BACHELOR IN ACCOUNTANCY

SEMINAR IN MANAGEMENT ACCOUNTING

MAF 651

SEMINAR 1

COMPETITORS ANALYSIS VS BLUE OCEAN STRATEGY

SEMESTER MARCH 2020 – JULY 2020

PREPARED BY

MIMI SHAMIRA BINTI MASEK 2017638872

MAZNI FIFI IMANI BINTI YAHANI 2017638868

NURUL HAMIZAH BINTI MOHAMAD IZANI 2017668528

NUR’IZZATUL FADZLINA BINTI ZALUDDIN 2017639036

NADIA ARDILLA BINTI MOHAMAD NAZARI 2017639022

AC220 8H

PREPARED FOR

PM DR NORZIATON ISMAIL KHAN

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 TABLE OF CONTENT

CONTENTS PAGES

INTRODUCTION

COMPETITOR ANALYSIS

DEFINITION
OBJECTIVES
STEP IN COMPETITOR ANALYSIS
ADVANTAGES AND DISADVANTAGES

BLUE OCEAN STRATEGY

DEFINITION
OBJECTIVES
STEPS TO MAKE BLUE OCEAN SHIFTS
ADVANTAGES AND DISADVANTAGES
BLUE OCEAN STRATEGIC TOOLS
i. 6 Principles
ii. 4 Actions Framework
iii. Value Innovation
iv. Strategy Canvas

EXAMPLE COMPETITOR ANALYSIS VS BLUE OCEAN STRATEGY

COMPETITOR ANALYSIS vs BLUE OCEAN STARTEGY

CONCLUSION

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INTRODUCTION

1.0 COMPETITOR ANALYSIS

1.1. DEFINITION

Competitor Analysis can be defined as an assessment of the strength and weaknesses of

current and potential competitors. It provide both of an offensive and defensive strategic
context to identify opportunity and threats. In other meaning, competitor analysis or
known as Red Ocean Strategic is a head-to-head battle where the players of a particular
segment compete with each other remaining in the same market space that is within the
boundaries of the same industry of the principle of competitive advantage.

1.2. OBJECTIVES
 To study the market.
 To predict and forecast organization’s demand and supply.
 To study the market trend and pattern
 To develop strategy for organizational growth

1.3. STEP IN COMPETITOR ANALYSIS

Competitor Analysis starts with Industry. It is mean that the organization needs to
identify which industry that they want to compete which is in the same industry. The
organization can take a look at the market for their product and evaluate with other
organization within the same industry that would compete with.

Second step is Competitor. The organization can identify which competitors that they
will compete with. Once they have established some broad of categories, they can take a
look at the direct competitors to their product. These include any company that do the
same product or services in the same footprint with the organization.

Next, third step is Competitors Strategy and Weaknesses. At this step, the organization
needs to identify and study the reason behind competitor’s success and failure. For
example, while performing SWOT analysis they can identify and study the competitor’s
strengths, weaknesses, opportunities and threats for each competitor. It is important as
they can make as a benchmark to move forward from the competitors.

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Fourth step is Company Strength and Weaknesses. This means that the organization
needs to study the company’s own strength and weaknesses. After look at all the
competitors analysis, then they also need to analysis their own company strength and
weaknesses. More importantly, they need to analyse the data that against to their
company’s strategy and product. So they can know how far the company and product can
stand relative to competitors. From that, they can rectify and improve the weaknesses
identify from the competitors with preparing some strategies that can make the company
move forward.

For the fifth steps of competitor analysis is customer’s preferences. Most of the
organization focuses on customer’s priorities since that their priorities should become the
business priorities. Customer’s satisfaction is also become the priorities. Therefore, the
organization should try to give a full satisfaction to the customer since that it can give a
big success to the organization. In order to give the best satisfaction, the organization
should study on the future and current customers’ needs and wants.

