1-Sentence-Summary: Blue Ocean Strategy talks about a new type of business strategy that doesn’t necessarily rely on gaining a competitive advantage over your rivals, but on innovating your way out of the current market to create your own ocean of opportunities.
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Favorite quote from the author:
If we could describe today’s business world in one word, that word would be competitiveness. There are more businesses than ever before, and the world of start-ups shows no signs of slowing down. Technology allowed people to open up businesses with virtually zero costs, and so did social media.
Therefore, what’s left to do for any entrepreneur looking to start up their own company, scale up a business, or survive in the market? The answer may sound cliche, but it will make sense as we dive deep into the summary: to innovate.
Creating new and improved deliverables is the single best solution to implement in an oversaturated market. Instead of focusing on beating your competition, why not focus on creating new opportunities for yourself? Blue Ocean Strategy by W. Chan Kim might have just what you’re looking for if you’re looking to understand how to do so.
Here are three of the most relevant lessons from the book:
- A company must switch its focus from Red to Blue Oceans.
- The business canvas strategy allows you to define your company and focus on your core strengths.
- Making the competition seem irrelevant compared to your innovations is what the Blue Ocean strategy is all about.
Knowledge comes from repetition, so we’ll have to take each lesson in detail and tap into each one to get the most out of them.
Lesson 1: Instead of competing in a Red Ocean, learn to dive deep into the Blue Ocean.
The book brings forth two types of markets, namely the Red and Blue Oceans. The first type of market is the battlefield of businesses, the place where they practice their operational activities, look for new sources to gain their competitive advantage, and pull the rug from each other’s feet.
This market is slightly nerve-wracking, as it implies allocating many resources to fight rivals, find new ground to conquer, and always watching over your shoulder to see if others are doing the same. This is where small, medium, and large enterprises fight their battles and try to win over consumers.
The Blue Ocean is an entirely new, untapped territory where not a lot of companies end up operating. Why? Because ending up in the Blue Ocean implies that executives of the said company spend time innovating and creating new products or services that cannot compete with what’s already on the market.
In the Red Ocean, it is difficult to look for new sources of revenue and innovate. In the Blue Ocean, this is your primary focus. You take time off from the competition and focus solely on innovation. If you succeed, you’re likely going to win without even having to fight, and consumers will migrate towards the new trend set by you.
Lesson 2: Arriving at a Blue Ocean implies a strategy canvas that allows you to win the competition.
Every business will have to fight its battles in the Red Ocean, regardless of its industry. Competition is a natural part of every company’s environment and growth, but it’s up to its executives to come up with ways to tame it while focusing on innovation. In other words, you’ll need to swim in the Red Ocean till you reach the Blue one.
One way to do this is by applying the canvas suggested by the authors. This canvas consists of four essential questions to ask yourself before you jump into the Blue Ocean:
- Which of the factors that the industry takes for granted should be eliminated?
- Which factors should be reduced well below industry standard?
- Which factors should you raise above industry standard?
- Which factors should be created that have never been offered?
The first question tries to open up a space for companies to evaluate the services or products they offer that consumers don’t care about and that they should eliminate to grow margins and focus on innovation.
For example, low-cost airlines eliminated airport lounges and offered more flights, which in turn grew their figures and increased their support from consumers who wanted more frequent flights instead of better lounges.
The second question is similar, but it asks what you can focus on to be the best while reducing the focus on another aspect just enough to keep it going at the bare minimum. Be the best in your area, not in all areas. This takes us to the third question: what would that area be? Where are you more likely to succeed? Focus on that area. Finally, the fourth question is all about innovation, or the Blue Ocean.
Lesson 3: Jump into the Blue Ocean and make your competition seem irrelevant.
Reaching the Blue Ocean is a big step for every company, because not only will it assure your survival in the market, but also grow your enterprise successfully, at least for a brief time. Innovation is at the cornerstone of every business, industry, and advancement of a field.
Innovation is essential to improve our world. Moreover, consumers are always looking for better products and services, so whoever is the first to offer a newer, shinier, more spectacular invention is likely to grab the attention of the masses.
To start doing so you’ll have to invest many resources into R&D and switch your focus from your competition now, to your offerings in the future. Do so through value innovation, which is a concept that implies creating a leap in value for your consumers. When you do that you open new territory to explore for your buyers.
You can create added value by improving what you already have, which is great, but it won’t make your company stand out. The second way to improve your customers’ lives is to offer new, improved products. A strong company focuses on both approaches to win over its consumers.
Blue Ocean Strategy Review
Blue Ocean Strategy is a revolutionary piece of writing based on the idea that there is always a blue ocean around the traditional industry and business markets. The main concept presented is that you don’t have to match or beat your competitors, as there are always other industries waiting to be conquered.
This book is a great starting point for any small businesses seeking to understand how they should approach the market differently so as to win and create their own Blue Ocean.
Who would I recommend the Blue Ocean Strategy summary to?
The-55-year old CEO who wants to learn more about business strategy and how to create a new market in their well-established company, the 35-year-old start-up founder who wants to learn how to navigate the competitive field of business, or the 24-year-old MBA student who wants to learn hands-on knowledge about the business world.
Last Updated on October 6, 2022