Blue Ocean Strategy

Blue Ocean Strategy written by W. Chan Kim and Renee Mauborgne (both Professors of INSEAD) is a fascinating book of just over 200 pages. I first heard of this book from my colleague Frank Brown who was the global leader of PwC's Advisory practice. Frank quit PricewaterhouseCoopers to join INSEAD as its Dean. I guess he is executing a blue ocean strategy there .

Blue Ocean is an interesting use of imagery to depict a strategy of creating uncontested market space and to make the competition irrelevant. As products and services increasingly become undifferentiated commodities, the market is overcrowded. Players compete head-on and the end result is a bloody “red ocean” of rivals competing for a finite market and a shrinking profit pool.

The well researched advice of the authors is to stay away from red oceans and instead create pristine blue ones of uncharted waters by doing what the authors call “value innovation”.Smart players create blue oceans by powerful leaps in value for both the firm and the customers.

The authors have tracked and analysed a large number of case studies. Cirque du Soleil ,for instance, reinvented circus by powerfully combining elements of circus, ballet and broadway to create a blue ocean of live entertainment achieving a powerful value proposition with a lower cost structure.

The book has analysed familiar success stories like Southwest Airlines, Casella Wines, Pret A Manger, Body Shop, Multiplex Movie Theaters, Canon and also unfamiliar case studies like the New York Police Department (NYPD) to drive the point home that this book is all about a bold new way of thinking to grasp the future. It is a strategy akin to what Sun Tzu preached ,"The best strategy in war is to win without having to fight.”

Notes: Published by Harvard Business School Press