LIKE SO many great business books, this title evolved from an article published in the Harvard Business Review.
According to its authors, ‘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 shows companies how to achieve this though a set of analytical tools and frameworks showing how to systematically act on this challenge.
It then goes on to elaborate the principles that define and separate blue ocean strategy from competition-based strategic thought.
To assist their efforts, the authors focus on several top flight companies that have dominated their competition by penetrating previously neglected market space. These include Body Shop, Callaway Golf, Cirque du Soleil, Dell, NetJets, Dell, the Sony Walkman, Southwest Airlines, Starbucks, Swatch watches and Yellow Tail wine.
Of real interest is the authors’ assertion that each company pursued a strategy that enabled it to free itself from industry boundaries.
For Dell, this meant mass production of computers sold directly to consumers per each customer's specifications.
For Callaway, it was creating an enlarged ‘sweet spot’ on the golf club head to increase the frequency of solid contact for new or infrequent golfers just as, years ago, the enlarged Head racquet did so for new or infrequent tennis players.
According to the authors, the cornerstone of a Blue Ocean strategy is value innovation, which 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."
About the authors
W. Chan Kim was a professor at the University of Michigan Business School, has served as a board member for multinational corporations in Europe and the US and is an advisory member for the European Union.
Renée Mauborgne is a professor of Strategy and Management at INSEAD and Fellow of the World Economic Forum.
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BOOK REVIEW: Blue Ocean Strategy
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