Blue Ocean Strategy Concepts

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant

by W. Chan Kim and Renée A. Mauborgne · 20 Jan 2014 · 287pp · 80,180 words

more meaningful Contents Copyright Help! My Ocean Is Turning Red Preface to the Original Edition Acknowledgments Part One: Blue Ocean Strategy 1 Creating Blue Oceans 2 Analytical Tools and Frameworks Part Two: Formulating Blue Ocean Strategy 3 Reconstruct Market Boundaries 4 Focus on the Big Picture, Not the Numbers 5 Reach Beyond Existing Demand 6

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In this new preface, we first outline what’s new here. We then briefly summarize the key points that define and distinguish blue ocean strategy and address why we believe blue ocean strategy is more needed and relevant than ever before. What’s New in This Expanded Edition? This edition adds two new chapters and

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what has historically been an unstructured problem in strategy, informing organizations’ ability to create blue oceans systematically. Execution can be built into strategy formulation. Blue ocean strategy is a strategy that joins analytics with the human dimension of organizations. It recognizes and pays respect to the importance of aligning people’s minds

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the last two decades. It helps managers in action as they formulate strategies that are innovative and wealth creating. Why Is Blue Ocean Strategy of Rising Importance? When we first published Blue Ocean Strategy in 2005, there were many forces driving the importance of creating blue oceans. At the top of the list was the

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of bloody competition by creating uncontested market space that makes the competition irrelevant. Instead of dividing up existing—and often shrinking—demand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition. This book not only challenges companies but also shows them how to achieve this.

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the Beaucourt Foundation for its generous financial support of our research. Among many public and nonprofit initiatives for putting our ideas into practice, the Malaysia Blue Ocean Strategy Institute (MBOSI) and President Obama’s White House Initiative on Historically Black Colleges and Universities have provided new impetus for us to apply and

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research support. Finally, warm thanks to our IBOSI supporting staff, Mélanie Pipino and Marie-Françoise Piquerez, for their ongoing assistance and commitment. PART ONE Blue Ocean Strategy CHAPTER 1 Creating Blue Oceans A ONETIME ACCORDION PLAYER, stilt walker, and fire eater, Guy Laliberté is now CEO of Cirque du Soleil, one of

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last ten years since the first edition of our book was published, we have continued to observe similar patterns. Value Innovation: The Cornerstone of Blue Ocean Strategy What consistently separated winners from losers in creating blue oceans was their approach to strategy. The companies caught in the red ocean followed a conventional

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used to theater prices. Figure 1-2 depicts the differentiation– low cost dynamics underpinning value innovation. FIGURE 1-2 * * * Value innovation: The cornerstone of blue ocean strategy Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proposition to buyers. Cost

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approach, innovation will remain divided from the core of strategy.24 Figure 1-3 outlines the key defining features of red and blue ocean strategies. FIGURE 1-3 * * * Red ocean versus blue ocean strategy * * * Competition-based red ocean strategy assumes that an industry’s structural conditions are given and that firms are forced to compete

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The issue is how to succeed in blue oceans. How can companies systematically maximize the opportunities while simultaneously minimizing the risks of formulating and executing blue ocean strategy? If you lack an understanding of the opportunity-maximizing and risk-minimizing principles driving the creation and capture of blue oceans, the odds will

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Such a strategy follows the sequence of utility, price, cost, and adoption. Chapters 7 through 10 turn to the principles that drive effective execution of blue ocean strategy. Specifically, chapter 7 introduces what we call tipping point leadership. Tipping point leadership shows managers how to mobilize an organization to overcome the key organizational

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hurdles that block the implementation of a blue ocean strategy. It deals with organizational risk. It lays out how leaders and managers alike can surmount the cognitive, resource, motivational, and political hurdles in spite

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the status quo, this chapter shows how fair process facilitates both strategy making and execution by mobilizing people for the voluntary cooperation needed to execute blue ocean strategy. It deals with management risk associated with people’s attitudes and behaviors. People here include both internal and external stakeholders who work for and

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In the next chapter we discuss the opportunity-maximizing and risk-minimizing paths to creating blue oceans. PART TWO Formulating Blue Ocean Strategy CHAPTER 3 Reconstruct Market Boundaries THE FIRST PRINCIPLE of blue ocean strategy is to reconstruct market boundaries to break from the competition and create blue oceans. This principle addresses the search risk

