SAILING THE BLUE OCEAN
An Analysis of the Blue Ocean Strategy of W. Chan Kim and Renee Mauborgne
For the past five decades, competition was in the heart of any corporate strategy. In such
circumstances, red ocean strategy rules; a form of strategizing within a definite economic
structure, dictated by demand and availability of resources. As described by Kim and Mauborgne
Red Ocean represents all of the existing industries in a market place. Red ocean companies are
too numbers-driven. Red Ocean Strategist companies do lots of comparative industry analysis---
especially on the competition--- but that blinds them to the big picture. The focus on numbers
does produce some accountability . You develop numbers and then make somebody accountable
for them. But such approach keep companies in the red ocean because of the narrow focus on the
competition.
I think most companies know that strategic planning is an imperfect process. There are
certainly many books and articles criticizing red ocean strategy. But they have not had an
alternative to it, so companies have kept on using it because it does allow for some degree of
accountability.
Until, late 2000, after a decade-long study of 150 strategic moves spanning more than 30
industries over 100 years (1880-2000) a new strategy blossomed. Blue Ocean Strategy offer a
compelling alternative. The strategy is embodied in the book entitled “Blue Ocean Strategy” by
Professors W. Chan Kim and Renee Mauborgne and published by Harvard Business School
Press. In the book, “ Blue Ocean” refers to an untapped market, a market wherein there is only or
no competition at all enabling anyone to claim the market for his own since it is not yet too
crowded. In contrast, “ Red Ocean” refers to a market where competition is very high. The
market is considered as very crowded already since almost everybody is producing the same
type of service and the same kind of...