IN MY previous post, I talked about having your own market—a blue ocean strategy.
Now if you went to business school and are wondering if you were absent the day it was taught, know that the blue ocean strategy is a fairly recent marketing term—it was first used in Harvard Business Review in 2004. In 2005, authors W. Chan Kim and Renee Mauborgne released the book Blue Ocean Strategy which became a best seller.
In a nutshell, blue ocean strategy says: Don’t compete with rivals. Make them irrelevant. To do this, one must leave the highly competitive overcrowded industries—the “bloody” red ocean—where companies compete head-on for a shrinking profit pool. A corporation will do well to create an uncontested market space ripe for growth—the vast blue ocean.
In a press kit posted online at the Blue Ocean Strategy website, Kim and Mauborgne explain this further:
Kim and Mauborgne studied 150 blue ocean creations in over 100 years in more than 30 industries. This proves that the blue ocean strategy has been in place for years, and only the term is new.
There are four actions in the framework:
1. Reduce factors well below the industry’s standard.
2. Eliminate factors that the industry takes for granted.
3. Raise factors well above the industry’s standard.
4. Create factors that the industry has never offered.
The authors cite Cirque de Soleil as one example of a blue ocean strategy. It is a circus act, but rather than do what every other circus does—monkeys unicycling, lions jumping into a ring of fire, star performers being shot to the air by cannon, etc.—Cirque de Soleil distinguished itself by combining opera and ballet.
Locally, two businesses come to my mind applying the blue ocean strategy. There’s Cerealicious, a cereal bar. When the owners were thinking of going into business, they saw how crowded the burger, pizza and coffee businesses are. So they boldly introduced a product that has never been familiar to Filipinos—cereal smoothies and drinks. And they succeeded at creating demand for Cerealicious’ products.
Another business is Tan Gan by designer Lulu Tan-Gan. While other ready-to-wear clothes shops in malls focus on offering everyday clothes and glam party dresses, Tan-Gan decided to focus on knitwear. With her shop, people have realized that knitwear does not just mean sweater. One can have business suits, party clothes, and weekend wear in knits.
Are you racking your brains plotting how to beat the competition? Set your sights on the vast blue ocean in the horizon and form your blue ocean strategy.
Now if you went to business school and are wondering if you were absent the day it was taught, know that the blue ocean strategy is a fairly recent marketing term—it was first used in Harvard Business Review in 2004. In 2005, authors W. Chan Kim and Renee Mauborgne released the book Blue Ocean Strategy which became a best seller.
In a nutshell, blue ocean strategy says: Don’t compete with rivals. Make them irrelevant. To do this, one must leave the highly competitive overcrowded industries—the “bloody” red ocean—where companies compete head-on for a shrinking profit pool. A corporation will do well to create an uncontested market space ripe for growth—the vast blue ocean.
In a press kit posted online at the Blue Ocean Strategy website, Kim and Mauborgne explain this further:
“To sustain themselves in the marketplace, red ocean strategists focus on building advantages over the competition, usually by assessing what competitors do and striving to do it better. Here, grabbing a bigger share of a finite market is seen as a zero-sum game in which one company’s gain is achieved at another company’s loss. They focus on dividing up the red ocean, where growth is increasingly limited. Such strategic thinking leads firms to divide industries into attractive and unattractive ones and to decide accordingly whether or not to enter. “Blue ocean strategists recognize that market boundaries exist only in managers’ minds, and they do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. The crux of the problem is how to create it. This, in turn, requires a shift of attention from supply to demand, from a focus on competing to a focus on creating innovative value to unlock new demand. This is achieved via the simultaneous pursuit of differentiation and low-cost.”
Kim and Mauborgne studied 150 blue ocean creations in over 100 years in more than 30 industries. This proves that the blue ocean strategy has been in place for years, and only the term is new.
There are four actions in the framework:
1. Reduce factors well below the industry’s standard.
2. Eliminate factors that the industry takes for granted.
3. Raise factors well above the industry’s standard.
4. Create factors that the industry has never offered.
The authors cite Cirque de Soleil as one example of a blue ocean strategy. It is a circus act, but rather than do what every other circus does—monkeys unicycling, lions jumping into a ring of fire, star performers being shot to the air by cannon, etc.—Cirque de Soleil distinguished itself by combining opera and ballet.
Locally, two businesses come to my mind applying the blue ocean strategy. There’s Cerealicious, a cereal bar. When the owners were thinking of going into business, they saw how crowded the burger, pizza and coffee businesses are. So they boldly introduced a product that has never been familiar to Filipinos—cereal smoothies and drinks. And they succeeded at creating demand for Cerealicious’ products.
