W. Chan Kim is the Co-Director of the INSEAD Blue Ocean Strategy Institute and a Chair Professor of Strategy and International Management at INSEAD. His book Blue Ocean Strategy, co-authored with Ren茅e Mauborgne, has sold 3.6 million copies and is recognized as one of the most iconic and impactful strategy books ever written. It is being published in a record-breaking 44 languages and is a bestseller across five continents. Kim is ranked in the top 3 management gurus in the world in the Thinkers50 listing of the World鈥檚 Top Management Gurus. He was selected for the 2011 Leadership Hall of Fame by Fast Company magazine and was named among the world's top 5 best business school professors by MBA Rankings. He also received the Nobels Colloquia Prize for Leadership on Business and Economic Thinking. He is a Fellow of the World Economic Forum and an advisory member for the European Union. He also serves as an advisor to several countries.
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 ), laughably faulty reasoning (see ), and interesting ideas that are overextended and driven into the ground (see ). 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 or or at least 1000 others) and then cherry-pick examples that can fit into the framework (see ).
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.
Kind of a stupid book. The overall premise is, don鈥檛 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鈥檛. 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鈥檓 still scratching my head how targeting hotspots and shifting resources is an example of Blue Ocean theory.
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant W. Chan Kim and Ren茅e 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.
Making competitors irrelevant by focus on distinct consumer value instead of benchmark versus rivals is the basic concept of this classic business book Only way to beat the competition is to stop trying to beat the competition
A solid book to think differently about the landed wisdom that you get what you pay for. The book argues that true customer value innovation is only achieved when costs are lower and quality is higher simultaneously. Some examples haven鈥檛 aged that well (including a stab at Microsofts lack of innovative capabilities), but an interesting framework nonetheless. More thoughts to follow 馃數馃寠馃搱
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
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.
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.
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.
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.
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.
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.
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.
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.
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. 鈥淐reate awesome things that everyone and their grandmother wants.鈥�. 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 鈥渢heory鈥� 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 鈥渧alue innovation鈥�, 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 鈥渟urvivorship bias鈥�. 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.
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
Chan Kim is considered one of top business strategy thinkers of our age. I am ashamed that his famous book 鈥淏lue Ocean strategy鈥� has been on my to-read list since 2005 when it was highly recommended by my MBA professor, but I was too busy at that time juggling a full-time job and a full time MBA program. Recently, I felt a need to update my knowledge of business strategy which happens to be my actual job! So, I finally picked it up.
The book starts with overpromised, sustainably growing, profits. Rolling my eyes, I kept reading. It is a short book after all, and I could afford a short timewaster. Soon, my rolled eyes flipped back into an intense gaze as I realized how profound and insightful this book really is. Here are the nuggets:
At a philosophical level, strategy had its origins in the military, a field that is, literally, a red ocean of bloody battle over a limited, specifically defined victory. Kim proposes a different origin story that is based on adventurous exploration of new continents and gold mines where companies do not fight for market share, but, instead, create new industries that never existed before.
The second insight in the book is that most business research focuses on the Company (GE, 3M, Apple, etc.) or the entrepreneur (Welch, Jobs, Elon, etc) as the indivisible unit of analysis. Kim realized that the true units of measure are the strategic decisions those businesses made (the T model, the personal computer, scotch tape). The book is a manual on how to replicate such strategies in any other company or industry.
