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What is Blue Ocean Strategy? Description
Rather than competing within the confines of the existing industry or trying
to steal customers from rivals (Bloody or Red Ocean Strategy) W. Chan Kim
and Renée Mauborgne are suggesting Blue Ocean Strategy: developing
uncontested market space that makes the competition irrelevant.
According to Kim and Mauborgne in the HBR of October 2004, competing in
overcrowded industries is no way to sustain high performance. The real opportunity
is: to create blue oceans of uncontested market space.
Competitive Advantage critique
Of course competition is important. But by focusing on competition and
competitive advantage,
according to Kim and Mauborgne, scholars, companies, and consultants have
ignored two very important - and far more lucrative - aspects of strategy:
- To find and develop blue oceans, and
- To exploit and protect blue oceans. These challenges are very different
from those to which strategists have devoted most of their attention.
In blue oceans demand is created, rather than fought over. There is ample
opportunity for growth that is both profitable and rapid.
Two ways to create blue oceans
- One is to launch completely new industries, as eBay did with
online auctions.
- It is more common for a blue ocean to be created from within a red
ocean when a company expands the boundaries of an existing industry.
Certainly Kim and Mauborgne deserve credits for having made the point of
the over-focus on competitive advantage and also for their beautiful metaphor
of the two types of oceans.
Book: W. Chan Kim,
Renée Mauborgne - Blue Ocean Strategy -

Blue Ocean Strategy Special Interest Group

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Recent User Comments
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Aliuddin Faisal Faruqui - India
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Uncontested Industry or Uncontested Marketplace |
"If the size of a market is very large and there are still lots of options to go for then why should we go for a uncontested industry? Developing countries have lots of space in their current market for individuals to grow or must I say it is still uncontested market place?" |
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Daniel Ghanime - Lebanon
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A New Record Label... Like no Other |
"Being in the music business since 1991, as an owner of studio, I have the idea to start a new record label that doesn't look like any other in the country...
Knowing that the recorded music market is in continuous decline recording for free and promoting bands while doing cross selling...
Do you think it is a good idea?" |
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Atba Bouchaib - Morocco
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Blue Ocean Strategy and R&D Budget |
"Hello everybody, I can't imagine an entreprise carrying on blue ocean strategy without creating a strong, qualified and efficient R&D unit within its organisation.
Consequently, the budget assigned to the R&D activities should be important.
What do you think?" |
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Ebonee Wright - USA
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Steps in Developing a Blue Ocean Strategy |
"Buyer utility is the first step in the sequence of developing a blue ocean strategy. According to Kim & Mauborgne(2009) on their website blueoceanstrategy.com, when considering the first step a company should ask themselves, “is there a compelling reason for the mass of people to buy it”. If the recording industry can develop a medium for selling albums that is more convenient and less expensive than purchasing a CD, then the answer would be yes, there would be a reason for the mass of people to buy it." |
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Gleb Larionov - Russia
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Use All Factors |
"To create a Blue Ocean you must not only create or modify a quality product, you also have to pack it for getting information advantages and improve the value of the company's brand." |
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Best User Comments
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Sharad Donga - Netherlands
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Visionary Leadership and Blue Ocean Strategy |
"I think it merely depends on the leadership of the leaders, how visionary a leader is and how far business is seen. The process of achieving vision will generate and execute blue ocean strategy involuntary. I think it is all about being visionary and setting the vision changing the world." |
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Bekti Harsono - Indonesia
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Another use of BOS |
"Many people think BOS is only applicable for creating new markets, outside a company. Though, the Blue Ocean concept can also be applied while working inside companies. Discovering new/breakthrough in problem solving, effectively get the result will result in better business for the company. Why I say inside a company? Not every single one of us has a business mind / orientation / talent. Most of creative & genius people need someone else to sell & convert their ideas to become money. So, yes, we need to think out of the box, given we have searched in every single corner INSIDE our box." |
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Jalpa - India
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Blue Ocean Strategy |
"After creating new market/industry, how competitors can be restricted to imitate the same. Complete overlook of competition is possible ?" |
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Helen - Canada
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Strategy Canvas |