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. The foreign exchange industry had never offered these services before. Figure 4-5 summarizes EFS’s four actions to create value innovation, the cornerstone of blue ocean strategy. FIGURE 4-5 * * * Eliminate-reduce-raise-create grid: The case of EFS * * * The new value curve exhibited the criteria of a successful strategy. It

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addresses the profit side of the business model, the company is ready to advance to the final step in the sequence of blue ocean strategy. FIGURE 6-6 * * * The profit model of blue ocean strategy * * * A business model built in the sequence of exceptional utility, strategic pricing, and target costing produces value innovation. Unlike the

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a fuller discussion of how companies can engage internal and external stakeholders, see chapter 8.) The Blue Ocean Idea Index Although companies should build their blue ocean strategy in the sequence of utility, price, cost, and adoption, these criteria form an integral whole to ensure commercial success. The blue ocean idea (BOI

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the four, knowing how to triumph over them is key to attenuating organizational risk. This brings us to the fifth principle of blue ocean strategy: overcome key organizational hurdles to make blue ocean strategy happen in action. To achieve this effectively, however, companies must abandon perceived wisdom on effecting change. Conventional wisdom asserts that the

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follow conventional wisdom. Not every challenge requires a proportionate action. Focus on acts of disproportionate influence. This is a critical leadership component for making blue ocean strategy happen. The next chapter drills down one level further. It addresses the challenge of mobilizing people’s minds and hearts for the new strategy by

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either differentiation or low cost within given industry conditions. Here, differentiation and low cost represent alternative strategic positions in an industry. In contrast, under blue ocean strategy, an organization achieves high performance when all three strategy propositions pursue both differentiation and low cost. It is this alignment in support of differentiation and

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low cost that ensures a successful blue ocean strategy that has sustainability. (See figure 9-1). While one or two strategy propositions can be imitated, imitating all three is difficult, especially the people

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FIGURE 9-1 * * * Achieving strategy alignment * * * Achieving Blue Ocean Strategic Alignment To understand how an organization achieves alignment to produce a high-performing and sustainable blue ocean strategy, let’s look at Comic Relief, a UK fund-raising charity. Founded in 1985, Comic Relief leapfrogged existing UK fund-raising charities and emerged as

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the creation of blue oceans is not a one-off occurrence but is institutionalized as a repeatable process in an organization. Barriers to Imitation A blue ocean strategy brings with it considerable barriers to imitation that effectively prolong sustainability. They range from alignment to cognitive, organizational, brand, economic, and legal barriers. More

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often than not, a blue ocean strategy will go without credible challenges for many years. Cirque du Soleil’s blue ocean endured over twenty years; Comic Relief’s, nearly thirty years; Apple

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changes that the politics of few companies can bear in the short term. The brand barrier. Brand image conflict prevents companies from imitating a blue ocean strategy. The blue ocean strategy of The Body Shop, for example—which shunned beautiful models, promises of eternal beauty and youth, and expensive packaging—left major cosmetic houses the

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The huge economies of scale in purchasing enjoyed by Walmart, for example, have significantly discouraged other companies from imitating its blue ocean strategy. Network externalities also block companies from easily and credibly imitating a blue ocean strategy, much as Twitter has enjoyed in social media. In short, the more users a site has online, the more

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not face credible challenges for many years, while the speed of imitation varies across industries. FIGURE 10-1 * * * Imitation barriers to blue ocean strategy * * * Renewal Eventually, however, almost every blue ocean strategy will be imitated. As imitators try to grab a share of the blue ocean an organization created, it typically launches offenses to defend

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A blue ocean strategist gains insights about reconstructing market boundaries not by looking at existing customers, but by exploring noncustomers. When organizations mistakenly assume that blue ocean strategy is about being customer led, they reflexively focus on what they’ve always focused on: existing customers and how to make them happier. While such

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up a blue ocean of commercial opportunity. Value innovation, not technology innovation, is what opens up commercially compelling new markets. When companies mistakenly assume blue ocean strategy hinges on new technologies, their organizations tend to push for products or services that are either too out there, too complicated, or lacking the complementary

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even more important is linking innovation to value. No company should rest easy until it achieves value innovation. Red Ocean Trap Five: The misconception that blue ocean strategy and differentiation strategy are synonymous. Under traditional competitive strategy, differentiation is achieved by providing premium value at a higher cost to the company and at

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needed to stand apart and set sail into the blue ocean. Red Ocean Trap Seven: The belief that blue ocean strategy is the same as innovation. Blue ocean strategy is not synonymous with innovation per se. Unlike blue ocean strategy, innovation is a very broad concept that is based on an original and useful idea regardless of whether

