Wednesday, July 2, 2008

Blue Ocean Strategy - Book Review

For Strategist prepared by: Anuj Gupta [pg07anuj_g@mdi.ac.in]
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A Blue Ocean is a market space that is created by identifying an untapped set of customers, then delivering to them a compelling new value proposition. This strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers. This is done by modifying what is on offer so as to balance the customer needs and the economic cost of meeting those needs. This is as opposed to a Red Ocean, where the market is well defined and heavily populated by the competition. All parties in these markets are engaged in an intense competitive struggle for the same customers, with different and incremental yet easily comparable, value propositions.

The authors, W. Chan Kim and Renée Mauborgne have made a real contribution to advancing the thinking on business strategy, and they have this with a style which does not even make this book a rather dull strategy book. They offer a set of practical frameworks and models that lucidly explains what appears to be fairly obvious points, but are in reality profound insights and breakthrough contributions.

The Blue Ocean strategy is all about avoiding head-to-head competition. Because established markets in the developed world are saturated, head-to-head competition cannot bring attractive returns. At first read, it is so easy to understand and so intuitively obvious, that one is left wondering why everyone doesn’t adopt this approach. By the end of the book, you are left thinking if anyone is able to adopt this approach on a systematic basis. For to do so requires a broad set of multi-disciplinary skills as well as fresh thinking about even the most mundane and pedestrian options. It requires both discipline and inspiration.

1 comment:

Leveraging internet marketing, SEM and social media to build brands and engage customers said...

Nice review of the book. I have few questions in mind and was wondering if the book provides answers to these.

1) Does it mention any framework to beat the competition or make the competition irrelevant?

2) How different is it (the Blue Ocean Strategy) from dual strategy of low cost and differentiation?

3) How would one explain the concept of blue ocean to a layman?