Book Review: Blue Ocean Strategy

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Fall 2017
A Book Review:

Blue Ocean Strategy

Blue Ocean Strategy is a book for business strategies published by Harvard Business

School Publishing Corporation in the year 2005. It was written by Rene Mauborgne and W.

Chan Kim who are associated with The Blue Ocean Strategy Institute, cofounders of Value

Innovation Institute as well as professors at Frances INSEAD business school.

Introduction

Blue Ocean Strategy is a book for business strategies published by Harvard Business

School Publishing Corporation in the year 2005. This book explains the difference between

competition and no competition in the business. They are compared with Red Ocean and Blue

Ocean. When companies engage in the head on race, only bloodshed Red Ocean will be created

which means an increase in competitors and rivalry. If the companies leave the competition

and do business going some space for others, a huge space will be created and a blue ocean is

created, where new opportunities occur.

Though this is well received, there are some contradictions to this as it is not practical.

Proper research is not conducted, and sources of success are not there. So it is more descriptive

and difficult to follow.

The book also exemplifies what the authors consider is the best organizational strategies

to produce profits and growth in the organization. Blue ocean strategy recommends a business

to succeed they ought to make new demands in an open space of market, or a "Blue Ocean,"

instead of competing head-to-head with different suppliers in a current industry.

The authors highlight the relationship of success stories crosswise over industries and

the strategies formulation that give a strong base to achieve exceptional success the strategy

named as "Blue Ocean Strategy." The blue ocean strategy attempts to adjust innovation to

utility, cost and price position, unlike the red ocean strategy which is the traditional way to deal

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with businesses of beating competitions came from the military organizations. The book

despises at the wonders of traditional choices between lower cost and service or product

differentiation but instead recommends that both lower costs and differentiation are possible at

the same time.

Moreover, this book scrutinizes the experience of different organizations in areas, for

example, retailers, airlines, coffee makers, textiles, automobiles, computers, cement, wine,

watches, and the circus, to response the questions and build upon the arguments about value

innovation being the foundation of the blue ocean strategy.

The authors also emphasize that value innovation is fundamentally the innovations

alignment with utility, cost and price position. Therefore, it makes competition irrelevant by

creating uncontested market space. Rather than focusing on 'beating the competition' strategy,

managers should focus on finding a new market blue ocean then take steps to exploit and

protect it. It helps businesses/new businesses in the way that they create huge value for both

the customers and the company both.

Brief Summary

The book has three divisions: The initial part presents the important ideas of blue ocean

strategy includes value innovation. The second part explains the four formulation principles of

the blue ocean strategy, for example, how to make uncontested marketplace by recreating

market limits, focused on a big painting, reaching outside the existing demands and following

the strategic succession right.

The book utilizes many cases crosswise over industries to exhibit how to break the

conventional competitive strategic thoughts and to develop profits and demands for the

organization and the business by employing blue ocean strategic theory.

The third and last part depicts two key execution principles of the blue ocean strategy

includes fair process and tipping point leadership. The execution principles discussed in the

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book are fundamental for pioneers to beat the four crucial organizational obstacles that can

inhibit even the best strategy from being implemented.

Critical Assessment

According to my extensive analysis, blue ocean strategy states that companies can

create their own niches by pushing the boundaries of existing industries or by creating new

areas of business altogether. It would enable to grow rapidly in the blue ocean that they have

created for themselves as opposed to making the ocean red, by getting into a head-to-head

competition with their rivals which would make the competition bloody and as a consequence

the ocean, red.

It is about market creation rather than competing in the market. The strategy aims to

capture new demand by making competition irrelevant. As these newly created markets deliver

significantly higher profit margins than existing market spaces, it makes sense for companies

to implement a blue ocean strategy rather than bleed in an existing space.

Blue ocean strategy values the time of anybody trying to build their success through

innovation. The writers of this book construct their point in light of an analysis of 150 strategies

from 30 businesses straddling the last hundred years. Their exploration reveals that competition

in the saturated marketplace, named "red oceans," isn't a compelling means of success. Rather,

significant success is driven by creating new markets, innovation, and recognizing neglected

needs with growth potential. These regions are alluded to as "blue oceans."

We all know this world is a callous place. Fortunately, it is as yet huge, and

opportunities are pending. The authors Mauborgne and Kim recommend that if you discover

yourself in a red ocean marketplaces, the most secure alternative might make another

marketplace to swim in a blue ocean.

To Mauborgne and Kim, blue ocean space exemplifies the territories of marketing that

still can't seem to be found. They are regions that emphasis on "value innovation" which will

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allow running new demands. The organizations that embrace this approach offer customers

new motivations to purchase, avoid pricing wars and appreciate increased sales.

Conclusion

Business establishment engages in direct competition with other opponents in search of

profitable and sustained growth, competitive advantage and to define its market share. Others,

however, find its way right into the top by breaking the rule and creating their own market

though tapping uncontested one. The authors reiterated that the way to making your own blue

ocean is to focus on innovation and value and not on beating the competition in ridiculous price

wars. In this manner, significant achievement is driven by creating new markets, innovation,

and recognizing neglected needs with growth potential.

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References

Blue Ocean Strategy. (2015). 4 Actions Framework. Retrieved from Blue Ocean Strategy:
http://www.blueoceanstrategy.com/tools/4-actions-framework/

Blue Ocean Strategy. (2015). Strategy Canvas. Retrieved from Blue Ocean Strategy:
http://www.blueoceanstrategy.com/tools/strategy-canvas/

Blue Ocean Strategy. (2015). Value Innovation. Retrieved from Blue Ocean Strategy:
http://www.blueoceanstrategy.com/tools/value-innovation/

Kim, C. W., & Mauborgne, R. (2005). Value Innovation: a Leap into the Blue Ocean.
Journal of Business Strategy, 24(4), 22-28.

Kim, W. C., & Mauborgne, R. (2004, October). Blue Ocean Strategy. Harvard Business
Review.

Kim, W. C., & Mauborgne, R. (2004). Value Innovation: The Strategic Logic of High
Growth. Harvard Business Review.

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested
market space and make the competition irrelevant. Boston: Harvard Business School
Press.