"Kim and Mauborgne introduce in their book an interesting tool they call "The Strategy Canvas". The Strategy Canvas is both a diagnostic and an action framework for building a Blue Ocean Strategy. In this diagram you plot on the vertical axis the value (low to high) that CUSTOMERS of the product give to it on certain EXISTING factors, which are listed on the horizontal axis. With a line connecting all scores you list each offering. Then you shift the focus to look for ALTERNATIVES for NONCUSTOMERS, introducing new factors for new customers. This can be achieved in 6 ways: by looking across alternative industries, by looking across strategic groups (pursuing a similar strategy), by looking across the chain of buyers, by looking across complementory product and service offerings, by looking across functional or emotional appeal to buyers, and even by looking across time." |
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Enrique - Colombia
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BOS: more of the same |
"Blue Ocean Strategy is just more of the same old stuff. It takes industry analysis from Porter, differentiation from Trout and the ancient concept of strategy from Sun Tzu. There is not anything new with this theory. It is just a nice catching title, merely good for selling books." |
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Sapto Rahardjo - Indonesia
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Blue Ocean Strategy |
"I think the success of blue ocean strategy depends on the person who is in charge as manager or CEO to run this strategy." |
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Helen - Canada
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Four Actions Framework |
"The second tool Kim and Mauborgne are describing is the "Four Actions Framework". This Four Actions Framework can be used to challenge the existing strategic logic and create new value curves by asking 4 questions: 1. Which of the factors that the industry takes for granted should be ELIMINATED? 2. Which factors should be REDUCED well below the industry's standard? 3. Which factors should be RAISED well above the industry's standard? 4. Which factors should be CREATED that the industry has never offered? The answers to these 4 questions can then be listed in a 2x2 matrix the authors call the Eliminate-Reduce-Raise-Create Grid." |
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Kashif Riaz - Pakistan
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Blue Ocean & Red Ocean |
"Blue ocean is a segmentation of the market into competitor less markets mostly these markets have better buying power (you can price what ever you want) and can help a startup company up the ladder... Nice Book" |
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Jose - India
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BOS |
"It is definitely an interesting insight and can prompt us to think out of the box. I am sure often one is too engrossed in red ocean fights and a novel way to explore blue oceans by leveraging ones core competence is a good strategy. An eg. could be the technology products always reinvent new blue oceans. Apple IPOD, Digitial camera, GPS phones are all blue oceans." |
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Katherine - USA
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Blue Ocean Strategy on Disney |
"For school, I have to devise a blue ocean strategy for a specific business and industry (and post it in a user group such as this one_- I also need your responses to work with, lol:)
I chose to use the amusement park industry, focusing on Disney. My strategy involves finding the commonalities of my non customers (the three tiers spoke of in the book). I am going to focus on those who may choose camping as an alternative activity-but have, on occasion, visited the park; those who may have considered Disney but opted not to come because they hate long lines, crowds, etc.; and those who don't even consider Disney because they don't think Disney has what they want (such as a camper--who thinks of going camping at Disney?).
I have to map out the stages of buyer experience and the utility levers at each stage, trying to find an area that needs improvement-because that is where one should find blue ocean. Any comments?" |
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K. Ravindran - India
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Blue Ocean within a Red Ocean |
"You can always find calm water spots (blue ocean) within the choppy water (red ocean). As the water is flowing constantly, so the the business environment too. There exists new market opportunities. Many such opportunities are unfulfilled. Marketers have to take note of this unmet demands by supplying new product solution. This way there is always a blue ocean within the red ocean" |
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Steve - USA
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Blue Ocean Strategy for Office Equipment (Xerox) |
"I decided to look at Xerox and the office equipment industry and see if I could get Xerox headed toward a blue ocean. Here is my 6 paths strategy for conceiving new market space:
Path 1: analyze alternative industries. There are many reasons why consumers choose another solution for their office equipment needs. They may go to an off-site printer instead of an in-house one. I would set up a consulting group that could help new printing businesses from start to finish
Path 2: look across strategic groups. Xerox needs to re-assess the strategic groups it competes with, and figure out where its technology and services can be applied where they are not currently.
Path 3: look across the chain of buyers. This is a challenge. Xerox is known as the Cadillac of office equipment, right along with the Cadillac price! They are also known for quality, however.
Path 4: look across complimentary product or service offerings. Holds lots of promise for xerox. The idea of a total office equipment solution from one provider holds lots of appeal. Xerox does this now, but I would simply expand it, and consultants able to provide this service.
Path 5: look across functional or emotional appeal to buyers. Xerox already follows this oath. They have a well recognized brand. Anyone who hears that name will know what they do. The need to market a little better to show the overall competitive cost of the life of their equipment.
Path 6: look across time. Xerox is strong along path six as well. They have a research division second to none in the industry. They should be able to leverage this to further differentiate themselves from their competition.
