Blue Ocean Strategy: Navigating Uncharted Waters for Business Success

By: Doug Verley

Introduction:

Blue Ocean Strategy, a groundbreaking concept introduced by W. Chan Kim and Renée Mauborgne, challenges traditional business thinking by encouraging companies to seek uncontested market spaces—blue oceans—rather than competing in existing markets. In this overview I delve into the core principles, methodologies, and real-world applications of Blue Ocean Strategy.

Key Differentiators from Traditional Strategy:

Blue Ocean Strategy stands apart from traditional strategic thinking by focusing on creating new markets rather than competing in existing ones. Unlike traditional strategies that often involve intense competition (Red Oceans), Blue Ocean Strategy aims to render competition irrelevant by exploring untapped market spaces.

When to Use Blue Ocean Strategy:

• Market Creation: When existing markets are saturated, and differentiation is challenging.
• Reconstruction: For industries with outdated or inefficient practices.
• Innovation: When there's a need for innovative solutions and value creation.
• Customer-Centric Approach: To address latent customer needs and preferences.

Tools and Models in Blue Ocean Strategy:

• Four Actions Framework: This model challenges companies to eliminate, reduce, raise, and create factors in their industry.
• Strategy Canvas: A visual representation that compares a company's strategy against its competitors.
• Six Paths Framework: Helps in identifying new market spaces by exploring alternative industries and strategic groups.
• Blue Ocean Idea Index (BOI): A tool for assessing the feasibility and potential impact of a blue ocean idea.

Examples of Companies and People Implementing Blue Ocean Strategy:

• Cirque du Soleil: Redefined the circus industry by combining elements of theatre and circus arts.
• Nintendo Wii: Transformed the gaming industry by targeting non-gamers with innovative motion-sensing technology.
• Yellow Tail Wine: Entered the wine market with an approachable brand, making wine more accessible.

Step-by-Step Approach or Methodology:

1. Visualise Current Strategy: Use the Strategy Canvas to understand the current state of the industry.
2. Explore Six Paths: Identify alternative industries, strategic groups, and trends that can inspire innovation.
3. Define Four Actions: Eliminate, reduce, raise, and create factors to reconstruct your industry.
4. Create a Blue Ocean Idea: Develop and test innovative ideas that set you apart from competitors.
5. Evaluate Feasibility: Use the Blue Ocean Idea Index (BOI) to assess the potential impact and feasibility of your blue ocean strategy.

Conclusion and Recommendations:

Blue Ocean Strategy offers a transformative approach to business that can lead to sustained success and market dominance. I recommend business leaders consider this approach, especially when faced with intense competition or a need for innovation. Embracing Blue Ocean Strategy requires a shift in mindset and a commitment to challenging the status quo.

Call to Action:

For personalised insights into implementing Blue Ocean Strategy for your business, contact me, Doug Verley at 0405 122 345. The first exploratory telephone discussion is FREE, with subsequent consultations available at an hourly rate of AU$239 plus GST.

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