Next is barrier to the markets. The barriers mostly exist to the potential competitors. So
the potential competitors could be exposed to the higher barriers and also could take a
longer time in order for them to enter in the existing market. The barriers that may face by
the competitors to enter the market are such as patent, knowledge, high start-up cost and
market condition. The potential competitors need to prepare more knowledge’s and skills
before they decided to enter on certain existing market since that the existing market is
already had a lot of professional competitors.

Last steps on competitors analysis is strategic plans. Strategic plans are to allow the
organization to execute the strategies that they think are the best and make sure that the
strategies is effective. As a competitor, they should take steps to take part on all areas of
business operation. The business operation is consists of production, distribution, pricing
and marketing of goods and services. This step is to give chances to all competitors to get
involved in all business operation where they can explore more on their expertise of
business operation.

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1.4. ADVANTAGES AND DISADVANTAGES

The advantage from the competitor analysis is that it can assist company to set a price
of its products or services strategically and competitively. As for competitor who
wants to enter the market, they should have all the information on the markets industries
and how they will produce a product or services that can compete with others. So with an
effective analysis, the competitor has the potential to develop products or services that
can attract more customers using a strategic method such as give lower prices with a high
quality of products or services to the customers.

Next advantage is that a company can have better targeting customers. From the
analysis, the competitor can identify the demands from customers. Hence, it can open the
opportunity for the competitors to get involved in the markets. It is because the
competitors had recognised their customers and they can target on which customers that
they wants to sell their products or services. For example, smartphones have become a
demand among teenagers so the competitors should produce products that can attract
those teenagers.

At the same time, there are also disadvantages from the competitor analysis. The first is a
company may have incurred additional cost. In order to increase the quality of products
and also to introduce the products to the customers, there is a cost that company need to
bear. For them to introduce the products, they may need to spend more on the marketing
cost so that the customers have known and familiar with the brands of products. For the
quality, they may have to incurred more on inspection cost so that they quality of
products is in good condition.

Next, any flawed analysis of competitors might result in making poor decision. An
effective analysis can bring a good decision in the organization. So any unreliable and
untrusted data received by the organization can lead to a bad decision making. Hence, it
can affect the performance of the company and also the operation of products and
services. Therefore, the company had no capability to compete with other competitors in
the industry.

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2.0 BLUE OCEAN STRATEGIES

2.1 DEFINITION

Blue Ocean is defining as a new way of thinking, a new strategic mind set, a bold new
path to winning the future. Blue ocean strategy is referring to the creation by a
company of a new uncontested market space that makes competitors irrelevant. It is
means Blue Ocean is all the industries that are not in existence today and not used as
competition. There is opportunity for growth and make profit in this industry.

2.2 OBJECTIVES

The objectives are firstly to found systematic patterns that separate successful
market by creating strategic moves from market competing strategies. Meaning
here is the company have to find the ways that can make the product successful in
future which is by creating new strategic moves that can make the product enter
uncontested market space.

Next objective is the best way to beat the competition is to stop trying to beat the
competition. This means that, the company have to come out with the best idea so
that the product produce will lead the market and cannot be compete with the others
product.

2.3 STEPS OF BLUE OCEAN STRATEGY

To build Blue Ocean strategies get started with chooses the right place to start and
construct the right blue ocean team. Begin by working out what business, product
or services that the company want to enter the market. Then, started to construct and
put together the right team that going to handle the new product.

Next, understand current situation and market by get clear about the current
strategic landscape. The company have to make sure that every manager understands
about the strategic of the new product. So that the objective can be achieve and
misconduct in the organisation can be avoid.

Then, imagine for how long the product will stay in the market. This can be done
by uncover what limits the size of the industry and discover the ocean of non-

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customers. The company have to make sure that the product is suitable for all
customers and the company have to find a new solution to existing problems.

The company also have to find how they are going to stay in the market for the
long term. This means applying a systematic process to reconstruct market
boundaries and create new market space. The company also have to develop
alternative of blue ocean opportunities.

The final step is company select the blue ocean move by producing the product
and doing rapidly test in the market. This can be done by getting continuous
feedback from the customer then if there is negative feedback from the customers
improve it to maximize its potential.

