Customer Reviews: Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant
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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.
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on March 6, 2006
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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on December 2, 2012
This book was initially written in 2005 and enjoyed success. This is my first opportunity to read it. Based on what I have observed, I think I will place a 5-year moratorium on reading any new book on management or business practice; it is much easier to separate the B.S. from the peanut butter that way. Management has been around as long as societies have been around as a cursory reading of Genesis will attest. Let us call management the world's second oldest profession, the first being, of course, agriculture. (I hope you knew that.) Since human nature does not appear to have changed, I think that management books should be read with particular suspicion, and in the case of this book, deservedly so.

The central them of the book is that one should create new markets (blue ocean) rather than slugging it out in existing markets (the red ocean). But most of the book is tautology. For example, Kim and Mauborgne argue that one should use a "strategy canvas" to assess the competitive landscape. The strategy canvas is a central tool in Blue Ocean. It comprises a categorical abscissa on which are listed subjective customer benefits and an ordinate that measures the degree of achievement for each category. If that sounds too non-quantitative to be exceptionally useful, it is. How the authors can call this an analytic is beyond me. But my main objection is that the categories themselves are nebulous, useless, or worse -- leading to an errant conclusion. For example, let us revisit a case study the authors present regarding Cirque du Soleil.

What categories should we place on the horizontal axis? Well, before Cirque du Soleil existed, we may have placed items like ticket price, entertainment value, number of acts, quality of acts, act variety (animal, flying trapese, clown...) on our strategy canvas. Now scoring each of those, Ringling Bros. was the best game in town. The only problem was that customers didn't care about most of the items. The 3-ring circus was distracting, the animals were smelly (or viewed as evidence of cruelty), the high priced performers were unknown to the average customer, etc. The only reason most adults went to the circus was to take their children. With that kind of strategy canvas, I would have been tempted to offer free school bus rides to kids as a major innovation. Cirque du Soleil transformed the circus to an event for adults with no animals, a vague but central storyline, a theater-like experience, ethereal music, and beauty and artistry that celebrated human beings in motion. When Kim and Mauborgne placed those items on the strategy canvas, then Cirque du Soleil became the clear winner. But the analysis was done post hoc. No one knew that such items should even be scored until the Cirque du Soleil strategy became successful. Using an outcome to inform the question is question begging at its purest.

Another objection I have is that the categories are open to manipulation. Anyone who thinks that they will be able to use a strategy canvas to convince a refractory management to change their ways will just find themselves in an argument over what belongs on the category axis. In the end, the strongest proponents -- the very ones steering the ship into the nighttime ice -- will be the ones deciding what categories should be scored. And surprise, the status quo will win and be more justified than ever in staying the course.

What I have learned over the years is that customer value is subjective and that innovation comes from visionaries (not the customer). What one needs for success is for visionaries that know their markets and customers and are cogent and capable to persuade management to do the right thing. And no book is going to create a visionary. Visionaries are born, not made. To paraphrase Robert Mitchum, one might as well go to school to learn how to be tall. To find persuasive visionaries requires excellence in talent selection, because they need to come from the outside. That fault lies with the refractory organization, not its internal visionaries. Steve Jobs would have been fired from Apple long ago if he weren't their CEO. In fact, he was fired even though he was their CEO. But Apple wasn't worth anything without him. Visionaries see the world a different way so it takes a superlative management team (or desperate one) to embrace them.

Notwithstanding, the book finishes better than it starts with recommendations for how to navigate organizations to blue ocean in spite of themselves. To that end, Kim and Mauborgne have the following suggestions. Overcome the cognitive hurdle by exposing upper management to the pain of the customer through direct engagement. Mobilize a critical mass of resources by horsetrading with other leaders. Find the critical mass of managers ("kingpins") who will ally with you, and enlist their support early. Once you have enlisted support of key management, make measures visible to all ("fishbowl" management; I would call this aligning incentives.) As for executing the strategy, persuade downstream personnel using a "fair process" that openly engages employees, shows them why the new strategy is in their best interest, answers their questions, and resolves their fears.

These are contained in Chapters 7 and 8; and besides reading the Chapter 1 for context, these are the only chapters worth reading. Notwithstanding, they are too little too late. I cannot recommend the book.
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on August 9, 2006
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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on June 2, 2007
Much of the theories and methods described in the book have been covered in listless marketing books.

The line graphs that the argument is based on is based on an arbitrary positioning of the different factors along the chart. You can make any companies look like one that has opened up a so-called "blue ocean of uncontested market space" on the line graphs by simply moving the factors along the line.

Secondly, the survey / research cited never offers clear definition of key terminologies used, no clear explanation on how the research sample was chosen and no clear list of when or where that research actually took place.

It is a book that is written to wow readers with a pleasing visual image with contents that are recycled from past marketing books and arbitrary use of statistics that will not even hold on an academic level.

A total waste of money.
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on April 6, 2006
It is undeniable that if a firm has a sudden insight into an unmet consumer need, launching a product that meets the need, leads to above market returns. These are the sudden windfalls that businesses hope for, the much awaited christmas gift.

