Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant

Hal

Rating: really liked it
The signal-to-noise ratio of business books generally tends towards zero. They fall into one of three categories: baked-over platitudes designed to reinforce the self-esteem of the reader (see First Break all the Rules), laughably faulty reasoning (see Good to Great), and interesting ideas that are overextended and driven into the ground (see The Tipping Point). Fortunately for Blue Ocean Strategy, it tends towards the latter.

There are a few good ideas in the book, but they are shrouded in unnecessary jargon and applied precariously to far too many companies.
It uses the holy grail of business books: create a structured, numbered framework for analysis (see The 7 Habits of Highly Successful People or The 21 Indispensable Qualities of a Leader or at least 1000 others) and then cherry-pick examples that can fit into the framework (see Built to Last).

All this aside, the fact that is directionally correct in advice and contains some thought-provoking ideas earns it a couple of stars. Unfortunately, I may never be able to sell my business book idea: It's All Due to Luck and Nepotism.

Robert

Rating: really liked it
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant
W. Chan Kim and Renée Mauborgne
Harvard Business School Press

This is an especially thought-provoking book that, as have so many others, evolved from an article published in the Harvard Business Review. According to Kim and Mauborgne, "Blue Ocean Strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant...This book not only challenges companies but also shows them how to achieve this. We first introduce a set of analytical tools and frameworks that show you how to systematically act on this challenge, and, second, we elaborate the principles that define and separate blue ocean strategy from competition-based strategic thought." The material provided by Kim and Mauborgne is essentially worthless, however, unless and until decision-makers in a given organization accept their challenge, are guided and informed by the six principles, and effectively use the tools within appropriate frameworks. The responsibility is theirs, not Kim and Mauborgne's. To assist their efforts, Kim and Mauborgne focus on several exemplary companies that have dominated (if not rendered irrelevant) their competition by penetrating previously neglected market space. They include the Body Shop, Callaway Golf, Cirque du Soleil, Dell, NetJets, the SONY Walkman, Southwest Airlines, Starbucks, the Swatch watch, and Yellow Tail wine.

All of these Blue Ocean strategies created new or much greater value for customers. Their emphasis is on the quality of experience, not on the benefits of a new technology. According to Kim and Mauborgne, their research indicates that "the strategic move, and not the company or the industry, is the right unit of analysis for explaining the creation of blue oceans and sustained high performance. A strategic move is the set of managerial actions and decisions involved in making a major market-creating business offering." The cornerstone of a Blue Ocean strategy is value innovation that occurs "only when companies align innovation with utility, price, and cost positions. If they fail to anchor innovation with value in this way, technology innovators and market pioneers often lay the eggs that other companies hatch." For Kim and Mauborgne, value innovation is about strategy that embraces the entire system of a company's activities. It requires companies to orient the whole system toward achieving a "leap" in value for both buyers and themselves. Kim and Mauborgne explain HOW to create uncontested market space wherein competition is essentially irrelevant.

Greg

Rating: really liked it
Kind of a stupid book. The overall premise is, don’t compete directly with your competitors, create new markets. Of course, it falls into the classic trap that all business books seem to fall into, which is looking only at cases that support the theory and ignoring all that don’t. The theory itself is pretty obvious when you look at it - basically it argues that making a profit in any commodities market boils down to reducing costs, and that when your competitors cannot directly compete against you, you will make much more money. This is essentially the classic economic picture of perfect competition vs monopoly, and is quite obvious.

Furthermore, many of the examples he uses have only a tenuous connection to his theory. For example, he tries tying the turnaround of the NYPD to his theory. It was an interesting story, but I’m still scratching my head how targeting hotspots and shifting resources is an example of Blue Ocean theory.

Doug Lautzenheiser

Rating: really liked it
The authors provide case studies on how some companies left their "bloody-red" oceans of competition for completely open blue oceans where they were unique.

Some are well-known business stories, such as Southwest Airlines becoming a low-cost provider. However, the book provides details into Southwest's underlying business strategies that may not be well known. Other case studies gave new insight into various companies and their product strategics. One interesting story, for example, was [yellow tail], the Australian wine company that stepped outside of the traditional wine marketing with a simpler offering targeting casual drinkers.

The book covers the "strategic canvas" for analyzing competitors and planning a new market space. It then outlines six different principals for creating your own "blue ocean" strategy:

1) Reconstruct market boundaries
2) Focus on the big picture, not on the numbers
3) Reach beyond existing demand
4) Get the strategic sequence right
5) Overcome key organizational hurdles to make blue ocean strategy happen in action
6) Build execution into strategy from the start to build organizational trust and commitment

MissUnderstoodGenius

Rating: really liked it
This well-written book seems like common sense however it is an eye-opener for less sophisticated colleagues who doesn't know much about competitive advantage. It arguments how contested markets ("red oceans") should look for uncontested markets ("blue oceans"). Everything in this book is common sense. Nintendo is another high-profile example. Satoru Iwata, Nintendo's CEO, has referred to the Blue Ocean Strategy in interviews.

