BLUE OCEAN STRATEGY BOOK REVIEW

This is an especially thought-provoking book written by W. Chan Kim and

Renée Mauborgne, evolved from an article published in the Harvard
Business Review. According to Kim and Mauborgne, "Blue Ocean Strategy
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.FIRST,A set of analytical tools and frameworks that
show you how to systematically act on this challenge, and,
SECOND,elaborate the principle that define and separate blue ocean
strategy from competition-based strategic thought." The material provided
by Kim and Mauborgne is essentially worthless, however, unless and until
decision-makers in a given organization accept their 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.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.Upcoming electric vehicles also
comes under the purview of blue ocean.As companies who would be able
to give more battery range & more charging points customer will shift in
that direction.For eg.Mg hector,hyundai kona,tata nexon,m&m kuv 100 ev.

Red oceans are all the industries in existence today – the known market
space. In red oceans, industry boundaries are defined and accepted, and
the competitive rules of the game are known.Here, companies try to
outperform their rivals to grab a greater share of existing demand. As the
market space gets crowded, profits and growth are reduced. Products
become commodities, leading to cutthroat or ‘bloody’ competition. Hence
the term red oceans.

Blue oceans, in contrast, denote all the industries not in existence today –
the unknown market space, untainted by competition. In blue oceans,
demand is created rather than fought over. There is ample opportunity for
growth that is both profitable and rapid.

Tools-

 Value innovation

 Strategy canvas

 Four actions framework

 Six path framework

 Pioneer migrator settler map

 Three tiers of non-customers

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 that 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.
VIBHAV BHATNAGAR

MGFM-1904