Impact of Blue Ocean Strategies on Firm Performance: An Integrated Theoretical and Literature Review towards Implementation

Abstract

In the last few decades, competition has been at the peak of all major industries, and this has been heightened by globalisation, technological disruptions, industry convergence, emerging economies, increased customer demands, and aggressive competitive behaviour. Subsequently, organisations have been forced to adopt strategic positions such as blue ocean strategies to enhance performance. Owing to these developments, this study's main objective was to establish the effect of blue ocean strategies on firm performance. Therefore, this study sought to conceptualise the concept of blue ocean strategies and firm performance, focusing on identifying theoretical, conceptual and empirical gaps and proposing an appropriate theoretical model to respond to these gaps. In advancing prepositions presented in this paper, several theoretical streams were used to underpin this study. Value innovation framework was used to advance arguments on how firms can pursue industrial efficiency logic, knowledge-intensive logic and network logic to enhance the impact of blue ocean strategies on performance. The resource-based view was reviewed to further advance the opinion that blue ocean strategies can only be applied based on the extent to which a firm holds competitive resources and how the firm can sense, seize and reconfigure resources to match capabilities resources held by organisations to enable them to derive competitive advantage. Myles and Snow's typology theory has been used to explain proposed patterns of strategic behaviour that firms should implement to align them with environmental changes while pursuing blue ocean strategies. Additionally, an empirical review of studies done on blue ocean strategies and firm performance has been undertaken with the objective of exposing the empirical, contextual and theoretical gaps that have formed the basis for advancing prepositions of this paper. The literature review undertaken incorporated proposed blue ocean strategy indicators, specifically value innovation, market intelligence, alignment, and risk management strategies, as well as the mediating and moderating role of dynamic capabilities and regulatory framework on the relationship between blue ocean strategies and performance. The study findings demonstrate that the implementation of blue ocean strategies influences performance and that regulatory framework and dynamic capabilities have a moderating and mediating role in this relationship. The paper puts forward a recommendation for further studies on blue ocean strategies and firm performance with a view to additional variables that affect the relationship between blue ocean strategies and firm performance.