Winning by not competing: a fresh approach to strategy Since the dawn of the industrial age, companies have engaged in head-to-head competition in search of sustained, profitable growth. They have fought for competitive advantage, battled over market share, and struggled for differentiation. Yet these hallmarks of competitive strategy are not the way to create profitable growth in the future. In a book that challenges everything you thought you knew about the requirements for strategic success, W. Chan Kim and RenĂ©e Mauborgne argue that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, the authors argue that lasting success comes not from battling competitors, but from creating “blue oceans”: untapped new market spaces ripe for growth. Such strategic moves—which the authors call “value innovation”—create powerful leaps in value that often render rivals obsolete for more than a decade. Blue Ocean Strategy presents a systematic approach to making the competition irrelevant and outlines principles and tools any company can use to create and capture blue oceans. A landmark work that upends traditional thinking about strategy, this book charts a bold new path to winning the future.
Customer Reviews
Book NOT based on thorough research:
To quickly tell the quality of this book, note that the authors immediately discredit themselves by including two key words in their subtitle: “uncontested” and “irrelevant”. Social science research does not produce findings that justify such claims, so the authors are obviously extrapolating beyond any research they conducted and try to dupe non-academic popular book readers into thinking their research is solid. While you might think that the publisher created such subtitle against the authors will, you will actually find that the authors are deeply committed to their “blue ocean” ideology by using these words throughout the book.
The authors’ assertion that blue ocean strategy (strategy that creates previously non-existent products or services that the customers actually want) delivers higher profits is simply not true. First of all, the authors are only studying successful businesses employing blue ocean strategy. For all we know, other businesses that used blue ocean strategy that the authors did not study failed, proving that blue ocean strategy had nothing to do with success of those businesses that the authors did study. Second of all, the authors miss the concept of “expected value”. Competing in the red oceans (existing products that are commonplace) allows big companies to compute probability of success relatively easily, partly because the products’ success and demand is already clearly observable in the marketplace. Therefore, contrary to the authors’ claim, the red oceans have a big purpose that big companies should not ignore. Second of all, the authors claim that blue ocean products deliver higher profits is not substantiated. In many cases, new revolutionary products come with a higher cost of marketing, because the consumers may be confused by not being able to compare the new product against their existing choice set. However, the authors do not address this higher cost of “blue ocean strategies”. Additionally, because blue ocean products are newer than existing “red ocean products”, they probably have a higher rate of failure. Thus, while the maximum return from a “blue ocean strategy” might theoretically be higher vs. “red ocean strategy”, on average, given higher failure rate and higher marketing costs, the EXPECTED VALUE to the organization from either blue or red ocean strategy might actually be the same.
If you want an unbiased, evidence-based overview of marketing strategy, you should buy Dr.Chernev’s Strategic Marketing Analysis instead of this book.
Great Even for Novice:
What can I say that has not been said about this book? Here is a more personal appreciation.
This is the first book I’ve read about branding and differentiation. The author is full of common sense but the
weird thing as that this type of common sense is not so common in business. Obviously this is not a step by
step guide to building a great business. There is no such thing. What you do get is a nice framework
to position your idea and see how you compare within your extended competitive landscape. Applying this
framework to your own idea might require more intuition than you think (otherwise creating the next best thing would be too simple) but the author uses many case studies as examples of how to use the framework.
Of course, he has the benefit of hindsight but that’s no reason to dismiss the ideas. Great book and fun to read.
Value Innovate - Don’t Be A Commodity!:
This book provides ‘out of the box’ thinking for any executives struggling with competition and being perceived as a ‘commodity’ in their marketplace. Innovating your value and differentiating yourself to the portion of the market that the masses of competitors are not servicing is one path to success. The examples of Cirque du Soleil, Yellow Tail Wines and NetJets shows how creative strategy can move you out of the ‘Red Ocean’ (competitive blood bath) and into the ‘Blue Ocean’ (new market realm) to ultimately make the competition irrelevant.
I highly recommend this book to my clients that feel like they are stuck in a ‘commodity play’. Value Innovate. Don’t be a commodity!
Kevin A. McCann
President & CEO
Executive Strategy Group, LLC
http://www.executivestrategygroup.com
“Value Defined, Value Delivered” ™
Bad Choice of Metaphor:
Aristotle tells in his Poetics about the figures of speech that can be used by poets and orators, then he adds: “It is a great thing to make a fitting use of each of one of these devices, but the greatest thing of all is being a master of metaphors. This alone can be gotten from no one else, and is the sign of born talent, since to use metaphor well is to have a sense for likeness.”
Conversely, to use a bad metaphor is a sure sign of poor taste. And to use it repeatedly and in an incoherent manner not only demonstrates lack of poetical sense, but also denotes poor reasoning.
In their essay, Kim and Mauborgne use the evocative powers of the ocean to help corporate executives craft innovative business strategies. This is altogether fitting: the sea is the mirror of man’s soul, and navigating on uncharted waters has always been a powerful metaphor of human endeavor. Management discourse is replete with terms borrowed from navigation, from being at the helm to toiling in the hold.
Indeed, as argued by the authors, corporate strategy would gain from distancing itself from the vocabulary of war-making and from using bellicose metaphors, and should instead develop the analogy with the art of seafaring. Forget Sun Tzu and Clausewitz, welcome to Bougainville and Cook. Captains of industry are more like masters and commanders of vessels riding with the tide of consumers’ demand than generals engaged in a battle with the competition.
The Blue Ocean therefore provides a good catch phrase for a spirit of adventure, endless possibilities, and the thrill of discovery. It is what every entrepreneur should aspire. The Red Ocean, in turn, is more difficult to construe. I have been reminded of the “wine-dark sea” of Homer, or of the River Tiber foaming with blood as in Virgil. The image here is menacing and frightening, and those waters should be avoided by all business leaders.
Provided, of course, the seagoing vessel is the object of comparison for a business enterprise. This is not very clear in the text. The authors sometimes refer to swimming, implying that the entrepreneur is compared to a large fish, maybe a shark. Indeed, only sharks competing for a bloody prey can turn the ocean into red. But if one has to espouse the form and character of a shark, on has to behave like one. For sharks, swimming in red oceans is much better than patrolling blue ones. Blood is what they are after, and therefore they love to cruise bloody waters.
The metaphor gets even more illogical. The authors write about creating one’s blue ocean within a red ocean, they give advise on how to unlock an ocean, or they refer to the cornerstone (sic) of a blue ocean strategy. Again if you are a shark, you can create your pool of bloody water within an ocean of blue, but the reverse is nonsensical. Creating an ocean defies common sense and even artistic license. Mixing blue and red will only give you purple. And cornerstones put into any pool of water will sink to the bottom.
Maybe I am trying to read too much into this metaphor. Like a simple melody or the silly lyrics of a song, its purpose is to stick to the mind and to become a self-evident reference. Blue and red oceans are sticky labels: even when you would like to ignore them, you cannot help but using them when you discuss their content. The reason behind this stickiness is self-reference: precisely because the image is the message, you cannot go beyond the metaphor to reach a core meaning. There is nothing beyond the call to imagination.
Easy to read, easy to understand:
I will not say this book is the defininate guide to success but does provide a new way of looking at the market, in particular an alternative look on the market.
By not only focussing on cost reduction, but more on getting more people interested in your product, this book gives some eye openers.
Even if it’s not practical for you, the book is easy and entertaining to read and therefore no waste of time.
