Blue Ocean Strategy: Creating Uncontested Market Space
Have you ever wondered how some companies are able to break through the competition and create a new, uncontested market space? This is the concept behind the book, Blue Ocean Strategy, written by W. Chan Kim and Renee Mauborgne. In this book review , we will explore the key concepts and strategies outlined in Blue Ocean Strategy and how they can be applied to business.
Introduction
Blue Ocean Strategy is a business strategy book that challenges the traditional approach of competing in an existing market space, or “red ocean,” and instead encourages companies to create a new, uncontested market space, or “blue ocean.” The book provides a framework for identifying and creating a blue ocean strategy, as well as examples of successful companies that have implemented this approach.
Red Ocean vs Blue Ocean
The “red ocean” represents the existing market space, where companies compete against each other for a share of the market. This often results in a “bloody” competition, with companies fighting for the same customers, using price cuts and promotions to gain market share.
In contrast, the “blue ocean” represents a new, uncontested market space, where companies create demand for their product or service, rather than competing for it. This involves identifying new customer needs and creating a product or service that meets those needs in a unique way.
The Four Actions Framework
The Four Actions Framework is a key tool outlined in the Blue Ocean Strategy book. This framework involves identifying four key areas where a company can make strategic moves to create a blue ocean strategy:
- Eliminate: Identify which factors of the industry can be eliminated to reduce costs and create a more streamlined product or service.
- Reduce: Determine which factors can be reduced to streamline the product or service, such as reducing the number of features or components.
- Raise: Identify which factors can be raised to increase the value proposition of the product or service, such as increasing quality or customer service.
- Create: Determine which factors can be created that do not currently exist in the industry, such as offering a new feature or service that meets a unique customer need.
By using the Four Actions Framework, companies can identify key areas where they can differentiate themselves from the competition and create a new, uncontested market space.
Examples of Blue Ocean Strategy
The Blue Ocean Strategy book provides numerous examples of successful companies that have implemented a blue ocean strategy. One such example is Cirque du Soleil, a circus company that created a new type of entertainment that combined theater and circus arts. By eliminating certain traditional circus elements, reducing the number of acts, raising the production value, and creating a unique brand image, Cirque du Soleil was able to create a new and uncontested market space.
Another example is Southwest Airlines, which created a new market space by offering low-cost, no-frills air travel to customers who were price-sensitive. By eliminating certain features such as assigned seating and in-flight meals, Southwest was able to reduce costs and offer affordable air travel to a new segment of customers.
Conclusion
Blue Ocean Strategy is a powerful tool that can help businesses break through the competition and create a new, uncontested market space. By using the Four Actions Framework and identifying key areas where they can differentiate themselves from the competition, companies can create a unique value proposition that meets the needs of a new customer segment.
Blue Ocean Strategy is a must-read book for any business leader or entrepreneur who is looking to create a new market space and differentiate themselves from the competition. By understanding the key concepts and strategies outlined in the book, companies can create a blue ocean strategy that drives growth and success.
