Blue Ocean Strategy (W. Chan Kim and Renee Mauborgne)

For whatever my opinion is worth, I recommend this book for Pinoy Entrepreneurs to read –Blue Ocean Strategy (W. Chan Kim and Renee Mauborgne, Harvard Business School Press [2005], 240 pages), with the subtitle: “How to Create Uncontested Market Space and Make the Competition Irrelevant”.

In this book, Kim and Mauborgne distinguishes between a red ocean and a blue ocean: “Red oceans represent all the industries in existence today. This is the known market space. Blue oceans denote all the industries not in existence today. This is the unknown market space.”

While the book clearly pushes for the creation of blue oceans, it does not say to forget about the red ocean because red oceans “will always matter and will always be a fact of business life.” However, because red oceans involve the same products and the same market space, the competition boils down to bloody price wars, among others. Stepping out of the red ocean and into the blue ocean takes a value innovation different from the existing competing businesses in the red ocean. Creating a blue ocean ahead of the rest means that there is yet no competition in that market space, until the rest imitates or catches up with the leader, in which case everyone will again be in the same read ocean of bloody competition. The trick, then, is to know when to maximize the blue ocean already created and when to create another blue ocean.

We could say that the concept itself is not really revolutionary, as you could argue that it’s just another way of saying that the successful manager should create niches. The beauty of the book is its clear and simple explanation of the concept, complete with illustrations and analysis. The book also discussed extensive frameworks and analaytics, brought about by years of study of the authors, for pursuing a blue ocean. These frameworks are helpful when the key personnel in a business sit down, discuss and WRITE the strategy, then actually implement it.

There’s so much to share about the contents of the  book, including the 6 principles that every company can use to “reconstruct maket boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome organizational hurdles, and build execution into strategy”. Unfortunately, to discuss more details would probably open us to a charge of infringement. All I’m saying is, take time to read the book.

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