2.4 ADVANTAGES AND DISADVANTAGES

There are several advantages and disadvantages of blue ocean strategy. First
advantage is the company will incur high profit margin in a new market. There is
only one way to achieve and sustain high performance by stop trying to beat the
competition and instead swim towards blue oceans of uncontested market space.
Then, the company will generate more profit with less competition and the revenue
will increase year after year.

Next, Blue Ocean can create brand equity that could last for a decade. An
excellent new product or services could stand for a long time in the market especially
when there are no others product could beat it. This is because the company already
gains the loyalty customers and company will make sure the product will satisfy the
need and demand of the customers.

Besides, in the blue ocean also the new product does not make the customer
choose between value and affordability. This is because the customers do not have
any choice as the product is the only once that enter the industries and the product
already become customer favourites for a long time if the company fulfil the demand
and give satisfaction to the customers.

The disadvantage is firstly high possibility of risk. As a company that produce a new
product which is not familiar among the customers they need to prepare with every

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risk that will occur. Every of the new product there will be a lot of weakness. So the
company have to overcome it quickly by getting feedback from the buyers.

Next, it is quiet difficult to come up with futuristic ideas, identify colossal and
untapped markets. As a new market, the company needs to make sure that product
or services that being produced can really attract customers. This is important as
customers need to believe and trust the company about the new product which is can
fulfil their needs and wants.

Lastly, organisations have to be smart and clear. The marketing departments of the
organisations have to come out with the brilliant ideas to tackle the customers need
and demand. As we know every new successful product will face a lot of competitors.
So organisations have to be advance to avoid the product from sink by another new
competitor.

2.5 BLUE OCEAN STRATEGIC TOOLS

2.5.1 6 PRINCIPLES

First principles is, reconstruct market boundaries. This principle identifies the way
for managers to create new market space without being competed with other
competitors. This principle addresses the search risk many companies struggle with.

Second, focus on the big picture, not the number. The principles illustrate on how
managers design their company’s strategic planning by focusing on understanding
customer needs, the product that the current market providing and figuring out
what customer needs that current market is not providing. These principles drive
managers to focus on overall view of the market rather than immersed in numbers.

Third, reach beyond existing demand. Competitors have their own target buyers,
however to create the new demand of blue ocean market, managers must challenge the
conventional practice to meet existing customer’s need and wants and also focusing
on the potential future customers.

Next, get the strategic sequence right. Companies need to build their blue ocean
strategy in the sequence of buyer utility, price, cost, and adoption. This allows
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them to build a successful business model and ensure that a company profits from the
blue ocean it is created.

Fifth principle is, overcome key organizational hurdles. Once the blue ocean is
created, companies may face four types of hurdles which are motivation hurdles,
politic hurdles, cognitive hurdles and limited resources hurdles. However, tipping
point leadership can be applied to overcome the hurdles and the cost incurred is low.

Lastly, build execution into strategy. Management must build people’s trust and
commitment to motivated people in executes blue ocean strategy. The principle
allows companies to reduce the management risk of distrust among the
subordinates and manager, non-cooperation among the employees, and even sabotage
towards each other.

2.5.2 4 ACTIONS FRAMEWORK

The four steps to create blue ocean strategies which are:

i. Create: The first factors help managers discover new sources of value for
buyers by creating the new market that had never offered in the market
previously in order to fulfil customer needs and wants.
ii. Reduced: This factor is to reduce any services or products that the company
offer to the customers that are over-designed in order to keep in the race to
beat the competition and minimize the cost of production and avoid any
wastage.

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 iii. Eliminate: The elimination of factors that have long competed and no longer
have value to the market. The aim is to see the business opportunity that has
been created in the past.
iv. Raise: The last step is to improve the factors that are capable of exceeding the
industry. The company tries to improve what is considered to be a reasonable
for the industry that will raise an opportunity to develop business.

