Blue Ocean Strategy Disadvantages

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Blue Ocean Strategy > Best Practices > Blue Ocean Strategy Disadvantages

Blue Ocean Strategy Disadvantages
B. Sai sastha, Consultant, India, Member
While most of the participants in this forum are quick to point out the first mover advantage that a BOS creator gets, we need to be aware of the cost in case the strategy flops. Given today's global economic conditions and aversion of companies towards cost & risk, can BOS still be a valid business strategy?

Risk of Being in Business
Ceferino Dulay, Jr., Philippines, Member
Risk is always present in any business. The benefits one gets out of being "first mover" will really compensate the cost. Even a company that is not willing to take risk and stay in the red ocean is always at risk of being overwhelmed by competition. It's a matter of choice in the end. And of reducing the risk at every point and keeping your eyes wide open.

Blue Ocean Strategy Disadvantages: No Track Record
Yves Leduc, Consultant, Belgium, Member
I confirm risk is always present. In a "new" market, it may take longer time to convince your potential customers about the benefits of your product or service offer, even if it is obvious for all parties to go for a win-win. You have no "track record" yet as evidence of your ability to deliver.

Dealing with Blue Ocean Strategy Disadvantages
Dominique VOMSCHEID, Business Consultant, France, Member
To determine a strategy is always risky, but needed if you want to get out the competition; but specially for first movers, I recommend to read 'Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets' by Geoffrey A. Moore, in which you will find a clear definition and recepies to avoid the trap of new technology launches.

Blue Ocean Strategy - Chances and Risks
Thomas Czekala, Management Consultant, Switzerland, Member
Blue or red ocean strategies are like revolution and evolution: if you survive the revolution and take over the "market" you are a hero, but if you lose the revolution you are dead.
Really successful "systems" are able to take acceptable risks and efforts with concepts like Blue Ocean to "develop the future".
But long-term success is always hard work on daily improvement and "secure the base". This is evolution and very often digging in red ocean activities. It's not black and white, it's grey.

BOS is not for Everyone
HARWINDAR SINGH, Business Consultant, Malaysia, Member
What I have observed is that companies which are in industries with growth potential, dynamic technologies and are more impacted by externalities are the ones that would stand to gain most from BOS initiatives.
Creating value innovation for cash cow type of businesses is tough and revolutionary to the point of being unduly risky sometimes. Having said that, companies that are willing to go through the process required by BOS will almost invariably improve many parts of their operations, whether they create a Blue Ocean or not.
BOS initiatives must be on-going, not one-off - that's the secret to success I believe!

Protection Against BOS Disadvantages
KATHRYN STEINER, MBA, Entrepreneur, United States, Member
The only way to compete in a global economy is through differentiation and low cost. There are restrictions and rules that need to be regarded, and some say possibly modified, that inhibit differentiation and low cost in a particular country. Intels "portfolio of patents" which they "vigorously protect," is one example of how a company ensures their strength through innovation, within the BOS strategy. See Intel Corporation Innovation Vice President Peter Cleveland on C-Span.

BOS is All About Managing First Mover Risk
Andrew Nelson, CEO, Australia, SIG Leader
I think you have a valid point that many BOS writers don't use the language of the risks of first mover advantage, but to be fair this is because every step in the process is about managing the risks associated with strategy formulation, validation and execution in a new market.
Remember that much of what the professors have drawn together in BOS is not "new" but what they have done is give us a robust end to end model for the systematic identification and development of first mover strategy.

Discovery Driven Planning
Pasquini, ICT Consultant, Italy, Member
I read 'Discovery-Driven Growth' written by Rita Gunther McGrath and Ian C. Macmillan.
That could be a good way to manage/reduce risk about new initiative.

Red and Blue Ocean Risk Must Be Understood and Minimized
KATHRYN STEINER, MBA, Entrepreneur, United States, Member
Today I heard that the importance is understanding the trends that are emerging. That will yield successful results and progress. Essentially BOS, versus riding a current wave and developing and introducing products within the red ocean.

Going BO Doesn't Mean You Throw Away your Existing Products
Nedyalko Terziev, Student (MBA), Singapore, Member
I was present at a recent lecture by Dr. Kim and one of the things he emphasized is that every company needs a portfolio of RO and BO strategies. BO moves are inherently riskier than RO ones, but even with RO you run with the risk of disruptive innovation happening, proving your products obsolete.
Thus, Dr. Kim argued, to minimize the risk for the enterprise you need a mix of both types of strategies- the lower riskiness of RO strategies and the high potential of BO ones.

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