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551 of 589 people found the following review helpful
5.0 out of 5 stars Value Innovation - strategy book of the year 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.

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...
Published on January 10, 2005 by Peter Leerskov

versus
606 of 655 people found the following review helpful
1.0 out of 5 stars I thought oceans were deep...
This book is mostly "fluff". Its basic argument is that companies who find themselves in hotly contested markets ("red oceans") should look for uncontested markets ("blue oceans"). They should do it in such a way as to ensure revenues (so go for mass), and profit (so watch the cost). Wow. I guess if the authors said: go for high-cost-small-markets, at least it will be...
Published on January 11, 2006 by B. Gilad


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551 of 589 people found the following review helpful
5.0 out of 5 stars Value Innovation - strategy book of the year 2005?, January 10, 2005
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
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.

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.

Some cases:
* Airline industry price wars result in bankruptcies and low profit margins. Southwest Airlines creates a new market by offering the speed of air travel with the low cost and flexibility of driving.
* Golf equipment industry competes to win a greater share of existing golf customers. Callaway Golf creates "Big Bertha", a golf club with a large head that attracted new customers to golf that had been frustrated by the difficulty of hitting the ball.
* The cosmetic industry creates a red ocean with models, expensive advertising, and promises of youth and beauty. The Body Shop creates a blue ocean that lasts more than a decade by creating functional cosmetics that defied the industry which sold emotionally appealing cosmetics.
* The wine industry gluts the market with a red ocean of thousands of brands competing on the finest oaks and tannins and legacy winey names. Casella wines creates [yellow tail], a blue ocean wine that succeeded by eliminating complexity, elitism and consumer confusion and creating a fun simple image that non-wine drinkers could enjoy.

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 strategic moves that created blue oceans of new, untapped demand:
- NetJets (fractional Jet ownership)
- Cirque du Soleil (the circus reinvented for the entertainment market)
- Starbucks (coffee as low-cost luxury for high-end consumers)
- Ebay (online auctioning)
- Sony (the Walkman - personal portable stereos)
- Cars: Japanese fuel-efficient autos (mid-70s) and Chrysler minivan (1984)
- Computers: 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).

Peter Leerskov,
M.Sc. in International Business (Marketing & Management) and Graduate Diploma in E-business
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606 of 655 people found the following review helpful
1.0 out of 5 stars I thought oceans were deep..., January 11, 2006
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
This book is mostly "fluff". Its basic argument is that companies who find themselves in hotly contested markets ("red oceans") should look for uncontested markets ("blue oceans"). They should do it in such a way as to ensure revenues (so go for mass), and profit (so watch the cost). Wow. I guess if the authors said: go for high-cost-small-markets, at least it will be original! The problem with this book is that it is a mishmash of old ideas, and its mortal sin is that it is trivial. It looks at successful products and service offerings, and in retrospect identifies the characteristics that made them succeed (at least revenue wise, there is no real financial analysis in this book). Naturally, finding those characteristics is the real issue, and it is the realm of entrepreneurial vision. Beyond some trivial labels placed on common sense planning activities, Blue Ocean does not help one iota in finding uncontested markets with large profit potential. Anyone who seriously tries to apply the ideas in the book will find they are either trivial or fluff.

The lack of originality is everywhere. Let's look closer: The book main point is that companies must do different things than competitors to be in uncontested markets. Fans of Michael Porter will immediately recognize this as the theme of his seminal 1996 article "What is Strategy" (go to [...] to buy this article). Interestingly enough, Kim and Mauborgne published their first work on value innovation in...yes, 1997. Porter identified three bases for successful strategies: need-based, variety-based, and access-based. Unlike the authors of Blue Ocean, he did not pretend to have an a priori formula for finding success. All he did was to show what makes a superior strategy, and why superior strategies are sustainable over a long period of time. Kim and Mauborge wrote a "formula" type prescription to finding quick success (by avoiding competition), but they neither truly give any tools to do so, nor prove that the companies they feature have created a sustainable profitable advantage. What the authors say is: focus, diverge and have a great marketing tagline. In other words - you want to be different? Be different. And how do you know which different to be? Ahhh, that's simple. Look at what customers and noncustomers need but do not get from the existing offering of the incumbents in the industry. Wow. Who would have thought about that?

The main tool of this book, the strategy canvas, is nothing more than an after the fact simplified two dimension graphical presentation of product or services' characteristics that make some products better than others. Do you remember the Quality Deployment Function, a product/service design matrix that came out of Japan, developed in the 80s by the Japanese consultant Yoji Akao? The QFD framework has been used by Japanese companies for decades now to translate "true" (and often unmet and unstated) customer needs into actions and designs to build and deliver a quality product. QDF also came with a little graphic help, but more sophisticated than the one in this book. Finding which characteristics will be the wining ones is an old market research goal, and it is much easier in retrospect.

