The Blue Ocean Strategy Team

A group of middle managers sat in a comfortable conference room overlooking Lake Superior. All
five- were impressed by the technology in the room, the furniture, and the refreshment. At 8:30
AM the meeting began, and team leader Laura spoke first.

‘We all know why we are here. Baxter, our CEO, has fallen in love with Blue Ocean Strategy after
reading the book and attending a conference. He thinks our conglomerate is too conventional.
We go after markets in which we can compete successfully and earn a decent profit in practically
all of our divisions.’

Team member Ken asked.” So, what’s wrong with being successful? What’s wrong with turning
in good profits quarter after quarter and seeing our stock price rise year by year?

Her pupils widening, Laura said, “What ‘s wrong is that we are competing in the Red Oceans
where the sharks are attacking each other and the other the other fish. Baxter wants us to
compete in market space that does not already exist. We should be creating a new demand and
then filling the demand. Baxter wants us to come up with some Blue Ocean ideas that he will
then consider.”

“I get it, “said Carmen. “We should stay in the profitable markets our various divisions already
serve. At the same time, we should get into new markets that nobody is serving. How about
making battery-operated microwave ovens that will work in the moon? In a few years, we might
have loads of private citizens taking trips into outer space.”

“Great sense of humor, Carmen,” respond Donte, “but the demand might too small.”

Laura then clicked open a PowerPoint slide listing the 58 products and services the company
already provides. She told the group, “Baxter says we should forget about these markets already
being served. We have to invade new markets, maybe even create a market”.

“Whoever thought 40 years ago that people would walk around listening to a device that could
store 1,000 tunes? Whoever thought people would pay for a package delivery service that
competed with a government-backed postal service? Whoever thought people would want to
read books, magazines and newspapers on a device that looks and feels like the old Etch-A-Sketch
toy?”

Bruce commented, ‘You are saying that as the Blue Ocean strategy Team we have to identify a
multimillion dollar market space that no other company is serving right now. The world already
has millions of products and services being offered. How will humble team identify a market of
value that does not already exist”?

Laura said, “I don’t know how we will find our blue Ocean Strategy, but I do know that Baxter
wants our report in 30 days. We will meet for four consecutive full-day sessions on Thursday to
get the job done. We probably will be communicating with each other between the meetings
also. Let’s get to work right now.’