there are possibilities of some issues with
implementation of blue ocean model strategy but at the same time, this provides many benefits
through which this stare is beneficial in current market. This plan of working is relevant and
beneficial in current market because this focus on ways through which consumer get new
services at cheap rate (Zhao and et. al., 2017). These days, organisations have to sustain in
industry by not only competition and marketing but with coming with new strategy to provide
new services. There is requirement of customised services to clients then it is easy for Mace
Macro to conduct it with blue ocean model strategy.
PART 2
Blue Ocean Strategy
Blue Ocean Strategy is based on the idea that every enterprise can achieve its objective of
earning higher profits by creating a new market demand in a non competitive market. This
strategy focuses on incurring minimum cost to open new market space and create new demand
(Yorio, Willmer and Moore, 2015). This strategy is applied to Mace Macro facilities
management segment of Macro Corporation who has recently moved into new business
environment of Oman for project at National Museum. This is a multinational organisation that
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operates in more than 40 nations across the globe. Entering into a new business environment of
Oman for Mace Macro organisation for providing facilities services brings more competition
because of already established companies in Oman. As this is considered as a liberal state and
government over their has good international business relations to keep attracting foreign
investment. This will ease the process of entrance into Oman for providing facilities services by
Mace Macro corporation. In the recent trend it is seen that GDP of Oman is increasing with
higher rate with only 1% inflation rate. This attracts more foreign companies to establish in
Oman market. Mace Macro focus on working with skilled workforce and population in Oman is
quite skilled and this gives organisation benefit of better work quality (Michael, Storey and
Thomas, 2017). When services to Nation Museum is provided by Mace Macro the application of
legal requirement will be quite minimal. Mace Macro organisation works as construction
organisation that is already established in Oman and enhancing a new branch in the same country
for facilitating services will termed as a basis that gives more chances for success in business.
Findings of the situation provides various issues that are faced by Mace Macro
organisation while spreading its businesses of facility services in Oman. As a managed service
company where services are outsourced it becomes more expensive then self driven services. In
the past years due to shortage of labour cost of providing services has increased to a certain level.
As tenders in Oman is provided to the lowest bidder due to high competition and no quality work
is concerned in the country. Bargaining power of the buyer is high as the number of consumers
for the services is limited for Mace Macro organisation. Mace Macro organisation works with
skilled labours and technology equipments but infrastructure of Oman is still developing and
electronic services are not a priority for the culture. Government policies are not appropriate in
the nation and that affects international firms working in Oman. Economy of Oman keeps on
fluctuating that will make businesses unstable in long run to survive (Baumgartner and Rauter,
2017).
Grabbing a new business opportunity is simpler then holding on it and continuously
generating more and more profits through this by expanding it. A numbers of businesses have
disappeared over the years and who use to be market leaders at some point. Application of Blue
Ocean Strategy by Mace Macro organisation helps in resolving the issues that arises through
general performance of the organisation.
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