The authors are not beyond copying any once popular simple concept. In chapter 4 they introduce with a big fanfare a revolutionary new concept, classifying businesses as Pioneers, Migrators, or Settlers. Anyone recognizing Boston Consulting Group's portfolio matrix of cash cow, question mark and star companies is not wrong. This simplistic labeling is what made BCG so popular (and destroyed many companies and made Wall Street discount conglomerates in the US) and probably why this book has attracted people desperately looking for simple solutions in complicated contested markets. But anyone actually responsible for charting strategy and managing competition in real contestable markets (i.e., business managers and executives) will quickly realize this book has no practical substance. It is all fluff. And if you are lucky to create a less contested market, this book will tell you nothing about how to KEEP it that way!

Finally, as a strategy professional, I realized quickly that this book is not really about strategy, which as Porter shows is a whole chain of operational activities geared toward the different positioning. This book is better titled "a book of lists of some successful products and services in the past 20 years, plus some trivial labels of where they were unique" because once you see beyond the superficial façade of the "value innovation process", this is what the book is all about: a list of some successful new products, created by companies and entrepreneurs who had the insight of how to be different. An insight as enigmatic after reading the book as it is before...

To apply the book's measure of "blue ocean innovation", it is not divergent from past books, nor focused on the real issues to justify its price. It does have a catchy tagline though, and like all quick fads, tagline is everything... I feel sorry for my hassled executive friends who are under severe pressure to compete and are hoping this book will help. It will not.
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44 of 45 people found the following review helpful
3.0 out of 5 stars Clever presentation. A quick read. Needs more substance., September 6, 2005
By 
Zdzislaw Nagengast "ted nagengast" (Glen Ellyn, Illinois United States) - See all my reviews
(REAL NAME)   
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
The authors, regular contributors to the Harvard Business Review, have created a book from their previous writings. It's a nice little book, easy to read, with breezy overviews of hand picked examples but totally derivative. However, the authors are 1000% correct in their fundamental points:

It's better to find uncontested market space

Your competition does become irrelevant - for a while.

Create and capture new demand.

Break the value/cost trade-off.

Align a company's whole system of activities in pursuit of differentiation and low cost.

Only one small problem with above - it's hard to do and they offer no real insights into the how. In fact they only devote a handful of pages to the most important aspect of strategy and that is execution of the strategy. That's a serious shortcoming of the book.

I wish they did a better analysis of companies that tried to follow this strategy and failed. That would have been very insightful. I also wish that they weren't so superficial in their examples. Case in point: they reference Southwest Airlines and state that the change they instituted was a result of eliminating meals, and eliminating reservations. They did do those things but they were the icing, not the cake. They never once mention the real reasons they were so disruptive to the industry; Southwest abandoned the traditional hub and spoke model, they maximized the utilization rate of the planes by faster airport turnaround and they changed the labor paradigm dominant in the industry.

They also didn't spend enough time discussing the fact that executing this strategy cannot create a sustainable competitive advantage. They admit to this and discuss the Body Shop as one example. Unfortunately, the best advice they offer up is once your advantage disappears you need to repeat the Blue Ocean process. By the way there are even fewer examples of companies doing this recreation successfully in the real world.

I liked some of the graphics they created. I especially liked the graphic that shows where a company spends its resources. They used it to represent the before and after picture for a company. I find this is a great tool and give them credit for it. Some of the other tools they describe are OK. I found them a bit confusing, especially the use of a six by six analysis matrix but they are obviously going to leverage their work to create a consulting business.

Why did I say this book was derivative? Although the book is packaged cleverly it does not represent much original thought. One reviewer mentioned that Christiansen's Innovators Dilemma is a better book. I totally agree. You would also see a lot of the Blue Ocean themes in Pralahad and Hamel's book, Competing for the Future. Lastly, I found the references to traditional strategy amusing, especially the knocks on Porter. I can't really tell if they've been following the evolution of Porter's thinking but I suspect they haven't. It's not all Red Ocean.