2.5.3 VALUE INNOVATION

Value innovation is the simultaneous pursuit of differentiation and low cost, creating
a leap in value for both buyers and the company. Because value to buyers comes from
the offering’s utility minus its price, and because value to the company is generated
from the offering’s price minus its cost, value innovation is achieved only when the
whole system of utility, price, and cost is aligned. Cost savings are made by
eliminating and reducing the factors an industry competes on. Buyer value is lifted by
raising and creating elements the industry has never offered.

Value innovation can be promoted by following four steps. Firstly, identify and
articulate the company’s prevailing strategic logic. Secondly, challenge it.
Thirdly, think about the industry’s assumptions, the company’s strategic focus,
and offerings that are taken as given. Forth, reframe the company’s strategic
logic around value innovation, and ask the following four questions which are
eliminate, reduce, raise, and create.

2.5.4 STRATEGY CANVAS

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 Strategy Canvas is a central diagnostic tool and an action framework that graphically
captures, in one simple picture, the current strategic landscape and the future
prospects for an organization.

The horizontal axis on the strategy canvas captures the range of factors that an
industry competes on and invests in, while the vertical axis captures the offering level
that buyers receive across all of these key competing factors. A value curve or
strategic profile is the graphic depiction of a company’s relative performance across
its industry’s factors of competition.

The strategy canvas allows your organization to see in one simple picture all the
factors an industry competes on and invests in, what buyers receive, and what the
strategic profiles of the major players are. It exposes just how similar the players’
strategies look to buyers and reveals how they drive the industry toward the red
ocean. Importantly, it creates a commonly owned baseline for change.

The strategy canvas serves two purposes:

 It captures the current state of play in the known market space, which allows
users to clearly see the factors that an industry competes on and invests in,
what buyers receive, and what the strategic profiles of the major players are.
 It propels users to action by reorienting their focus from competitors to
alternatives and from customers to noncustomers of the industry and allows
you to visualize how a blue ocean strategic move breaks away from the
existing red ocean reality.

3.0 EXAMPLES

Competitors Analysis (Red Ocean) Blue Ocean Strategy

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Mamee & Maggi (A Variety of Snacks)
 This competitor is in the same industry with
Mamee-Double Decker (M) Berhad. In this
company they had a same consumer of the product
for example Maggi a brand of instant noodle.
 Miami to hold rival branding for their beverages,
particularly cultured drink, for example, nutrigen
cutltured drink is competing against various other
brands like Yakult, vitagen and solivite. However,
Mamee a lot of competitors in the food industry,
this company had loyal customer how will repeat to
buy the product. 40% of customers are quite loyal
and repeat buyer for Mamee products while 60% of
them are somewhat in middle as they also have
other preferences and branding in buying consumer
goods products.
 Based on the survey conducted, the customer
prefers brand Yakult and vitagen more compared to
nitrogen which comes from Mamee products. This
is believed due to the reason that Yakult is better in
terms of quality as they contain probiotics.
 Mamee-Double Decker (M) Berhad Noodles,
Mister Potato and Double Decker are the most
favorite products that produce by Double Decker
(M) Berhad. Because of those several products are
good in tastes and the price is not too expensive.
Compare to product from other company such as
Pringles, Indo Mee, Maggi that more expensive.
However, Mamee need to face this process of
business which is needed to compete with other
company to sale their product.
4.0 COMPARISON
COMPETITOR ANALYSIS
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Uber (Ridesharing Service)
 Uber is a ridesharing service that
connect passengers with taxi drivers
through its own smartphone
application and Uber App also allows
customers not only to request or book
rides but also track their reserved
vehicle’s location.
 Uber’s blue ocean strategy can be
analyzed using the ERRC Grid where
in the company eliminated the hassles
of booking taxi, paying the driver
exactly or change problems, tipping
issues, arguments & denial of
services, reduced the problems of
drivers too along with customers by
matching the rides and Uber just takes
20% or less from total fare and rest
goes to drivers, drastically raised the
customer service levels and comfort
levels and created a new market by
using the latest technologies and
devices.
 Uber does not project itself as luxury
car service but as reliable car service
and the company is facing not only
facing tough competition from its
competitors but also facing many
regulatory hurdles in different
countries and complaints from the
local cab service and taxi players.
BLUE OCEAN STRATEGY
 Compete in existing market space
 The company or organization is
competing with other competitors
within in the same industry or market.
They may also compete with the same
kind of products or service. So
whoever had the best quality of
products or services can attract many
customers.
 Beat the competition
 The competitors within the same
market should have enough
knowledge’s and skills in order for
them to be prepared to compete in the
competition. If they want their
company to be successful, they must
beat the competition in the market.
 Exploit existing demand
 A company had a potential to exploit
the demand if they had a consistent
performance. They need to be better
than any other competitors so that the
customers only choose their products
or services in that market.
5.0 CONCLUSION
 Create uncontested market space
 Companies who create or enter into a
new industry of their products or
services which no competitors exist in
that market. It gives a bigger
opportunities to the company to be
successful in their new market
where’s no other companies is
competing with them.
 Make the competition irrelevant
 A company does not have to enter in
any competition in the market where
the competition in the market is
irrelevant. They do not need to
compete with others since their
company is the main brand in the
market.
 Create and capture new demand
 Companies can create a new demand
among the customers. It is because
their products or services is
something new and also gives
benefits to the customers.
Furthermore, there are no other
companies who enter in that market.
For examples such as Grab.
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As a conclusion, for both competitor analysis and blue-ocean strategy had its own strength
and weaknesses. Therefore, it depends on the companies or organizations itself on how they
will adapt the situation in both market.

