Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renee Mauborgne, Harvard Business School Press, 256 Pages, $27.95, Hardcover, February 2005, ISBN 1591396190
Blue Ocean Strategy is another book in the sea of business strategy books. Sorry, bad pun. There are plenty of books that deal with developing strategy for competing in your existing markets, but what caught my attention with this book was Blue Ocean Strategy's focus on developing strategy in new, nonexistent markets.
The book starts with a descriptive approach and details a series of cases. Many of these companies found seams between markets to create new ones. Some examples include NetJets, NABI (Hungry), QB House (Japan), and Curves. For Curves, it was finding room between the do-it-yourself exercise market of books and videos and traditional health and fitness clubs:
"Since franchising began in 1995, Curves has grown like wildfire, acquiring more than two million customers, in more than six thousand locations, with total revenues exceeding the $1 billion mark...Curves built its blue ocean strategy by drawing on the distinctive strengths of these two strategic groups, eliminating and reducing everything else. Curves has eliminated all the aspects of the traditional health club that are of little interest to the broad mass of women. Gone are the profusion of special machines, food, spa, pool and even locker rooms, which have been replaced by a few curtained-off changing rooms."
You will find an equal amount of prescriptive how-to advice in the latter half of the book. Kim and Maubornge are big fans of the strategy canvas tool (a graphical tool for comparing customer-defined attributes among companies). You'll find out how to leverage the six types of buyer utility and understand the price corridor of the mass. They also spend time telling you how to talk to your employees, your shareholders, and your customers about blue ocean changes.
I don't recommend very many hard-core strategy titles, so that should give you some idea of what I think about the book. If you want to read an excerpt from Blue Ocean Strategy, visit http://www.800ceoread.com/excerpts. (Coming Soon)
BTW, IF YOU ARE INTERESTED IN GETTING THE FREE MONTHLY REVIEWS I DO, JUST EMAIL ME AT JACK AT 800CEOREAD DOT COM AND I'LL PUT YOU ON THE LIST.
“Blue Ocean Strategy” offers important and fresh insights into business strategy that challenges the widely accepted wisdom of competitive advantage and competitive benchmarking. In contrast to competion-based red ocean strategies, value innovation blue ocean strategies are created through the actions and beliefs of business leaders who do not accept the existing boundaries of their markets and industries.
While competition-based red ocean strategies see either differentiation or low cost as a strategic choice, companies following the logic of blue ocean strategy seek to break the value-cost trade-off by pursuing differentiation and low-cost simultaneously.
Up to this point, it has been taken for granted that creating new growth strategies was risky, left to entrepreneurs, and serendipitous. Kim and Mauborgne show that this need not be the case. Through their 15 years of research spanning over 100 years of business, Kim and Mauborgne have succeeded in formulating a comprehensive and systematic set of analytical frameworks to guide management teams in discovering new blue oceans while simultaneously reducing the risk that is typically assumed with growth.
Kim and Mauborgne articulate six principles for creating blue oceans, explain an associated framework to support implementation of each principle, and demonstrate how each principle will help business leaders to minimize each specific risk factor that is typically encountered during growth strategy formulation and execution efforts. Additionally the principles in this book will help business leaders to think through how to sequence their strategic moves, tune their business models and engage their organizations in the blue ocean strategy process so that they can not only create new ideas, but more importantly realize healthy profits from them.
“Blue Ocean Strategy” offers important and fresh insights into business strategy that challenges the widely accepted wisdom of competitive advantage and competitive benchmarking. In contrast to competion-based red ocean strategies, value innovation blue ocean strategies are created through the actions and beliefs of business leaders who do not accept the existing boundaries of their markets and industries.
While competition-based red ocean strategies see either differentiation or low cost as a strategic choice, companies following the logic of blue ocean strategy seek to break the value-cost trade-off by pursuing differentiation and low-cost simultaneously.
Up to this point, it has been taken for granted that creating new growth strategies was risky, left to entrepreneurs, and serendipitous. Kim and Mauborgne show that this need not be the case. Through their 15 years of research spanning over 100 years of business, Kim and Mauborgne have succeeded in formulating a comprehensive and systematic set of analytical frameworks to guide management teams in discovering new blue oceans while simultaneously reducing the risk that is typically assumed with growth.
Kim and Mauborgne articulate six principles for creating blue oceans, explain an associated framework to support implementation of each principle, and demonstrate how each principle will help business leaders to minimize each specific risk factor that is typically encountered during growth strategy formulation and execution efforts. Additionally the principles in this book will help business leaders to think through how to sequence their strategic moves, tune their business models and engage their organizations in the blue ocean strategy process so that they can not only create new ideas, but more importantly realize healthy profits from them.