Is this a bad book? Certainly not. Is it worth buying? You could do worse. I would just read the authors HBR articles and save the money. Will you learn something? Probably. Are there better thought leaders in the field? Absolutely.
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148 of 166 people found the following review helpful
5.0 out of 5 stars "To strive, to seek, to find....", January 31, 2005
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
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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27 of 28 people found the following review helpful
3.0 out of 5 stars Great start but it gets weaker as it progesses, October 14, 2005
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
Blue Ocean Strategy is a good follow-up to Christensen's "The Innovator's Solution". Kim and Mauborgne pick up where Christensen leaves off in terms of how to "compete with non-competion". Their "strategy canvas" and "four actions framework" clarify many of the past business success stories we read about in business books. The book truely does offer a framework for those who are trying to create growth in highly competitive situations. I would recommend the book for those who spend time working on business growth.

The problem I have with the book is three-fold. First, all the meat is in the second chapter - "Analytical Tools and Frameworks". The rest of the book could be summarized as look broader, think big, don't do things out of order, and don't forget how hard it will be to implement change. All this is dressed up with a little too much consultant-speak for my taste (i.e. price corridors and the BOI index)

Secondly, the examples are not as well researched as I would expect. For instance, the [yellow tail] example is a great story, but the authors failed to mention that one of the key elements of the success of that Australian wine was that Casella Wines included a WJ Deutsch, a huge wine exporter, in the innovation (and profits) by setting up a 50/50 joint venture. Another example of missing key facts in a story is the NYPD Police Commisioner Bratton example in chapter #7. That story, laid out in less detail in Gladwell's "The Tipping Point", was later brought into question in "Freakonomics". Levitt and Dubner make a strong case that data show that the decrease in crime in the 90's in NYC was mostly due to simply adding more police officers. This hiring was done by Mayor Dinkins in response to the upcoming election against Gulliani, so Dinkins wouldn't get hit so hard on the "soft on crime" issue. The lack of thorough research left me wondering if the other examples were half-baked; leaving me wondering how thin the ice would get when I tried to implement some of the book's ideas.

Lastly, there is a bit of unsubstantiated world-view sprinkled throughout the book that the reader has to be careful about. Statements like "companies, like individuals, have a tough time translating thought into action..." (chapter 7) or "If individuals are not treated as though their knowledge is valued...they will hoard their best thinking and creative ideas...What's more they will reject others' intellectual worth as well..." (chapter #8)

Again, this is worth a read, but mostly for chapter #2.
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47 of 52 people found the following review helpful
1.0 out of 5 stars Trouble on the blue ocean, March 6, 2006
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
In the end this book fails to deliver usable business tools because of one huge flaw: It completely misrepresents the nature of innovation.

The problem is the role the book gives to innovation. When the Blue Ocean strategic process is outlined, only one point out of 10 mentions new ideas, saying "See which factors you should eliminate, create or change". In other words, one word ("create") in one sentence focuses on the actual process of creating new ideas - everything else is strategy. That's not the way it works.

This is typical of the way many businesses misunderstand creativity. There's a widespread illusion that innovation happens like this:
A manager somewhere notices an untapped business opportunity
He tasks someone with finding a way to tap that potential
Someone comes up with an idea that matches the opportunity
The idea is implemented

In real life, however, innovation usually happens like this:
Somebody, somewhere in the organizations has an idea - often totally unrelated to his actual job
He tries to interest others in it and is told to drop it
He perseveres and finally someone else agrees to try it out
The company suddenly discovers that it has a runaway hit on its hands

If you don't believe me, read this story of how post-its were invented at 3M ([...]). If ever there was a Blue Ocean product this is it, but the process was most definitely NOT as described in the Blue Ocean book.

It is my firm belief that few companies will be able to apply the tools in the Blue Ocean book to actually create ground-breaking innovation - even the cases cited in the book support this. A measured strategic approach like the one described here is fine for creating measured, incremental change, but if you really want to take your business into uncharted water, you will need a completely different approach to innovation.
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155 of 183 people found the following review helpful
1.0 out of 5 stars Buy this book for your competition!, August 9, 2006
By 
D. F SHAFER "don" (austin, tx United States) - See all my reviews
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
As opposed to many of the other reviewers we tried to use this process in a strategic marketing session with four teams in our company. THis was a frustrating and disappointing process! First, the book is a trite misrepresentation of an ex post facto process that has been dismissed by professional researchers and analysts. You do NOT prove your theory by fitting the past into your "model of the future". They did NOT work with Southwest Airlines to make them successful. They looked for examples that fit their thesis and applied it to ones they knew were succssful. This is not academically honest nor is it a good way to predict the future. It is like using Neural Networks to make predictions - they are 100% accurate in predicting the past.

Second, our team got to the point that we "believe" we found an underserved market area and we have three options and a full list of targeted areas for discussion. Now, how in the world can this book or anyone else on my team or in our company give me any insight into which one of these will be accepted by a prospect? This book promotes the worst form of pedantic navel gazing and raises self-reference to an absurd level. If we held the answer we would not need the strategic marketing exercise. Continuing this charade does us all a disservice. I worked with and managed product marketers for years in high tech companies who had companies like IBM and Intel as our customers. They did not do pencil whipping exercises. They went out and talked to prospects and asked them what they needed. This is not a novel approach but this Blue Ocean strategy seems to think that validation comes at the end after lots of silly charting and analysis.

This book will send you on a fools' errand. Buy it for your competition and hope that they follow it.
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18 of 18 people found the following review helpful
4.0 out of 5 stars Insightful, helpful but hard to implement, December 8, 2006
By 
Gary Wang (Shanghai, China) - See all my reviews
(REAL NAME)   
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
This popular book has been translated into most of the world's major languages including Chinese. In China, the Chinese translation edition has been on top of the business bestseller list for many weeks. You obviously feel the managers and entrepreneurs' hunger for winning strategies to stay in business in face of the cutthroat competition.

While the biggest strength of this book in my opinion is to give readers a conceptual framework to focus on new business opportunities when planning their business strategy, what the authors suggest is never to be taken as an immediate remedy. Most industries face tough competition, and managers and entrepreneurs are naturally inclined to look out of the window to see if they can spot a new route to sustained business growth. But let me tell you, developing new business through BD or R&D is so so hard and you know that only after you have exhausted lots of resources and have tried. I used to head a business unit of a leading American chemical firm in China and we tried hard to expand the market through aggressive BD initiatives committing resources as well as the headquarters support. We chose this new business strategy trying to convert business from not-in-the-kind competition to help us attain the 20% growth target. The challenge was huge with the fact that our market share had been very high, and the industry growth was only about 12%. All the efforts proved less helpful after 18 months because the ambitious conversion took far more time and resources than we had thought. We ended up giving up the strategy.

The lesson is that we can always choose to think big and long term, but a good strategy can never be based on pure reasoning or market research not thoroughly validated. A good strategy has to be based on the resources available (time, manpower, money, experience, alliances/relationships, and so on). Many new business initiatives failed because of lack of resources or a discipline to get the resources committed by the top. Or in other words, the strategy itself is basically flawed because the resource factor has not been placed on top of the strategy formulation.

Overall I recommend Blue Ocean Strategy as a useful framework. It helps you think out of the box while you're also looking at the cost and differentiation side of your competitive strategy.

Gary Wang
CEO
MindSpan Learning
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38 of 44 people found the following review helpful
2.0 out of 5 stars Different Name Same Game, May 4, 2006
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
I would not consider myself an astute strategist, but with the little reading and exposure to organizational strategy that I've done and been a part of over the past years, this book is nothing but a horse of another color.

This is a reiteration of work done by Michael Porter 25+ years ago. For an HBS book, I was incredibly disappointed. The authors use `fun' little metaphors with bloody oceans and smooth sailing blue waters and thus create a smoke and mirrors show to convince potential customers that they've developed a new unprecedented theory of business strategy. All they are doing is pedaling a differentiation strategy pioneered by Porter with an emphasis on innovation (one aspect of the differentiation set - e.g. branding, pricing, market niche).

If you've never read anything on competitive strategy, then it should be a fun read. If you have, don't waste your time. If you believe this is really a NEW strategy on which your organization can capitalize... then I've got a great deal on a bridge.
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26 of 29 people found the following review helpful
3.0 out of 5 stars Not entirely new!, June 14, 2006
By 
Leila (Michigan, USA) - See all my reviews
This review is from: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Hardcover)
For those of you interested I strongly recommend the article by the authors (Value Innovation: The Strategic Logic of High Growth, W. Chan Kim, Renee Mauborgne, HBR July 2004) which presented the same concept with fewer examples- it will save you time and money.

I do like the Value Innovation concept. But as the authors highlight you cannot create sustainable competitive advantage this way; the new "value-curve" can be copied easily by the competitors.

Also, the concept and framework are not entirely new; all of the examples presented in the book can be explained via the old and true concept of knowing your market/consumers' needs/wishes, and the trend of changes in your market/consumers' needs/wishes. If a firm is truly in-touch with their market/consumers, it can constantly create new sources of value, and change its value proposition as market changes.

The real problem is that firm do not stay in-touch, and that they often fall in love with their original value proposition. No new framework can change this problem. The only cure is financial troubles. Then, the firm keeps a new look at its market and consumers' needs/wishes, and when you reach this point you really don't need a new frawework. Although, the new framework might make the task of presenting your finding to management easier.
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