Do you believe in Blue Ocean Strategy?


2

Blue Ocean Strategy is a business methodology that says: instead of competing in a market with existing competitors (red oceans), why not create your own market (blue ocean) and dominate it?

Here is a summary in slide form of the book's gist. http://www.slideshare.net/jessestarmer/blue-ocean-strategy-summary-61974 There are pros and cons to each. Here is a brief list for you to chew on.

  • Red oceans are red oceans because there is measurable consumer interest (the market is validated). This is the first risk of adopting blue oceans: your customer base literally ranges from 0 to billions.
  • Red oceans make it difficult for customers part of a red ocean market to switch between vendors (customer poaching). Blue oceans obviously don't have this problem.
  • Red oceans represent an already-developed market. To develop a blue ocean market, it not only requires hard work and relentless validation of the market, but also years of doing so until the market is seen as one. Unless, of course, you are Apple, Google, Microsoft, or some other juggernaut that has influence over a consumer audience.
Blue Ocean Strategy is one of the most popular business books, and although it includes a good amount of research and case studies approving the strategy, I want to hear what you think about it.

Strategy Business

asked May 13 '10 at 03:44
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Mark Bao
604 points

4 Answers


8

It is a nice book to read, but I always have a problem with these kinds of books (there are a lot of them). It analyzes success stories and based on this analysis a set of rules are formed. The message is then to follow these rules and you automatically end up with a great business. Unfortunately, this is not true.

Other examples include:

  • Copying the Toyota Production System in any type of process
  • Have an enemy (because Apple and Google had one too)
  • Some will tell you not to finish high school, because they didn't and they are successful
  • The Long Tail, i.e. create a niche market where bigger companies can't go to because it is not profitable

And some others. These examples worked for them, not for everybody.

answered May 18 '10 at 00:04
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Jeroen
121 points
  • Granted, too many people take these claims as gospel, but it can be helpful to learn from other's mistakes. The key is to apply them to your situation and make adjustments along the way. Successful companies have done that; the difference is you may not have the same set of circumstances. – Jeff O 9 years ago

5

I'd say it is much more useful to concentrate on providing a product which is extremely useful for customers. They will buy it then, no matter whether it's in the "red" or "blue" ocean.

answered May 13 '10 at 06:09
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Philobus
116 points

4

If you have a product that has no competitors then you need to ask why no one else has been in that space.

You may have such a unique idea, such as when Tesla tried to build a tower that would have enabled pagers, that you will have a hard time convincing people that they need this product.

You may be better off going with an incremental approach.

Look at where you want to end up, then look at how you can improve on what people are using, and slowly, through upgrades, move them toward your ideal.

For example, look at Apple. If they had come out with the Ipad 4 years ago it would have failed, much as tablets have in the past, but, through the iphone they created a marketplace for applications, then released a larger screen for a successful product, and continue to push people into a new area.

So, I would suggest you look at the blue oceans, and see how you can slowly move people from a red ocean to swim in a new ocean, with nicer beaches, better weather and no hurricanes. :)

answered May 13 '10 at 07:40
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James Black
2,642 points

0

There was a good post recently on SvN that addressed some big problems with the blue ocean approach. The blue ocean practically requires a "swing for the fences" approach. It necessitates high risk taking, deep pockets and long commitments. While it can be done and the rewards can be great, the risks may overtake the rewards.

answered Apr 20 '11 at 02:05
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Kenneth Vogt
2,917 points

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