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


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


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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    References listed on IDEAS

    1. Krumwiede, Dennis W. & Sheu, Chwen, 2002. "A model for reverse logistics entry by third-party providers," Omega, Elsevier, vol. 30(5), pages 325-333, October.
    2. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    3. Marchand, Donald, 2004. "Extracting the business value of IT: It is usage, not just deployment that counts!," Journal of Financial Transformation, Capco Institute, vol. 11, pages 125-131.
    4. Chen, Yuh-Wen & Wang, Chi-Hwang & Lin, Sain-Ju, 2008. "A multi-objective geographic information system for route selection of nuclear waste transport," Omega, Elsevier, vol. 36(3), pages 363-372, June.
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    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:1:p:168-:d:126537 is not listed on IDEAS
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Boysen, Nils & Fliedner, Malte, 2010. "Cross dock scheduling: Classification, literature review and research agenda," Omega, Elsevier, vol. 38(6), pages 413-422, December.
    7. Konrad Stephan & Nils Boysen, 2011. "Cross-docking," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(1), pages 129-137, September.


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