True out of the box thinking really speaks to abandoning the
way we frame the challenges we face. In
fact, it’s critical to carefully choose the right frame, since frames affect
our understanding of possibilities and solutions.
Boiled down to its essence, Blue Ocean Strategy is all about
frames. The subtitle—"How to Create
Uncontested Market Space and Make the Competition Irrelevant"—speaks to the
power, simplicity and difficulty of reframing business challenges.
The authors have divided the market universe into two
categories: Red oceans and blue oceans. Red oceans represent “the known market space. Blue oceans represent all the industries not in existence
today,” or unknown market space. In red
oceans, everyone understands both the boundaries of their particular industry
and the rules of competition. The focus
is on increasing share of existing demand. As the market gets crowded, opportunities for growth are reduced,
products are commoditized and, as the authors note, “cutthroat competition
turns the red ocean bloody.”
Blue oceans represent untapped potential for growth and
demand creation. Most often, they’re
created by expanding current boundaries. One of the most well-known examples of blue ocean creation is Cirque du
Soleil. True, Ringling Bros. does good
business, but neither it nor others of its ilk pose any kind of real threat to
Cirque du Soleil because Cirque rewrote, and is playing by, a new set of rules.
The authors have spent considerable time developing a framework
for the formulation of blue ocean strategy, which they detail in the book. However, one of the most important aspects
they cover is the issue of execution. Specifically, they spend a significant amount of time discussing proven
methods for overcoming the organizational and cultural resistance that is
likely to appear once a new strategic direction has been formulated. As everyone knows, creating the right
environment for this kind of innovation is critical, and the best game-changing
idea isn’t worth much if it’s not flawlessly executed.
The hallmark of blue ocean strategy is that it forces
marketers to understand who/what their true competition is. For Cirque du Soleil, their competition was
theater, not other circuses. In the
early days of Southwest Airlines, their competition was not other airlines, but
the cost and ease of driving to the cities they served. For those who feel marketing is not getting
its due respect from senior management, digesting the work of Kim and Mauborgne
will, I think, free them to think beyond their day-to-day
responsibilities. At the very least, it
will help them see their business environment from a fresh perspective and
equip them to help management teams position their organizations for future
For those interested, a podcast with co-author W. Chan Kim is available here.