My work is cut out for me with Xerox. Thanks in advance for any comments." |
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Darshit Shah - India
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Main Challenges of Blue Ocean Strategy |
"What are the challenges of entering in an uncontested market and what strategies can be used to overcome them?" |
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Kellie Fuentes - USA
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Blue Ocean Strategy for SanDisk |
"For an assignment I have to create a BOS for SanDisk Sansa MP3 players. My plan is that Sansa can utilize already available technologies and create the first MP3 player that does not need a computer to download music. The player should be able to upload MP3's by itself by the press of a button and purchase on a Sansa website that it links to with a credit card already on file. It would not have to have full internet capabilities. They can raise their prices to match the production costs but lower costs also by eliminating the unnecessary radio function on their players. They need to pull out of the shadows of Apple's Ipod. Any comments greatly appreciated!" |
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Kelly - USA
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Blue Ocean Strategy AT&T |
"I have to create a blue ocean strategy for AT&T and the Alternative-fuel vehicle they plan to release in 2019. Is there buyer utility? The answer to that would be yes there is. With so many people becoming Eco friendly a vehicle that can do all the things AT&T is claiming it can do will definately be a hot item come 2019.
Is this vehicle going to be affordable to its buyers? The answer to that is more than likely no. In past studies these vehicles have shown to be pretty expensive, but if AT&T and CNG can create these vehicles with the least amount of cost to them by maybe using recycled parts which in turn would be even more environmentally friendly, they could kill 2 birds with one stone:
1) make these vehicles cheaper and eco friendly and
2) make them affordable to all people so that everyone can buy them, which is turn is better for the environment because now more people have eco friendly cars rather than gas hogs.
The biggest hurdle is making it affordable." |
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Michael A. Santon - USA
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Blue Ocean Strategy for Regal Entertainment |
"The Regal Entertainment must look for new ways to deliver the experience of movie going. A gimmick such as Day Care could accompany the movie experience and help to open a new demographic.
They would then need to look at different companies within their industry to determine the best ways that their competition is delivering the overall experience.
They should take a look at scheduling of movies offered. It would be possible for them to make a new system that is more accommodating to the consumer.
For a movie company to incorporate a complimentary service such as day care would be huge for the industry. Many industries are using day care to open the doors for a new demographic.
Regal could play on the day care service as a tool to show that they care about adults who can’t enjoy a night out because of their children.
It would be most important for Regal to see the transition from the past to the present and determine the direction that is leading to the future and beat other companies to that point." |
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Richard Hartshorn - USA
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Blue Ocean Strategy for Garmin (A Focus on 6 Paths) |
"6 paths strategy for conceiving new market space:
Path 1: analyze alternative industries - Garmin should look at designing a watch that is uncomplicated to use, has a minimal complement of buttons, and give it a sleeker look.
Path 2: look across strategic groups. Developing a watch that is customizable for different groups of common users including only the functionality customers typically want.
Path 3: look across the chain of buyers. I don’t see how this path would be beneficial to garmin. Any suggestions?
Path 4: look across complimentary product or service offerings. Does anyone have any ideas?
Path 5: look across functional or emotional appeal to buyers. To add emotional appeal, garmin could produce a fitness watch focused on fashion so customers can wear them to workout as well as to work.
Path 6: look across time. Garmin will definitely need to pace their actions with the latest developments in technology, like solar/kinetic power, to incorporate more value into their watches." |
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Asad Gul - Pakistan
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Blue Ocean Strategy in Existing Businesses? |
"How can one utilize BOS in an existing business like freight forwarding, where thousand of companies have been working; what possibly can be the competitive advantage?" |
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Sungani Mkandawire - Malawi
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Blue Ocean Strategy in Africa: Statutory Corporations |
"Can we say that statutory corporations mainly in Africa are operating in a blue ocean strategy since they operate in uncontested market and most of them like national water boards have natural barriers which will require huge investments if another company has to venture into this and also they are mostly protected by laws on their countries which makes competition irrelevant?" |
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James - USA
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Blue Ocean Strategy for AT&T |
"For a class paper, I have to develop a blue ocean strategy for an industry. The industry I chose was home telephone companies such as AT&T and Verizon. For many years they operated under a red ocean strategy; however, in the past few years, they have lost a substantial amount of home telephone customers to cable companies. I have to identify the three tiers of noncustomers as well as map out the stages of a buyer utility. If anyone has any input that would be beneficial, I would appreciate it." |
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