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, many technology innovators fail to create and capture blue oceans by confusing innovation with value innovation, the cornerstone of blue ocean strategy. Value innovation, not innovation per se, is the singular focus of blue ocean strategy. Simply creating something original and useful through innovation is not enough to create and capture a blue ocean, even

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value proposition is supported by key internal and external people involved in its execution and is complemented by a strong profit proposition. Hence, to equate blue ocean strategy with a theory of marketing myopically masks the holistic approach needed to create a sustainable high-performance strategy, including overcoming organizational hurdles, winning people’

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with Schumpeter’s concept of creative destruction, whereby the old is incessantly destroyed or replaced by the new. Unlike disruption, however, blue ocean strategy does not necessitate displacement or destruction. Blue ocean strategy is a broader concept that goes beyond creative destruction to embrace nondestructive creation, which is its overriding emphasis. Take Viagra, which created

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by displacing an earlier technology or existing product or service? No. It created a blue ocean via nondestructive creation. By reconstructing existing market boundaries, blue ocean strategy creates new market space within and beyond existing industries. When new market space is created beyond existing industry boundaries, as with Viagra, reconstruction tends to

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is created within an existing industry, like disruptive innovation, displacement tends to occur. However, in many cases, even when the reconstruction occurs within industries, blue ocean strategy also produces nondestructive creation. Nintendo’s Wii, for example, created a blue ocean in the video game industry. It had an element of creative destruction

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or lower-cost solution to the existing problem of an industry, both of which trigger disruption and displacement of existing products and services. Instead, blue ocean strategy is about redefining the problem itself, which tends to create new demand or an offering that often complements rather than displaces existing products and services

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Future.” Harvard Business Review 80, June, 76–85. ———. 2003. “Tipping Point Leadership.” Harvard Business Review 81, April, 60–69. ———. 2004. “Blue Ocean Strategy.” Harvard Business Review 82, October, 75–84. ———. 2005. “Blue Ocean Strategy: From Theory to Practice.” California Management Review 47, March, 105–121. ———. 2009. “How Strategy Shapes Structure.” Harvard Business Review 87, September

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Core: Expand Your Market Without Abandoning Your Roots. Boston: Harvard Business School Press. About the Authors W. Chan Kim is codirector of the INSEAD Blue Ocean Strategy Institute and The Boston Consulting Group Bruce D. Henderson Chair Professor of Strategy and International Management at INSEAD, France (the world’s second-largest business

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in 2014, “Best Overall Case” in 2009 across all disciplines, and “Best Case in Strategy” in 2008. Kim cofounded the Blue Ocean Strategy Network (BOSN), a global community of practice on the Blue Ocean Strategy family of concepts that he and Renée Mauborgne created. BOSN embraces academics, consultants, executives, and government officers. Renée Mauborgne is the

The Wide Lens: What Successful Innovators See That Others Miss

by Ron Adner · 1 Mar 2012 · 265pp · 70,788 words

The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997); W. Chan Kim and Renée Mauborgne’s Blue Ocean Strategy (Boston: Harvard Business School Press, 2004); Geoffrey Moore’s Crossing the Chasm (New York: HarperBusiness, 1991); George Day’s Market Driven Strategy: Processes for Creating

Inner Entrepreneur: A Proven Path to Profit and Peace

by Grant Sabatier · 10 Mar 2025 · 442pp · 126,902 words

with me makes life so beautiful. Appendix: Further Reading These are some books that have changed my life or greatly influenced my entrepreneur journey. Entrepreneurship Blue Ocean Strategy—W. Chan Kim and Renée Mauborgne The 4-Hour Workweek—Tim Ferriss Traction—Gino Wickman 12 Months to $1 Million—Ryan Daniel Moran The Lean

If You're So Smart, Why Aren't You Happy?

by Raj Raghunathan · 25 Apr 2016 · 505pp · 127,542 words

Capitalism: Liberating the Heroic Spirit of Business (Cambridge, MA: Harvard Business Review Press, 2014). “room for everyone to grow”: W. C. Kim and R. Mauborgne, Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant (Cambridge, MA: Harvard Business Review Press, 2015). 110 percent more profits: J

Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do About It)

by Salim Ismail and Yuri van Geest · 17 Oct 2014 · 292pp · 85,151 words

. (2013). Ten Types of Innovation: The Discipline of Building Breakthroughs. Wiley. Kelly, K. (2011). What Technology Wants. Penguin Books. Kim, W. C., & Mauborgne, R. (2005). Blue Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant, Harvard Business Review Press. Kurzweil, R. (2006). The Singularity Is Near: When Humans Transcend

