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46 of 49 people found the following review helpful
TOP 100 REVIEWERon 23 September 2005
This is an especially thought-provoking book which, as have so many others, evolved from an article published in the Harvard Business Review. According to Kim and Mauborgne, "[in italics] Blue ocean strategy [end italics] challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant...This book not only challenges companies but also shows them how to achieve this. We first introduce a set of analytical tools and frameworks that show you how to systematically act on this challenge, and, second, we elaborate the principles that define and separate blue ocean strategy from competition-based strategic thought." There are six principles which are introduced and then discussed on pages 49, 82, 102, 117, 143, and 172, respectively.
Frankly, I was somewhat skeptical that this book could deliver on the promises made in its subtitle. In fact, the material provided by Kim and Mauborgne is essentially worthless unless and until decision-makers in a given organization accept the challenge, are guided and informed by the six principles, and effectively use the tools within appropriate frameworks. The responsibility is theirs, not Kim and Mauborgne's. To assist their efforts, Kim and Mauborgne focus on several exemplary companies which have dominated (if not rendered irrelevant) their competition by penetrating previously neglected market space. They include the Body Shop, Callaway Golf, Cirque du Soleil, Dell, NetJets, the SONY Walkman, Southwest Airlines, Starbucks, the Swatch watch, and Yellow Tail wine.
Of greatest interest to me is Kim and Mauborgne's assertion that the innovations which enabled these companies to succeed with a Blue Ocean strategy did NOT depend upon a new technology. Rather, each company pursued a strategy which enabled it to free itself from industry boundaries. For Dell, that meant mass production of computers sold directly to consumers per each customer's specifications. Quite literally, each sale is "customized." For Callaway, creating an enlarged sweet spot to increase the frequency of solid contact for new or infrequent golfers just as, years ago, the enlarged Head racquet did so for new or infrequent tennis players. For Starbucks, creating a congenial environment within which to socialize, go online, or read while consuming coffee. All of these Blue Ocean strategies created new or much greater value for customers. Their emphasis is on the quality of experience, not on the benefits of a new technology.
According to Kim and Mauborgne, their research indicates that "the strategic move, and not the company or the industry, is the right unit of analysis for explaining the creation of blue oceans and sustained high performance. A strategic move is the set of managerial actions and decisions involved in making a major market-creating business offering." The cornerstone of a Blue Ocean strategy is value innovation which occurs "only when companies align innovation with utility, price, and cost positions. If they fail to anchor innovation with value in this way, technology innovators and market pioneers often lay the eggs that other companies hatch." For Kim and Mauborgne, value innovation is about strategy that embraces the entire system of a company's activities. It requires companies to orient the whole system toward achieving a "leap" in value for both buyers and themselves. Kim and Mauborgne explain HOW to create uncontested market space wherein competition is essentially irrelevant.
To paraphrase Henry Ford, whether decision-makers think they can or think they can't do that, they're right.
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3 of 3 people found the following review helpful
on 11 December 2008
W. Chan Kim is Professor of Strategy and International Management at INSEAD. Renée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy and Management. This book was published in 2005 and consists of three parts, whereby each part consists of 2-to-5 chapters each. There is also a short preface and 3 proper appendices.

The aim of the book is made clear in the preface: to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red waters of known market space. Whereby the authors in the first chapter introduce blue ocean strategy: "... blue ocean strategy challenges companies to create uncontested market space that makes the competition irrelevant ... blue ocean strategy is about growing demand and breaking away from the competition." The successful formulation and execution of blue ocean strategy is based on six principles which are discussed in chapter 3 through to 8. However, Chapter 2 first introduces the analytical tools and frameworks that are essential for creating and capturing blue oceans.

The 4 chapters in Part II - Formulating Blue Ocean Strategy introduce the four guiding principles for the successful formulation of blue ocean strategy. Chapter 3 identifies the paths by which you can systematically create uncontested market space across diverse industry domains, hence attenuating `search risk'. The authors introduce the `six paths framework' which have general applicability across industry sectors for remaking market boundaries. In the fourth chapter, the authors recommend companies to redesign their traditional strategic planning process and focus on the big picture, via the strategy canvas, to create value innovation and thereby tackling `planning risk'. The authors minimize `scale risk' in Chapter 5 by challenging conventional practice of aiming for finer segmentation to better meet existing customer preferences and create the greatest market of new demand. Chapter 6 addresses `business model risk' by ensuring that a company builds a viable business model to product and maintain profitable growth through a strategy sequence of utility, price, cost, and adoption.

