TL;DR
Blue Ocean Strategy challenges the traditional competitive approach of red oceans, where companies fight for market share in existing industries. Instead, it proposes creating blue oceans—uncontested market spaces where competition becomes irrelevant. The book provides a framework and tools for companies to identify and develop blue ocean opportunities, leading to profitable growth and innovation.
Table of contents
Open Table of contents
Author & Writing Background
W. Chan Kim and Renée Mauborgne are professors of strategy at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute. They are renowned for their research on blue ocean strategy and have consulted with numerous companies worldwide. Their writing style is clear, concise, and insightful, drawing on extensive research and real-world examples.
Key Takeaways
Value Innovation
The cornerstone of blue ocean strategy, value innovation focuses on creating new value for customers while simultaneously reducing costs. It involves breaking the value-cost trade-off and making the competition irrelevant.
The Strategy Canvas
A visual tool for analyzing the current competitive landscape and identifying opportunities for creating blue oceans. It helps companies understand how they compare to competitors and where they can differentiate themselves.
The Four Actions Framework
Guides companies in reconstructing market boundaries and creating new value curves. It involves eliminating, reducing, raising, and creating factors that the industry competes on.
Six Paths Framework
Provides six approaches to reconstruct market boundaries by looking across alternative industries, strategic groups within industries, buyer groups, complementary product and service offerings, the functional-emotional orientation of an industry, and time.
Buyer Utility Map
Helps companies understand the key utility levers that affect customer buying decisions. These levers include customer productivity, simplicity, convenience, risk, fun and image, and environmental friendliness.
Three Tiers of Noncustomers
Identifies potential customers who are not currently part of the market. These tiers include ‘soon-to-be’ noncustomers, ‘refusing’ noncustomers, and ‘unexplored’ noncustomers.
Sequence of Blue Ocean Strategy
Outlines the steps involved in formulating and executing a blue ocean strategy, including buyer utility, price, cost, and adoption.
Tipping Point Leadership
Focuses on overcoming organizational hurdles and building a strong team to drive the implementation of blue ocean strategy.
FAQ about Blue Ocean Strategy
What is the main difference between red ocean strategy and blue ocean strategy?
Red ocean strategy focuses on competing within existing market space, while blue ocean strategy seeks to create uncontested market space and make the competition irrelevant.
Can any company implement a blue ocean strategy?
Yes, blue ocean strategy is applicable to companies of all sizes and industries. The book provides frameworks and tools that can be adapted to different contexts.
How long does it take to create a blue ocean?
The time it takes to create a blue ocean varies depending on the industry, company, and specific opportunity. However, the book provides a structured approach that can accelerate the process.
Blue Ocean Strategy Quotes
- “The only way to beat the competition is to stop trying to beat the competition.”
- “Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.”
- “In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of existing demand.”