Most business deals with old products simply because innovation is difficult. The cost of innovation and the uncertainties that come with the innovating process, are usually prohibitive for all but the very best of ideas.

A series of ex post realizations - brilliant ideas from brilliant people - does not mean that such ideas are a dime a dozen and the very fabric of every day business. They are the rare out of the box thinking that got it right - the jackpot. Reality is that most of us are on the slot machines and winning a few bucks at a time.

Of course creating new businesses and working with new business ideas is important. Look at Google for the greatest example in building values through fresh perspectives. No company lives the "blue ocean" philosophy as much as Google. But at the end of the day, Google makes its money from search, the same way it has made its money since it became big in the nineties. They are yet to find another cash cow - their fundamental business strategy remains the same.

Thus the main point of the authors is moot - most business is about line extensions and current products and strategies, despite competitive realities not because firms would not like to find that wonderful blue ocean with a golden sun, but because they are unable to find a blue ocean every time their ocean becomes red. Great companies, on the contrary, make red oceans blue.
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on April 28, 2008
I read this book with much anticipation after some of the highly rated comments and the hype surrounding the text.

Quite a disappointment the book turned out to be. At many points of the book it was quite obvious that the authors are using flawed analytics to explain events post-hoc. The so-called strategic mapping can be so easily manipulated to give one company the desired shape as opposed to a see-saw pattern just by the ordering of the criteria on the X-axis!!! Many of the supposedly strategic "blue ocean"-creating differentiation values by the companies are by no means intentional or deliberate as the authors would liken them to be. And what of the decline of these blue ocean companies in the book in recent times? Are they suddenly in a bloody ocean in such a short span of time from the publication of the book?

Read with a fistful of salt...
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on November 19, 2007
Yes, it'd be useful if replication of past successes could ensure a glorious future. However, accomplished practioners know that this isn't the case! The authors have selected specific examples that serve their thesis and have repurposed valuable but somewhat dated concepts developed by Michael Porter and the Boston Consulting Group. Moreover, the Strategic Grid Technique, while a useful tool, seems a pale copy of QDF. In my opinion, there is neither academic breakthrough nor deep critical thinking here!
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on September 11, 2011
This book is typical of the people who submit business cases today expecting approval as a fait accompli. While the concept of blue ocean is sound it is also obvious (go places where no one else is and you can have super normal profits), true innovation is hard and economic rents harder still. Cirque de Soleil is faced with stiff competition and dell's world has been disrupted by the technology I am typing this review on (a XOOM tablet). I guess it depends on how you define sustainable. Ultimately though this book fails due to the fact that economic rents cannot be produced via a tick a box process as suggested. If they could then everybody would be generating them and therefore no one would be as they'd no longer be super normal.
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on February 9, 2006
The idea of finding so called "free open spaces" out of a non attractive industry was introduced by Harvard Professor Michael Porter in his book Competitive Advantage in 1985.
Chapter 7, Industry segmentation and competitive advantage, describes a powerful tool able to identify unexplored segments where the company can find a very favorable competitive structure. By combining on a two matrix variables the company's products features, the buyer's characteristics and the ways of distribution that can influence the company's competitive advantage and/or the industry structure and if you are good enough to elaborate on the content of these group of variables, as M. Porter suggests, it is possible to obtain a lot of feasible new markets combinations not already touched by competitors.
In Blue Ocean Strategy, the Authors suggest that new open spaces can be define by applying the following activities: look at alternative industries, look across strategic groups, look across the chain of buyers, look across complementary products and service offering, look across functional or emotional appeal to buyers and look across time. Now, all the new open spaces that are possible to be determined by the use of the above activities, can be easily determined by applying the industry segmentation tool provided by M. Porter.

Also, where is strategy in this book?
The book provides, or it would be better to say: it reformulates, a way of finding some opportunities (blue ocean markets), and then what? What should the company do in the new blue ocean? Don't you think some other companies would jump in immediately with a more powerful strategy to succeed? The Authors argue that the company should focus, diverge and have a compelling tag line; they say that in half a page. Is it all the strategy the company should do?
At least Michael Porter's industry segmentation tool is very well supported and related with 400 pages on how to do strategy and how to make it sustainable.

With great disappointing I found nothing new in this book, everything has been said already and in a more professional way. It is a book for strategy amateurs; in my opinion it could be helpful in the external analysis stage of the strategic planning process, where the company should explore for new opportunities.

What is the reason for its success?
In my opinion is the timing. The book has come out in a time where almost every industry is unattractive, overcrowded by competitors. Companies and consultants are desperate to find new solutions, opportunities. This book has come out on a perfect timing. On the other hand, M. Porter with his Industry Segmentation came out in the 80's when the pressure on the competitive forces was not as hard as it is today.

For those entrepreneurs interested in finding new open spaces not explored by competitors yet, I would suggest to read Competitive Advantage, Chapter 7. It has been extremely helpful to my company.
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