In Part III - Executing Blue Ocean Strategy the authors turn to the principles that drive effective execution of blue ocean strategy. Specifically, Chapter 7 deals with organizational risk and introduces `tipping point leadership', which managers can use to mobilize an organization the key organizational hurdles that block the implementation of a blue ocean strategy. Chapter 8 argues for the integration of execution into strategy making and deals with `management risk' associated with people's attitudes and behaviors. The final chapter discusses the dynamic aspects of blue ocean strategy - the issues of sustainability and renewal. "Creating blue oceans is not a static achievement but a dynamic process." In addition, there are 3 proper appendices to assist in the explanation of blue ocean strategy.

Yes, I do like this book. I see this book as a complement in the field of strategy to Michael E. Porter's landmark book "Competitive Strategy". The authors focus on the creation of blue oceans, which is about growing (new) demand and breaking away from the traditional face-to-face competition that can be seen in red oceans. Blue ocean strategy is based on 4 formulation and 2 execution principles that address both opportunity and risk. Just keep in mind that creation of blue oceans will take time, requires determination to sustain and continuously renew the chosen strategy.
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4 of 4 people found the following review helpful
on 22 June 2009
For me, the core of the book consists of the first two chapters - 'Creating blue oceans' and 'Analytical tools and frameworks'. These outline the processes of opening up new demand and of using 'strategy canvases' to map your offering against other businesses'. The canvas is a neat tool - easy to use, easy to communicate, easy to remember - that I've found useful in practical settings. The book rather loses focus and shape in the later chapters on implementation.
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95 of 106 people found the following review helpful
on 10 January 2005
The authors have published many articles over the last decade on Value Innovation. This is their first book. It summarizes their extensive knowledge on out-of-the-box strategic thinking. I'm looking forward to reading it. This review is based on their article in Harvard Business Review, Oct 2004, on "Blue Ocean Strategy".
What is a BLUE OCEAN STRATEGY? The authors explain it by comparing it to a red ocean strategy (traditional strategic thinking):
1. DO NOT compete in existing market space. INSTEAD you should create uncontested market space.
2. DO NOT beat the competition. INSTEAD you should make the competition irrelevant.
3. DO NOT exploit existing demand. INSTEAD you should create and capture new demand.
4. DO NOT make the value/cost trade-off. INSTEAD you should break the value/cost trade-off.
5. DO NOT align the whole system of a company's activities with its strategic choice of differentiation or low cost. INSTEAD you should align the whole system of a company's activities in pursuit of both differentiation and low cost.
A red ocean strategy is based on traditional strategic thinking - e.g. Harvard's strategy guru Michael Porter - and is what the authors believe you should not do.
A blue ocean is created in the region where a company's actions favourably affect both its cost structure and it value proposition to buyers. Cost savings are made from eliminating and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in, due to the high sales volumes that superior value generates.
Examples of key blue ocean creations include:
- Japanese fuel-efficient autos (mid-70s) and Chrysler minivan (1984)
- Apple personal computer (1978) and Dell's built-to-order computers (mid-1990s).
The INSEAD professors Kim and Mauborgne have written regularly on the subject of Value Innovation since 1997 in Harvard Business Review. Being a business development manager, their thought leadership on strategic innovation has inspired me tremendously over the years. Their articles have been standard texts for many MBA students for some time (e.g. "Value Innovation", "Creating New Market Space", "Charting your Company's Future"). I expect their first book to be just as dominant in any strategy library as Michael Porter's books (the guru behind the classic red ocean strategies).
The rating is based on their articles so far.
Peter Leerskov,
M.Sc. in International Business (Marketing & Management) and Graduate Diploma in E-business
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19 of 21 people found the following review helpful
on 27 January 2006
I have been reading their reviews over the years and its good to see a summary book of their principles of value innovation. Their contextual examples really emphasise their thoughts well and for any practising marketeer, the strategic canvass section is an excellent tool in developing genuine new market space. By identifying key qualities in a market, or consumer need, and then reducing, eliminating, increasing or creating qualities, new market space is found. The end of the book is filler and offers no more insight than many other books on similar subjects - but then at least you only have to read half the book to gets it true value.
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2 of 2 people found the following review helpful
VINE VOICEon 14 July 2011
By now (2011) this is known as a 'classic' with its metaphor of both Blue Oceans and Red Oceans for new clear markets or competitor bashing crowded markets. There is a wealth of material and both a theory and lots of cast studies.

I do think a number of the case studies have been fitted to the theory and the authors might have sought out only examples that fit the theory but overall this is a decent read and compelling.