I do think the Blue Ocean Strategy is nothing without execution though. I think a large number (maybe more than 50%) of companies do not have a strategy. So it is not just execution that is missing. In fact, execution is easier once you have a strategy. This book, like many other business books, fails because it only talks about success stories. It does not talk about the majority of examples of Blue Ocean failed or currently marginal businesses:
- SPARSH, an innovative computer interface (google Pranav Mistry)
- Electric cars, which were invented in 1899!

I wouldn't highly recommend it but its an interesting read for someone new to this concept. For others, I would suggest or should look at "The Innovator's Dilemma" by Clayton M. Christensen for a better treatment of the ideas and the root causes for why they work.

Ia Tjitrawasita

Rating: really liked it
Keywords: blue ocean - red ocean - value innovation

How to win the competition? You can challenge your opponents on a head-to-head competition. Suppose that your target is to book 200 contracts each month. In order to fulfil the target you can compete on pricing. It means that you should give bigger discount than your opponents.

But head-to-head competition has its own limitation. There is another way to compete. A smarter way. Chan Kim and Mauborgne propose another solution: don't compete with your competition, why don't you make them irrelevant!

The book idea is to give your customers better services without any head-to head competition. It gives you a framework helps you to re-design your products/services. It helps you find your niches.

The book is quite easy to read and has an excellent and brilliant idea. It's a must for anyone responsible in decision making.

Mike

Rating: really liked it
Blue Ocean Strategy is a business book that covers how to beat the competition by not trying to beat the competition. A red ocean symbolizes blood in the water, where companies are competing by traditional means (like price). The book advocates creating a category and explores a variety of topics to aid in creating a "blue ocean" such as value innovation, emphasis on the big picture, diminishing risk, and evaluating alternatives to your industry (and much more). The first half of the book seemed to be more about the strategic approach to category creation, where the second half of the book had more of a focus on people and management. I personally found the first half to be much more useful. I think there's better material out there for the management side of things. Overall, Blue Ocean Strategy was definitely worth the investment of time. I'd highly recommend it for entrepreneurs.

Marks54

Rating: really liked it
This is a business school sort of trade book that has been getting a lots of hype. I had to read it for some other purposes so I worked through the book rather than through the numerous HBR articles. The premise of this book is that firms should not bother with messy competition, which will limit their profits and keep them warring with other competitors. Instead, firms should redefine their businesses into new offerings that are appealing to customers but are in such conditions or situations that other firms cannot easily imitate them. This is "blue ocean" strategy - in which you are the only fish in a big pond. The alternative, of course, is "red ocean" strategy - red because there are other fishes in the pond, whose competition will bloody the waters. Get the analogy?? Examples are provided of firms that have done this and suggestions are made about how to copy them. The writing style is crisp.

OK, but the problem is that there is nothing new here.

Coming up with a distinctive position that is very attractive to customers and that will justify high prices and good profits is a very old idea. Who wouldn't want to do that? The problem is that finding such opportunities happens most times through a combination of some skill and more luck. The firms that do this, and the examples in the book, have not escaped competition and their advantage does not last for long on average.

Telling someone to go out and follow such a strategy is a little bit like the old joke about the cure to poverty being simple - step 1, get yourself a million dollars; Step 2 . . .
(I think Steve Martin originally did this.)

The examples are not really helpful. Given a successful firm, it will not prove hard to find a reason why it succeeded. That is not helpful for someone else moving forward.

Overall, this is a popular treatment of corporate strategy that oversimplifies a lot. Careful readers can find better meals on which to chew.

Van Edwards

Rating: really liked it
I had to read this book for a strategy class. Business strategy is all about how you intend to differentiate yourself from the competition and how you plan to get there. The premise of Blue Ocean Strategy is, as stated on page 4, "Red oceans represent all the industries in existence today. This is the known market space. Blue oceans denote all the industries not in existence today. This is the unknown market space." So the point of this strategy is to remove your business from the bloody sea of eat-each-other-alive competition and find or create a new field all to yourself.

But none of the examples cited in the book have created any "new industries". Southwest Airlines is still an airline. [yellow tail] is still a wine. Cirque de Soleil is still a circus. They do find ways to tap into new or specialized markets. So to me, these companies have more or less sailed to the edge of the red oceans, but they haven't completely left it.

What's bothersome to me is that the authors don't have an example of how they or someone else have taken a company through the steps to find that coveted blue ocean. What we have are existing companies who have differentiated themselves from their competition or tapped into a new customer base. So it seems as if the tenets of blue ocean strategy have been reverse-engineered to fit a handful of companies. This seems to be a research project that yielded some similarities between successful companies.

I'm not saying that their strategy is wrong, but perhaps I'd be more convinced of it if there were a company who successfully followed their method.

Joe

Rating: really liked it
A boring book with several great insights.