Long Game: How Long-Term Thinker Shorthb

by Dorie Clark · 14 Oct 2021 · 201pp · 60,431 words

into making it onto the coveted list. The people on that list were business giants, like W. Chan Kim and Renée Mauborgne, whose seminal book Blue Ocean Strategy has sold four million copies. On a chilly Monday evening, I found myself in a cavernous banquet hall with a sea of tuxes and ball

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, 121–122 Bellezza, Silvia, 22–23 Bezos, Jeff, 196, 199–200 bicycling advocacy, 101 Biden, Joe, 145 Birsel, Ayse, 110, 111 Blank, Steve, 180–181 Blue Ocean Strategy (Kim & Mauborgne), 179 Blumenthal, Sidney, 176 BMI Workshop, 82, 88, 175, 192–193 Bold (Diamandis & Kotler), 165–166 Boston Phoenix (newspaper), 176 Braiker, Zach, 86

Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game

by Walker Deibel · 19 Oct 2018

pivoted after identifying the best route to growth. Innovation paired with execution is at the core of every evolving business. BLUE OCEAN OFFERINGS The book Blue Ocean Strategies by Chan Kim and Renee Mauborgne examines the strategic business models of companies that merge two standard offerings together to form something completely unique. By

The Personal MBA: A World-Class Business Education in a Single Volume

by Josh Kaufman · 2 Feb 2011 · 624pp · 127,987 words

produce massive results. SHARE THIS CONCEPT: http://book.personalmba.com/amplification/ Barrier to Competition Don’t compete with rivals—make them irrelevant. —W. CHAN KIM, BLUE OCEAN STRATEGY How much attention are you paying to what your competitors are doing? The more time and energy you spend following your competition, the less time

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. Drucker ▶ The Simplicity Survival Handbook by Bill Jensen CORPORATE STRATEGY ▶ Purpose: The Starting Point of Great Companies by Nikos Mourkogiannis ▶ Competitive Strategy by Michael Porter ▶ Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne ▶ Green to Gold by Daniel Esty and Andrew Winston ▶ Seeing What’s Next by Clayton M. Christensen, Erik

The Crux

by Richard Rumelt · 27 Apr 2022 · 363pp · 109,834 words

. DEDUCTION VERSUS DESIGN Carl Lang was attempting to deduce a strategy from strategy “frameworks” such as Porter’s “Five Forces” or Kim and Mauborgne’s “Blue Ocean Strategy Canvas.” But such frameworks are designed to call attention to what might be important in a situation. They do not, indeed cannot, guide one to

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in analyzing situations. And there are many more—value-chain analysis, willingness-to-pay modeling, multinomial logit models of competition, McKinsey’s 7S framework, the Blue Ocean Strategy Canvas, scenario development, benchmarking, product life cycle, root-cause analysis, and more. Each narrows attention to just a few factors or issue, or even just

Framers: Human Advantage in an Age of Technology and Turmoil

by Kenneth Cukier, Viktor Mayer-Schönberger and Francis de Véricourt · 10 May 2021 · 291pp · 80,068 words

can be in describing what is not yet observable. Seeing what isn’t there works in other domains as well. In management, the so-called Blue Ocean Strategy identifies unexplored market spaces—akin to being alone at sea—that companies ought to tap into. It carefully harnesses the qualities of human framing to

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up with options and alternatives on markets and products. Conceived by two professors, W. Chan Kim and Renée Mauborgne, who teach at INSEAD business school, Blue Ocean Strategy has proven useful. The Japanese video game company Nintendo employed it to identify the empty market spaces and products that would become the successful Nintendo

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Amos, “Dancing Gargantuan Black Holes Perform on Cue,” BBC News, April 29, 2020, https://www.bbc.com/news/science-environment-52464250. On Blue Ocean Strategy: W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, expanded ed. (Boston: Harvard Business Review Press, 2015). On the Wright

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, 4–5, 19, 211 Bay of Pigs invasion, 89, 234 Bernanke, Ben “Helicopter Ben,” 49–51, 101 Bezos, Jeff, 134 Black-Scholes theory, 39–40 Blue Ocean Strategy, 35 Branscomb, Lewis, 161 Brin, Sergey, 194 Bronner, Gérald, 213, 214 Brunelleschi, Filippo, 11 Burt, Ronald, 157 Bush, George W., 49 business and management Amazon