My one observation is that the section on change is rather portable and not particularly Blue Ocean though is a decent essay on change
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1 of 1 people found the following review helpful
on 20 July 2010
"There are many idustries that are now at saturatiojn and the competition continues to increase. The result is a fight to the death and sadly many business owners go out of business in this blood bath which the book calls the RED Ocean. The alternative is to look for a BLUE Ocean where there are many customers wating for you to meet their needs and there is no competition! Now this sounds too good to be true but the book gives examples of some of the toughest industires out there where companies have broken free from the crowds and discovered uncontested market space. The book takes you through a number of steps you can introduce to your company to have the same success as the companies in the book. Whether you are in a red ocean or an industry where there is less competition this book is a must - first class!"
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1 of 1 people found the following review helpful
on 4 September 2008
This is a highly influential and important book in the field of innovation and business strategy. Most markets are crowded with me-too companies fighting each other with cut-throat discounts and special offers. Kim and Mauborgne show how you can move out of this bloody 'red ocean' into a different and more profitable 'blue ocean.' I found the most useful part of the book was the description of company 'value curves' which compare the values that you offer in different aspects of your product or service with those of your competitors. It is an invaluable starting point in searching for ways to gain competitive advantage through innovation. There are some good case studies and examples. The later parts of the book on implementing the strategy are a little weaker but overall it is highly recommended.
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on 23 May 2015
This is an excellent book for helping you to think in a more tangible way about differentiating a business or a new product innovation.

It's easy to say "you must be different" but this book helps you to think through those differences in terms of what customers value when they are buying and consuming a product or service.

It also helps you to think through innovations by looking across different markets like substitute solutions and complementary products that are bought with, before or after the product.

It presents practical tools to help you to think about your business and the opportunities for creating different products but, as always, even good tools can be used badly. Success still depends on insight, inspiration and perspiration.

I also think the red ocean / blue ocean analogy is powerful in that it warns against me-too copying, even if it is a little corny. You may not get into the blue ocean but purple is often enough to give customers a genuine choice that wins the preference of some buyers.

Some of the case studies have been used elsewhere and if you read a lot of business books, it can get repetitive but I tend to prefer to read about businesses and products that I know about since I can relate them to my previous opinions and challenge or accept what's written. There is a newer version of the book which I haven't yet read although I intend to. I'm not yet sure whether there's enough new material of sufficient to justify the extra the extra cost.
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on 28 June 2012
For me Blue Ocean Strategy provided a challenging perspective of strategy, albeit one that I embraced quite readily. The colour metaphor that characterised this perspective of strategy, was what attracted my interest and drew me to this book in the first place. And I was not disappointed. It was different from anything I had read and have been taught about strategy before. And it made sense in hindsight, seeing why companies like Dell, despite being small was able to compete, sorry not compete, but survive and thrive in the same product market as the mighty IBM without necessarily being in the same market space, if you get the pun.

The premise on which the Blue Ocean Strategy thesis is built, is a simple one. Create a new market space through innovating on the value you give to the customer. This, the authors refer to as the cornerstone of the Blue Ocean Strategy. I must confess that value innovation on a first read sounds counter intuitive to the twin principles of either competing on being different and expensive (differentiation), or being like everyone else and selling cheaper (cost leadership).

But once you get your head around it as they say in England, then it is quite straight forward following the formulation principles outlined so beautifully in the book. The first principle of reconstructing market boundaries can sound very daunting to a new comer to the field of strategy, since in standard red ocean strategy arena, market boundaries come as given. And yet it is the very act of thinking about reconstructing the existing market boundaries that gives birth to thoughts and strategies for creating your value innovation. It is this reconstruction that allows you to focus on the big picture, instead of the numbers, which is the next formulation principle in your Blue Ocean Strategy toolkit.

The next two principles ; reaching beyond existing demand and getting the strategic sequence right are just plasters that hold your reconstructed market boundaries and value innovation together. So also are the four action framework of eliminate, reduce, raise and create industry factors in order to create this new value for your customer. In addition, the authors provide three characteristics of a good strategy to guide your journey. You are advised to ensure that your value curve has a focus, it diverges from other industry players, and finally, that you need a compelling tagline. Creating strategies could not be simpler. If only someone had told me this when I first started out trying to do strategies.

There are plenty of examples of companies that have wittingly or unwittingly created strategies that the authors have identified as Blue Ocean and provided a theoretical underpinning for them and most importantly demonstrated that it possible to systematically recreate them or indeed create new ones. So, go ahead jump into the blue ocean and start creating some Blue Ocean Strategies. The world of crafting strategies as Henry Mintzberg prefers to put it can never be the same again.
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