The take-aways:
- Competition can be tough. Well-defined business spaces (a.k.a. red ocean, filled with blood) are vicious.
- Instead of competing in red oceans, consider creating a new space (a.k.a. blue oceans, no blood)
- There are several ways to create a blue ocean. The main idea is to re-evaluate core assumptions about (1) who your customers are/could be, and (2) what your customers value.
- For example, "the circus" was traditionally for kids. It had animals. And clowns. And over-priced popcorn. However, Cirque du Soleil re-thought these assumptions. Did "the circus" *need* to be for kids? What about adults? Did it need to have animals? And 3-ring acts? What if it was more performative/thematic instead?
- By changing their value proposition or by targeting a specific customer segment, businesses in competitive spaces can carve out profitable niches.
- That said, be mindful of what prevents competitors from copying your strategy! Ideally, you can do find something valuable and then protect it, otherwise your blue ocean will turn purple... then red.

Sotiris Makrygiannis

Rating: really liked it
all my previous comments/critique was encapsulated on 2 appendixes at the end of the book so it confirmed my assumptions rather nicely. I believe he made for him self a blue ocean consultancy business and this book was the start of it? Beyond the Machiaveli political tips , everything else was around a catchy phrase and that what his main message seems to be. Rest are old theories in new color.

Mario Tomic

Rating: really liked it
This book is an essential read for any entrepreneur looking to compete in a saturated marketplace and build a successful business. Too many startups fail because founders try to compete directly with well-established companies that dominate the market. The Blue Ocean Strategy is a book about finding your niche within a niche so you can stay competitive and grow.

محمد الملا

Rating: really liked it
I read the book after reading the article published in HBR, the book is really valuable and will enrich the reader will a lot of perspectives, tools and frameworks ... i liked mainly the "Strategy canvas" form first sight .. what a great and powerful tool

This is clearly a must read book for every one interested in the filed of management or strategy, But i will emphasis and insist on these points:
- Before reading this book, Please, read other book related to strategy (I will advice: Michael E. Porter books, or at least his article: what is strategy?) - I figured that some ideas that told in the book already told before, but the author but it in the very very right context
- The theory needs to be challenged and examined by an independent party
- I expect that i will find a drawn chart for the process of creation the blue ocean strategy, the absence of this chart is making the book hard to follow and challenged

Note: I added a lot of quotes from the book into goodreads and social media platforms

Kislay Verma

Rating: really liked it
Full review at Solomon Says:

Let's go through the pros and cons of this book. The idea that there are no eternally excellent companies, and that the strategic move, instead of the company should be the unit of analysis is compelling. The authors argue that all companies make mistakes, so we should look to their strategic moves for excellence or the lack thereof instead of the companies themselves.

Now for the con, which is pretty much the existence of this book. Anybody even remotely familiar with business will realize what a gigantic truism Blue Ocean Strategy is. “Create awesome things that everyone and their grandmother wants.”. This is literally all the book says. Sure. Why Not!!! Just let me put on my magic hat!

Innovation of the type that Kim and Mauborgne are suggesting is very, very hard. The Blue Ocean Strategy fails to acknowledge this difficulty. It takes the greatest challenge of corporate strategy and peddles an oversimplified solution through anecdotes and fancy terms.

Blue Ocean Strategy is not a theory. There is neither hypothesis nor attempted proof here. The whole thing goes backwards from effects to causes. What little “theory” is given is self-validating. We already know what the traits of a successful product/service are. It adds value to peoples lives and makes money for the company. The authors have made these two the hallmark of their “value innovation”, and since every successful new business meets these criteria, the authors pretend that the theroy is valid.

The book is also guilty of what Nassim Taleb calls “survivorship bias”. It analyzes only successful cases of blue ocean creation. If there is any industry segment which is trying to create blue oceans, it is startups. How many startups did all that this book suggests and yet failed?

Blue Ocean Strategy is a great tag line, but is actually a descriptive work masquerading as prescriptive theory. Read it only if you must.

Trevor

Rating: really liked it
I remember as a child asking my dad why I should pick up skiing over snowboarding. He responded that while snowboarding was certainly fun, because of its popularity it was also commonplace. Reasonably talented teenage snowboarders were a dime a dozen on any ski hill. Good young skiers, however, were few and far between. Reflecting on the choice between becoming one of the unwashed masses of snowboarders or one of the few, the happy few skiers, I chose the latter. Over the years being a reasonably good skier has served me well, differentiating myself from many of my peers and has created numerous business relationships and opportunities.

Kim and his co-authors take this basic concept and apply it to business. They suggest that positioning one's company away from popular and hotly contested "red ocean" and moving to less frequented "blue ocean" can pay huge dividends.

Blue Ocean Strategy differentiates itself from many business strategy books in that it doesn't simply dwell on this semi-novel strategic formulation, instead it includes numerous tools and suggestions for actively moving a company from red to blue ocean. Although some of the suggestions strike me as too esoteric to prove useful in a real business, the majority are simple, straight-forward, and can be utilized as useful thought experiments if nothing else.

All in all I found the book engaging a worthwhile read.