As for competitor analysis, the potential competitors who want to enter the existing market
should be ready with all skills and knowledge’s in order for them to compete in the markets.
In this analysis, it may be challenging to the competitors because they need to compete with
many others competitors. While for blue ocean strategy, the companies may have a high
opportunity for entering new market or industry. The companies should be creative in
creating products so that it can control the new market and also to attract more customers.

From the comparison of those analysis, we can identify that blue ocean strategy would be
better than the competitor analysis. It is because that blue ocean strategy is less risky than
competitor analysis in term of competitors in the market. The companies should create a new
products or services that no other companies produce and enter into market that had no other
competitors can gives high chances for being a successful company. Furthermore, it is easier
to control the market or industry if there is no competition between the other companies. A
company who produce a products or services and enter it first may become the main brand of
the industry. Lastly, they can attract many customers to focus on their products and services
only without consider for any other products.

6.0 REFERENCES

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Books

Works Cited
Babette, C. F. (2003). Strategic and Competitive Analysis: Methods and Techniques for Analyzing
Business Competition. Upper Saddle River: Prentice Hall.

Chan, K. W. (2015). Blue Ocean Strategy: How to create uncontested market space and make the
competition irrelevant. Boston, Massachusetts.

Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New
York.

Web Sites

Works Cited
Denning, S. (n.d.). Forbes. Retrieved february 29, 2020, from Forbes web sites:
https://www.forbes.com/sites/stevedenning/2017/09/24/moving-to-blue-ocean-strategy-a-five-
step-process-to-make-the-shift/#7de081817f11

Gartenstein, D. (2018, november 21). Bizfluent. Retrieved march 1, 2020, from Bizfluent web sites:
https://bizfluent.com/info-8455003-advantages-disadvantages-economic-competition.html

II, M. D. (n.d.). SlideShare. Retrieved february 29, 2020, from SlideShare web sites:
https://www.slideshare.net/infotech101/blue-ocean-strategy-12338451

Mauborgne, C. K. (n.d.). Blue ocean strategy. Retrieved febuary 29, 2020, from Blue ocean strategy:
https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/

Moore, K. (2019, april 9). Shopify Blog. Retrieved march 1, 2020, from Shopify Blog web sites:
https://www.shopify.com/blog/competitive-analysis

White, C. (n.d.). HubSpot. Retrieved march 1, 2020, from HubSpot web site:
https://blog.hubspot.com/marketing/competitive-analysis-kit

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