What is a Blue Ocean Strategy?
W Chan Kim and Renee Mauborgne authored the best selling “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant” in 2015. One of the most influential strategy books of all time it has now sold over 4 million copies worldwide.
What is red ocean strategy?
A blue ocean strategy is a business strategy that makes the competition irrelevant. Conversely, red oceans are the markets where business compete for market share. Blue oceans are where a business is unique and has created a new market where it has no competitors.
5 Steps to Implementing the Blue Ocean Strategy for Your Own Business
1. Delete the word “me-too” and replace it with “new and different”
It is important to differentiate your company from the crowd. Your product or service should be unique and offer a new perspective on current industry trends.
2. Create a strategy canvas
Consider the important dimensions of your product or service from your customers point of view. Then use this information to rate your company and your main competitors on each dimension. Doing this creates a value curve for each player. For example:
Image source: https://www.blueoceanstrategy.com/tools/strategy-canvas/
3. Think about how you can change your value curve
Blue Ocean Strategy proposes that you use the Four Actions Framework to analyse how you might differentiate your product or service. The Four Actions are:
- Raise – can any of your factors be raised well above the industry standard?
- Eliminate – have any features been standard for your industry for so long that they are no longer a useful point of difference?
- Reduce – which factors can be reduced well below the industry standard such as those which are common to the industry but are not considered important by the customer.
- Create – which features can you introduce that have never been offered before because This is where your blue ocean market exists.
4. Decide which of the actions to implement
The authors introduce the Six Paths Framework to help with this. A blue ocean strategy will generate ideas to make the competition irrelevant by:
- Looking across alternative industries
- Looking across strategic groups within industry
- Redefining the industry buyer group
- Looking at complementary product and service offerings
- Rethinking the functional-emotional orientation of its industry
- Shaping external trends over time
I can’t tell you much about launching at present because I need to read the follow up book Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth. However I can promise I’ll be reading this soon. I found Blue Ocean Strategy to be incredibly insightful and actionable and so I’m looking forward to finding out how the authors have expanded on their ideas and reporting back before too long. In the meantime you can read about an example of Blue Ocean Strategy in action in my post about volunteering with Qualcon2021.