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Business Administration QUESTION #9602
Question 1
A company pursues a 'Blue Ocean Strategy' by creating an entirely new market space rather than competing in existing markets. Which conventional strategic management tool is this approach most directly challenging, and why?
  • It challenges Ansoff's matrix — blue ocean strategy operates outside the product/market growth framework entirely
  • It challenges Porter's Five Forces framework — which assumes competition within a defined industry structure; blue ocean strategy makes the competitive forces irrelevant by creating uncontested market space where the five forces have not yet formed✔️
  • It challenges the BCG matrix — blue ocean products cannot be classified as stars, cash cows, question marks or dogs because they have no market share benchmarks
  • It challenges SWOT analysis — because in a blue ocean there are no external threats to analyze
Correct Answer Explanation
Porter's Five Forces analyzes competitive dynamics within an existing industry (rivalry, buyer power, supplier power, substitutes, new entrants). Blue Ocean Strategy (Kim & Mauborgne) argues that sustained profitability comes from making competition irrelevant by creating new demand in uncontested space — directly contradicting the premise that strategy is about competing better within a defined industry structure. The five forces literally do not apply until competitors follow the pioneer into the new space.