Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant Hardcover – Jan 20 2015
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Praise for Blue Ocean Strategy:
A bestseller across 5 continents
More than 3.5 million copies sold worldwide
Translated into 43 languages
A Wall Street Journal, BusinessWeek, and Fast Company bestseller
Thinkers50 Strategy Award for Best Business Book of the decade
The Fast Company Leadership Hall of Fame
Winner of the Carl S. Sloane Award for Excellence in Management Consulting
About the Author
W. Chan Kim and Renée Mauborgne are Professors of Strategy at INSEAD and Co-Directors of the INSEAD Blue Ocean Strategy Institute. They are the authors of Blue Ocean Strategy, which has sold over 3.5 million copies, is being published in a record-breaking 43 languages, and is a bestseller across five continents. They are ranked No. 2 in The Thinkers50 listing of the World's Top Management Gurus and are the recipients of numerous academic and management awards including the Nobel Colloquia Prize for Leadership on Business and Economic Thinking, the Carl S. Sloane Award by the Association of Management Consulting Firms, the Leadership Hall of Fame by Fast Company, and the Eldridge Haynes Prize by the Academy of International Business among others. Kim is an advisor to several countries and Mauborgne is a member of President Barack Obama's Board of Advisors on education.
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While most businesses and organizations are trapped in very difficult competitive environments, there are plenty of examples around of organizations which have carved out their highly profitable blue-ocean niche. Is their success attributable solely to rare strategic brilliance or luck, or is there a systematic way of coming up with winning strategies? According to the authors, there are systematic ways of finding blue oceans, and the book provides a number of tools designed to help the reader do just that.
Blue ocean strategy is fundamentally based on value innovation; that is, finding a new way of providing compelling value to clients or customers by pursuing both differentiation and low cost at the same time. To do this, you identify the different strategic factors applicable to a particular industry, and then select some factors to be reduced well below the industry’s standard, some to be raised, some to be eliminated and some new ones to be created. The result of the process needs to be a focused strategy which diverges significantly from the industry’s average profile, and which comes with a compelling tagline.
However, a truly sustainable blue ocean strategy also needs barriers to imitation. These can include:
• Alignment barriers, making it difficult for competitors to align their value proposition, profit and people in the same way
• Cognitive and organizational barriers, whereby the particular form of value innovation conflicts with competitors’ conventional logic
• Brand barriers, whereby the value innovation conflicts with competitors’ brand image
• Economic and legal barriers, such as patents, a natural monopoly or a cost advantage driven by high volume
While not every reader of the book will discover a perfectly formed blue ocean strategy, almost every reader who spends time and effort working through the tools provided by the authors will come up with some creative strategic ideas which might not otherwise have arisen. This is one of my favourite books on strategy and, although the changes between the first edition and the expanded edition are not substantial, they are still enough to justify the price of buying the new edition.
This book changed my life. And I am not alone...over 3.5 million copies have sold in 43 languages. Now, this new, expanded edition gives concrete evidence that the BOS analytic tools and framework do actually work! As a businessman and business owner over 31 years, I spent an inordinate amount of time in bloody Red Oceans. The chapter on Red Ocean Traps is more than worth the price of the book. If I had had the benefit of Blue Ocean Strategy back when I was working night and day building my own business, I would have not only been more successful, but I would have been dangerous!
I highly recommend this expanded edition to everyone in business, nonprofits, and even government who want to, who need to radically change the status quo.
Author of CODE 936
What impresses me the most is the articulation about strategy in terms of three strategy propositions - value, profit and people and the emphasis on the alignment of these three propositions. This new definition of strategy not only subsumes those of traditional strategy theories (as its overarching principles apply to both blue ocean and red ocean strategies), but also for the first time --among all the strategy works I am aware of -- connects the scientific analytic of strategy content with the human dimension of strategy in action and makes the latter an integral part of strategy itself. Any strategy is ultimately about people, as it is made by people and executed by people. This is a major observation I have made from years of business experience. This was also why the original edition of blue ocean strategy, with its call for "building execution into strategy" already struck a chord with me ten years ago. Now the expanded edition highlights this point with a full-fledged framework and a thorough guide on how the people dimension of strategy should be addressed upfront and in the course of strategy making along with building a compelling value proposition for the buyers and a viable profit proposition for the company. How an organization achieves a strategic transformation is no longer a question merely in the realm of change management. It is built into the strategy making process itself. The book applies this principle to analyzing interesting practical examples, like Tata Nano. The explanation given about the setback of Tata Nano is really eye-opening and solves the puzzle in my mind as to why this fascinating concept of the people's car, after creating a lot of positive buzz worldwide, failed to make a real breakthrough in the market.
To me this new edition is more than an expansion of the original content of the book. It should lead a new wave of paradigm shift in the field of strategy, both in theory and practice.
The problem with it is there is no actionable steps. It tells you what other companies did but not in depth on how they did it & not even a little bit of how to implement the steps yourself. Pure fluff. Simple as that.
In studying companies and their fates the authors came to the conclusion that neither the companies nor the industries accurately described the roots of differences in performance – instead it was down to the so called strategic moves, i.e. managerial actions creating a new business offering and a new market. In a study they researched the strategic moves of over 150 companies in 30 industries trying to unveil the common factors that lead to some companies developing value innovations that opened up unexploited markets, making previous competition irrelevant.
Despite a history that has shown constant changes in the business environment and the success of companies, most managers are mentally locked into the current industry structure focusing on how to beat their competitors. The authors symbolize this environment with the metaphor of a red ocean, an ocean where companies fight each other and where the water is colored red by the bitter combatants’ blood. If you instead take the view that the world is in constant change and innovative companies often create new markets the question becomes how to execute this creation of a new blue ocean where a company – at least temporary - can swim alone without competition.
In the key second chapter the authors present a set of analytical tools to help companies to come up with value innovations to reshape their business. The main two are the Strategy Canvas mapping the various factors that the industry is currently competing on and the Four Actions Framework asking four questions: “1) Which of the factors that the industry takes for granted should be eliminated? 2) Which factors should be reduced well below the industry’s standard? 3) Which factors should be raided well above the industry’s standard? and 4) Which factors should be created that industry never has offered?”. Building on this foundation the rest of the chapters expand on the task by showing how to find a blue ocean of sufficient size, how to build a viable business model around it and how to overcome the inevitable external and internal obstacles.
Rereading the book I must admit that not all of the text is entirely original and although it’s nice that The Blue Ocean is an easy read, the book frankly lacks depth. I would argue that apart from “strategic moves”, industry dynamics and economy also matter hugely. If you are selling commodities like iron ore or oil, finding blue oceans becomes fairly tricky.
Nevertheless, it’s a book that has become an integral part of the strategy literature canon and in Michael Porter-terms, the authors undoubtedly found an underserved niche in the strategy literature industry with their focus on the creation of brand new markets. The book is quite practical and gives the appropriate weight to strategy execution and not only strategy formulation. The core models are perhaps just two, but they are useful as they make the reader start thinking in new directions and in this respect The Blue Ocean fulfills its purpose. I also quite like the approach of writing a book for the brave, for those who want to make a big difference instead of doing marginal improvements within given limits. This doesn’t mean breaking away, making competition irrelevant, is an easy thing to do just because you try. But if you don’t try you’ll never succeed.
We recommend the book for inspiration rather than a mass of new insight.
This is a review by investingbythebooks.com
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