Reminder of the blue ocean strategy development process (only helpful to those who read the book):
A) Two Analytical tools: (1) 鈥淭he strategy canvass鈥� and (2) the four forces to Re-examine value proposition: Eliminate, Reduce, Raise, and Create, then follow the following six principles for strategy formulation and execution:
B) Four principles to Formulate strategy:
1. Redefine market boundaries (six paths): (1) Alternative industries (Net Jets, NTT Docomo鈥檚 iMode, Cirque Du Soleil, Home Depot, SouthWest, Intuit), (2) Strategic group e.g., luxury versus value (Curves women fitness, Polo Ralph Lauren, Lexus, Champion group quality pre-fab houses), (3) Buyer group (Novo Nordisk鈥檚 NovoPen, Bloomberg terminals, Canon copier versus SAP ERP), (4) Complementary offerings (Nabi bus with low TCO, Dyson bagless cleaners, Philips filter Kettles), (5) Functional-emotional orientation (EtoF: QB House/GreatClips, DirectLine Insurance, FtoE: Cemex, Viagara, Starbucks), and finally (6) External trends over time (iTunes vs Napster, Cisco, CNN, Sex in the City)
2. Focus on the big picture not the numbers: Visual Awakening-> Exploration -> Strategy Fair -> Communication (e.g., Samsung corporate strategy development process, Value Innovation Program 鈥� VIP center in S. Korea)
3. Reach beyond existing demand : 鈥淪oon-to-be鈥� (Pret a manager) , 鈥淩efusing鈥� (Galloway big Bertha), and 鈥淯nexplored鈥� (JCDecaux street furniture, Tooth whiting solution, the Joint Strike Fighter-JSF fighter Jet F35)
4. Get the strategic sequence right: Buyer utility (technology/luxury does not equal value, Six stages of buyer experience from purchase to disposal, buyer utility map, Ford model T) -> Price (price corridor of the mass including same function different form (auto) and same objective different function (Theater v. Restaurant) more protection = more price -> cost (price minus) streamline operations (Ford), partnership (SAP v. Oracle) and changing the pricing model (Blockbuster) -> adoption hurdles Employees (Merrill Lynch eBrokerage Vs. Morgan Stanley鈥檚), business partners (e.g., A-SAP), and the general public (Monsanto).
Finally use the blue ocean idea index to rank the strategy across all above four principles.
C) Two principles for strategy implementation
5- Overcome four types of organizational hurdles (NYPD): 1- Cognitive: Ride the electric sewer and talk to disgruntled customers, 2- Resources: from cold to hot spots + horse trading, 3- Motivational: Kingpins, fishbowls, atomize scope, and 4- Political: Consigliere, angles, and devils.
6- Build execution into strategy using a fair process. Engagement, explanation, and expectations clarity. (Coolant selection, elevator factory)
Must read for both strategy practitioners and managers.
I only skimmed this book. Thought the charts were stupid. Reasonably interesting premise that would have been the right length for 100 pages or less, not a full book. The thesis is that in selecting your product-market fit, you can try to compete with everyone else (the crowded "red ocean") or you can try to be the only one in your market (the "blue ocean").
For example, if you're running a circus, you could try to compete with Ringling Bros. and plenty of lesser-known competitors, who were in a race to the bottom. (The book was written when Ringling Bros. was still in business, but their closure in 2017 just emphasizes the authors' point.) Or you can make a new market. Cirque du Soleil went after the adult market rather than appealing to families with small kids. Their product is obviously different, more theatrical; and instead of the same act all the time, they offer different performances, so there's a reason to keep going back. The price is also similar to live theater.
Another example is Curves: instead of trying to compete with other gyms, they offered something very specific, a convenient gym for busy women, with an easy-to-follow circuit routine and no mirrors. Authors Kim and Mauborgne are also fans of Novo Nordisk (marketed to patients instead of doctors by making insulin injections easier), Bloomberg Business (offered shopping to time-strapped traders, who then forced IT managers to buy the terminals), and the "broken windows" policing model of the New York police department (also described by Malcolm Gladwell).
Overall an enjoyable read, and I don't disagree with their premise, I just think it should have been a lot shorter.
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.
It was a booming marketing strategy that suddenly every body talked about. Even my 'ex' boss!
With curiousity I bought this book to find out what is this so famous new marketing strategy?!?!? when I finally read the book, actually there is nothing new in it. It is actually the same strategy that I've learned in university. Mainly it talks about DIFFERENTIATION AND BEING DIFFERENT, that's it.
Thanks God I didn't buy the original english version that cost a fortune!!
Ao ser lido em 2015, este livro soa um tanto datado, seja por tudo o que se escreveu depois sobre neg贸cios e estrat茅gia, seja pelas empresas utilizadas como exemplo. Mesmo assim, fornece uma teoria bem interessante sobre estrat茅gia de neg贸cios que, mesmo em tempos de (j谩 quase p贸s-) Lean Startup, ainda s茫o relevantes.