Spring 2005 | Vol.47, No.3 | REPRINT SERIES Blue Ocean Strategy: From Theory to Practice W. Chan Kim Renée Mauborgne (© 2005 by Th Regents of ‘he Universtiy of Gatomia eters of alam Berkeley"Blue Ocean Strategy: _ FROM: THEORY TO PRACTICE Ww. Chan Kim Renée Mauborgne ‘or twenty-five years, competition has been at the heart of corporate strategy. Today, one can hardly speak of strategy without involving the language of competition: competitive strategy, competitive benchmarking, building competitive advantages, and beating the competition. Such focus on the competition traces back to corporate sirategy’s roots in military strategy, The very language of corporate strategy Is deeply imbued with military references—chief executive “officers” in *headquacters,* “troops” on the “front lines,” and fighting over a defined battlefield.” Industrial organization (10) economics gave formal expression 1o the prominent importance of competition to firms’ success. 10 economics suggests a causal flow from marker scructure 10 conduct and performance.* Here, market structure, given by supply and demand conditions, shapes sellers’ and buyers’ conduct, which, in turn, determines end performance? The academics call this the structuralist view, or environmental determinism. Taking market structure as, given, much as military strategy takes land as given, such a view drives compa- rigs 10 ty to carve out a defensible position against the competition in the exist- ig market space. To sustain themselves in the markeiplace, practitioners of strategy focus on building advantages over the competition, usvally by assessing ‘what competitors do and striving to do it better. Here, grabbing a bigger share of the market is also seen as a zero-sum game in which one company's gain is achieved at another company’s loss. Hence, competition, the supply side of the equation, remains the defining variable of strategy with the focus on dividing up existing industry space, ‘Adapted rom BLUE OCEAN STRATEGY: How to Create Urcontested Market Space and Make the Competition relevent by W. Chan Kim and lenge Mauborene, Copyright © 2008 by Harvard Bust 15s School Pubishing Corporation, Al Righs Reserve. IFORMA MANASEMENNT EEN OL UTNOLS Si