A Study on Comparative Analysis of Red Ocean of Microsoft and Blue Ocean of Google Products Strategy and its Risk Factors: An Blue Ocean VS Red Ocean Model

Between the 1st and the 2nd calendar quarters of 2007 Google's (GOOG) sales increased from $3.664 to $3.872 billion. That's nearly 6%. In the same period Microsoft's (MSFT) sales decreased from $14.398 to $13.371 billion. That's a decline of over 7%. And it's the only time in the last ten quarters that MSFT experienced a March to June quarterly decline in revenues.

From March 30 to October 19, 2007 Google's market cap increased over 42% from $142.2 to $201.2 billion. In that same period Microsoft's market cap increased just a bit over 8% from $261.4 to $283.0 billion.

It's a common expectation that when one company's revenues increase at the same time as a rival's revenue declines, both stock prices will be affected. This is an expectation one could easily forget while tracking the valuation measures currently reported in popular financial services like Yahoo! (YHOO).

The Blue Ocean Strategy (BOS) framework promoted by them challenges and displays the ways in which an organisation can achieve the conventional trade-off amongst differentiation and low-cost. When it comes to building a blue ocean, what organisation wouldn't want to have an offering like Google's Search division? Its search engine is easy, fast, accurate – with an underlying algorithm that instantaneously sorts and ranks documents, images, and videos, making people more productive in finding information than most ever imagined. With nearly 65 percent of world market share, Google created a veritable blue ocean. Then there's Google Glass. Announced to the public in 2012, it was selected by Time Magazine as one of the "Best Inventions of the Year”. With this revolutionary digital eyewear, Google intended to create a new mass market for wearable computers. However, the initial excitement soon gave way to disappointment.

This progress has resulted in intensified competition generating a need for organizations to distinguish themselves and create value for customers. The purpose of this paper, hence, is using Blue Ocean Strategy Framework for the analysis of the ways in which value innovation has been exercised by various players of the google product market to create a competitive advantage (CA) for themselves and be the front-runner.