Blue Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant Hardcover – 17 Feb 2005
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From the Publisher
Blue Ocean Strategy is the fastest selling title ever published by Harvard Business School Press, with a record-breaking 36 languages sold. Since being published, the book has hit several bestseller lists, including the Wall Street Journal and BusinessWeek, and was the #1 bestselling book for 2005 at 800-CEO-READ.
The book has resonated with executives at small and large companies, nonprofits, and government agencies, many of whom have changed their strategies after reading the book. They include Nintendo, Ford, Samsung, and The Government of Singapore.
- NINTENDO - In an interview about the Nintendo Wii, Perrin Kaplan, vice president of marketing and corporate affairs for Nintendo of America, said "Inside Nintendo we call our strategy `Blue Ocean.' " - FORBES.COM, February 2007
- FORD - "One major influence on [Ford's secret Piquette Project] is BLUE OCEAN STRATEGY... Copies have been circulating briskly among Ford offices these days." - Detroit Free Press, January 23, 2006
- SAMSUNG - "Samsung Electronics has not only embraced, but has meticulously developed and applied to its product development this Value Innovation theory coauthored by Professors Kim and Mauborgne." - Korean Economic Daily
Top customer reviews
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.
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.
About my book reviews - I aim to be a tough reviewer because the main cost of a book is not the money to buy it but the time needed to read it and absorb the key messages. 5 stars means that I think that overall it has some vital messages in it.
Paul Simister, business coach
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