Search This Blog

Monday, April 07, 2008


"Blue Ocean Strategy" is an exceptional book by W.C.Kim and Renee Mauborgne.
“Giving the people what they want is fundamentally and disastrously wrong. The people don’t know what they want …Give them something better”

Red oceans are all the industries in existence today—the known market space as understood today. Blue oceans, in contrast, denote all the industries not in existence today.

Blue Ocean strategy is nothing new. It has been existent over the ages. Many successful organizations and individuals have followed this strategy in the past. “Creating something new” is the simplest way in which I can sum up the philosophy of this book. In this book, the authors have just formalized the concept in a great way.

According to the authors, there is hardly any attractive or unattractive industry per se.
Blue Ocean can be created by reinventing, thinking out of box, creating new markets, and converting non customers into customers. The authors also stress the importance of consecutive rounds of blue ocean creation. Blue Ocean strategy is not a static achievement but a dynamic process, which can be created both by industry incumbents and new entrants.

“Value addition” is perhaps one of the most powerful phrases used during the business school lectures. This book speaks of something called “Value innovation”. Value innovators achieve a leap in value by creating new wealth rather than at the expense of competitors in the traditional sense. The concept is based on a non-zero sum game.

The authors have elucidated the concept using lot of examples and have suggested frameworks and models. Both conventional cases (like Model T of Ford and NYPD’s legendary chief Bratton) and numerous big and small organizations are explained in detail

The authors have created jargons (like “Placing kingpins in the fish bowl” and “Angels and devils”), which I am sure are quite popular already.

The basic theme of the book can be summed up as follows -

(1) Reconstruct the market boundaries (Look across alternative industries, strategic groups within industries, chain of buyers , complementary products, emotional appeal of buyers and finally time)
(2) Reach beyond the existing demand
(3) Get the strategic sequence right (exceptional utility, strategic pricing and target costing and adoption)

The authors have used the concept of strategy canvas where they study an organization with respect to its competitors. What differentiates a successful organization is its focus and divergence from the competitors well defined by a compelling tagline.

No comments: