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I thought oceans were deep...
on January 11, 2006
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.