Friday Book in a Page: Blue Ocean Strategy


Blue Ocean Strategy by  W. Chan Kim and Renee Mauborgne

What if instead of battling it out within the confines of an existing industry or by stealing customers from your competitors you could instead create uncontested market space and make the competition irrelevant?  This is the business theory laid out in Blue Ocean Strategy.

Key Messages of the Book:

  • Red Oceans are:  The known marketplace.  The boundaries are defined and accepted.  The competitive rules of the game are understood.  Companies try to outperform their competitors.  Fight it out until the ocean is bloody and red.
  • By contrast, Blue Oceans are:  The unknown marketplace.  They are untainted by competition.  Demand is created – rather than fought over.  There is ample opportunity for growth that is profitable and rapid.
  • A Blue Ocean is most commonly created within a Red Ocean when a company alters the boundaries of an industry
  • Blue Ocean strategy makes the competition irrelevant by creating a leap in value for both buyers and the company.
  • What kind of strategic logic is needed to guide the creation of Blue Ocean strategies?
  1. Blue Oceans are not about technological Innovation.  Leading-edge technology is sometimes involved but is not a defining feature.  They are often created by simplifying technology
  2. Incumbents often create Blue Oceans as they are propelled to by the entrance of new competitors
  3. The appropriate unit of analysis for explaining the creation of Blue Oceans is the Strategic Move – the set of managerial actions and decisions involved in making a major market-creating business offer.
  4. Creating Blue Oceans builds brands.  Blue Ocean Strategic Moves are so powerful that they can create brand equity that lasts for decades.

Lasting Message: Netflix ousted Blockbuster not by competing head to head, but by delivering the same value in an entirely different way. Their key insight was that the reason people rented movies was that they didn't want to leave the house.

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