Blue ocean strategy
Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne is a book that offers a new perspective on business strategy. Instead of competing in existing markets, the authors suggest that businesses should create their own market, called a “blue ocean,” where there is no competition.
The authors introduce the concept of the “value curve,” which is a graph that shows the value of a company’s product or service compared to its competitors. They argue that companies should focus on creating new value curves, rather than trying to compete in existing ones.
To create a blue ocean, the authors suggest that companies should focus on six key principles:
Reconstruct market boundaries: The first step in creating a blue ocean is to identify and redefine the boundaries of the market. This involves looking at the industry from a new perspective and identifying areas where there are unmet needs.
Focus on the big picture, not the numbers: Rather than focusing on short-term profits and financial metrics, companies should focus on creating long-term value for customers.
Reach beyond existing demand: To create a blue ocean, companies must reach beyond their existing customer base and target non-customers who have not yet been served by the industry.
Get the strategic sequence right: The authors argue that it is important to get the strategic sequence right when creating a blue ocean. This involves focusing on creating customer value first, and then figuring out how to capture that value.
Overcome key organizational hurdles: Creating a blue ocean often requires significant changes to an organization’s structure, culture, and processes. The authors provide guidance on how to overcome these hurdles.
Build execution into strategy: Finally, the authors emphasize the importance of building execution into strategy. This involves creating a plan for how the company will implement and execute its blue ocean strategy.
Overall, Blue Ocean Strategy provides a fresh and innovative approach to business strategy. By focusing on creating new value curves, companies can differentiate themselves from their competitors and create new markets where there is no competition. The book is filled with real-world examples of companies that have successfully implemented the principles of blue ocean strategy, making it a valuable resource for any business leader looking to create a competitive advantage.