How do you measure the impact of a blue ocean strategy on your performance?

1 What is blue ocean strategy?

Blue ocean strategy is a term coined by W. Chan Kim and Renee Mauborgne, authors of the best-selling book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. The idea is to create a new market space, or a blue ocean, where there is no or little competition, rather than competing in an existing market, or a red ocean, where there is fierce rivalry and price wars. By offering a unique value proposition that satisfies the unmet needs and desires of customers, a blue ocean strategy can create new demand and generate profitable growth.

3 What are the disadvantages of blue ocean strategy?

However, blue ocean strategy is not without its challenges and risks. One of the main disadvantages of blue ocean strategy is that it can be difficult to implement and sustain, as it requires a high level of commitment and alignment from your team, partners, and stakeholders. You may also face resistance or imitation from your existing or potential competitors, who may try to copy or counter your value proposition. Moreover, you may encounter uncertainties and unpredictabilities in the new market space, as you may not have enough data or feedback to validate your assumptions and hypotheses.

4 How can you measure the impact of blue ocean strategy?

To measure the impact of blue ocean strategy, you need to have a clear and quantifiable goal and a set of key performance indicators (KPIs) that reflect your value proposition and your market position. Additionally, you must have a reliable and consistent way of collecting and analyzing data and feedback from customers, competitors, and the market. To help you measure the impact of blue ocean strategy, you can use tools such as the strategy canvas, the four actions framework, the buyer utility map, and the blue ocean idea index. The strategy canvas is a visual tool that compares your value proposition with your competitors' on the key factors that affect customer choice. The four actions framework helps you identify the factors that you can eliminate, reduce, raise, or create to achieve value innovation. The buyer utility map assists in assessing how your value proposition delivers utility to your customers across the six stages of the buyer experience cycle. Lastly, the blue ocean idea index evaluates your value proposition based on the four criteria of blue ocean strategy: utility, price, cost, and adoption.