Another business is Tan Gan by designer Lulu Tan-Gan. While other ready-to-wear clothes shops in malls focus on offering everyday clothes and glam party dresses, Tan-Gan decided to focus on knitwear. With her shop, people have realized that knitwear does not just mean sweater. One can have business suits, party clothes, and weekend wear in knits.
Are you racking your brains plotting how to beat the competition? Set your sights on the vast blue ocean in the horizon and form your blue ocean strategy.
good article. thanks!
Great post/topic for a blog. Though in-and-of-itself the concept is simply a fancy regurgitation (to be blunt)..or a refreshing and brilliantly simple (to be cordial) angle on "innovation".
Most misconstrue innovation as something born in a research lab sprouting totally new technology or intellectual property that provides an elegant solution to something previously unresolved. In my opinion, innovation is anything that introduces something that destroys status quo that serves its purpose uniquely enough to create new demand.
Blue Ocean is innovation only juxtaposed almost exclussively in a backdrop of a mature industry..I guess to highten the sense of a dramatic impact..(a brilliant marketing ploy I think).
Enough opining about the subtle differences....recognizing that you have to be innovative isn't hard....the core issue remains...how do you recognize a truly innovative and provocative idea?
It's too bad no one seems to think this is important/intriguing enough a blog to participate in...not surprised seeing what blogs are most popular in Inq...sad..I guess the populus isn't there yet. Thanks! for the post.
Kabayan and Ryan, thank you for your comments. Open for Business may not be as popular as the showbiz blogs, but we'll still keep on writing. :-)
Great thoughts, Kabayan!
Searching for this for some time now - i guess luck is more advanced than search engines :)
This is great! Thank you so much for such a great topic.
united regions states incognito code cosmic seeding [url=http://www.teachertube.com]program details[/url] http://www.allvoices.com
globally service during australia
Submit Links to Social Bookmarking Websites Automatically! Get Thousands of Visitors! Increase Website Traffic and Income with Automatic Social Bookmarks Submitter. Prepare to upgrade your servers today – you will have thousands of real and highly targeted visitors who will make you the money like crazy!
The blue Ocean strategy published in 2005 by Kim and Mauborgne and the book illustrates on uncontested market space so its not about the oceans but about growth and profits which can be generated by using the uncontested space. The authors Kim and Mauborgne lays more emphasis on how to sustain high performance by creating growth and profit opportunities and by trying to create the blue oceans. The book can be very useful not only for business management students but also for any layman as well who plans on venturing into the business world.
Dallas tx mortgage
just what i waz looking 4!!
collar stiffeners
Thanks for sharing such an interesting article. Blue Ocean Strategy is the well-known book. Dog bark collar citronella bark collar
thanks for useful information!
Best regards, Alex, CEO of youtube download
Kim and Mauborgne studied 150 blue ocean creations in over 100 years in more than 30 industries.
Best regards, Katya, CEO of game burning software, 2008 r2 iscsi target
Very interesting article. Content has been written in very nice manner. I enjoy reading this kind of stuff. Thanks for sharing good knowledge.
Suicide Poems
just for what i have been looking for!
u will luv it!
must watch the followings!
mens silver bracelets
just for what i have been looking for!
u will luv it!
must watch the followings!
online recruitment software
Wow, I'm yet to read the book but it looks greatly promising... I must get my hand on a copy. Husky Breeders
A little long, but a very interesting read. casual summer dresses
The post is written in very a good manner and it entails many useful information for me. I am happy to find your distinguished way of writing the post. Now you make it easy for me to understand and implement the concept. Thank you for the post.
nautical home decor
Thanks for sharing about The blue ocean strategy.
Great post.
| How To Make Cheese |
| How To Make A Website |
Blue Ocean is innovation only juxtaposed almost exclussively in a backdrop of a mature industry..I guess to highten the sense of a dramatic impact..(a brilliant marketing ploy I think). roller mill for sale
I like every post in this blog. Really a nice work has done. I appreciate the blog owner.
sending flowers Australia
Your blog is really excellentdeliver flowers to india
Thanks a lot for enjoying this beauty article with me. I am appreciating it very much! Looking forward to another great article. Good luck to the author! all the best!
Loan Modification Attorneys
Is the book available in the UK? I can buy it from Amazon.com but shipping is too expensive. Could prove helpful in giving my website the edge over other wine merchants.