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A strategy for third-party logistics systems: A case analysis using the blue ocean strategy

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  • Kim, Changsu
  • Yang, Kyung Hoon
  • Kim, Jaekyung

Abstract

One of today's most frequently discussed topics in the business world is how to escape from the intense Red Ocean and how to create an uncontested Blue Ocean. However, because there are few practical guidelines available on this topic, we will introduce a case study of a third-party logistics (3PL) provider, CJ-Global Logistics Service (CJ-GLS), to show how it aspires to be a leader in the newly introduced 3PL industry in South Korea. CJ-GLS is a latecomer in the logistics industry, and its resources, such as the number of trucks and warehouses, are relatively small in comparison to those of established companies. But, it has achieved a distinct competitive advantage through innovative information technology (i.e., RFID--radio frequency identification), which has enabled it to create an uncontested market space, electronic logistics business. One remarkable fact about CJ-GLS is that its swift growth comes not from attracting competitors' customers from the existing Red Ocean market but from creating a Blue Ocean market (3PL market), which previously existing incumbents ignored, and also from constructing a new business model founded on a RFID-based, ubiquitous-oriented 3PL system. Analyzed through a Four Actions Framework and characterized as Blue Ocean, this case study provides valuable information on how a company reinforces its competitive advantage from the Red Ocean while it transitions into a Blue Ocean by utilizing advanced information communication technologies.

Suggested Citation

  • Kim, Changsu & Yang, Kyung Hoon & Kim, Jaekyung, 2008. "A strategy for third-party logistics systems: A case analysis using the blue ocean strategy," Omega, Elsevier, vol. 36(4), pages 522-534, August.
    • Handle: RePEc:eee:jomega:v:36:y:2008:i:4:p:522-534
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    Cited by:

    1. Burke, A.E. & van Stel, A.J. & Thurik, A.R., 2009. "Blue Ocean versus Competitive Strategy: Theory and Evidence," ERIM Report Series Research in Management ERS-2009-030-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Fonseca, Gabriela B. & Nogueira, Thiago H. & Ravetti, Martín Gómez, 2019. "A hybrid Lagrangian metaheuristic for the cross-docking flow shop scheduling problem," European Journal of Operational Research, Elsevier, vol. 275(1), pages 139-154.
    3. Kim, Changsu & Oh, Eunhae & Shin, Namchul & Chae, Myungsin, 2009. "An empirical investigation of factors affecting ubiquitous computing use and U-business value," International Journal of Information Management, Elsevier, vol. 29(6), pages 436-448.
    4. Mohammed A. Hajar & Ammar Ahmed Alkahtani & Daing Nasir Ibrahim & Mohd Ridzuan Darun & Mohammed A. Al-Sharafi & Sieh Kiong Tiong, 2021. "The Approach of Value Innovation towards Superior Performance, Competitive Advantage, and Sustainable Growth: A Systematic Literature Review," Sustainability, MDPI, vol. 13(18), pages 1-33, September.
    5. André van Stel & Roy Thurik & Andrew Burke, 2008. "Investigating Blue Ocean v. Competitive Strategy: A Statistical Analysis of the Retail Industry," Scales Research Reports H200801, EIM Business and Policy Research.
    6. Ana S. M. E. Dias & António Abreu & Helena V. G. Navas & Ricardo Santos, 2020. "Proposal of a Holistic Framework to Support Sustainability of New Product Innovation Processes," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    7. Coltman, Tim & Devinney, Timothy M. & Keating, Byron W., 2010. "Best-worst scaling approach to predict customer choice for 3PL services," MPRA Paper 40492, University Library of Munich, Germany.
    8. Reaidy, Paul J. & Gunasekaran, Angappa & Spalanzani, Alain, 2015. "Bottom-up approach based on Internet of Things for order fulfillment in a collaborative warehousing environment," International Journal of Production Economics, Elsevier, vol. 159(C), pages 29-40.
    9. Konrad Stephan & Nils Boysen, 2011. "Cross-docking," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(1), pages 129-137, September.
    10. Anuj Mittal & Caroline C. Krejci & Teri J. Craven, 2018. "Logistics Best Practices for Regional Food Systems: A Review," Sustainability, MDPI, vol. 10(1), pages 1-44, January.
    11. Donghyun Choi & Bomi Song, 2018. "Exploring Technological Trends in Logistics: Topic Modeling-Based Patent Analysis," Sustainability, MDPI, vol. 10(8), pages 1-26, August.
    12. George PLESOIANU & Alexandru - Costin CIRSTEA, 2011. "Organically Produced Foods - A Competitive Approach for the Twenty-First Century in Terms of Blue Ocean New Strategic Concept," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(4), pages 697-705, October.
    13. Boysen, Nils & Fliedner, Malte, 2010. "Cross dock scheduling: Classification, literature review and research agenda," Omega, Elsevier, vol. 38(6), pages 413-422, December.
    14. Erik Hofmann & Florin Osterwalder, 2017. "Third-Party Logistics Providers in the Digital Age: Towards a New Competitive Arena?," Logistics, MDPI, vol. 1(2), pages 1-28, November.

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