This book was published in 2005 and became an international bestseller. All Management consultants and MBA students were expected to read this. I laid my hands on this book a couple of times. But somehow it did not pike my interest.
Having failed to read it couple of times, this book was like a challenge to me and I decided to polish it off this time around as part of my 2016 reading challenge.
Blue ocean strategy is about developing new markets or expanding the boundaries. It is in contrast with a Red Ocean, which means compete in a blood bath in a limited size old market. The book not only gives numerous examples of companies or organizations that followed the Blue ocean strategy, but also gives a theoretical framework to evaluate and pursue the same.
Some of the key learning were:
· Value innovation
· Four Action Framework
· Strategy Canvas
· Formulating Blue Ocean Strategy
· Executing Blue Ocean Strategy
Value innovation is any action that favorably affects both a company’s cost structure and its value proposition to the buyer.
Four Action Framework is used for increasing buyer value. It could be by Eliminating something from the product or service, Reduce something, Raise something or Create something new in your product/service offering.
Strategy Canvas is a pictorial representation of an organization’s strategy plotted against various factors that affect the offering. A competitor can also be plotted on the same canvas and it can show where there is a differentiation. I felt though the concept was good, the actual plotting of the measures against factors could be subjective!
The part on Formulating Blue Ocean Strategy was quite interesting. There are lots of new concepts to be learnt. This is about reconstructing Market Boundary. This basically means to expand the boundary of your market. This can be achieved by looking at alternative industries and their scope, at strategic groups within industry, across chains of buyers, across complementary product and service offering, across functional or emotional appeal to buyers, and across time.
Then the authors describe how to draw the strategy canvas through visual awakening, visual exploration, visual strategy fair and visual communication. How to draw the PMS (Pioneer-Motivator-Settler) map. Pioneers are companies with largest market share. Motivators are companies trying to break out from settlers to become pioneers. Settlers are me too, also ran variety of companies. Some global gyan!
The last part of the book, Executing Blue Ocean Strategy, is more about organizational change management techniques on how to implement the new strategy. It talks about overcoming the organizational hurdles like resource crunch, unmotivated staff, cognitive shutdown and political hurdles. The authors give techniques to overcome each. For example, to overcome political hurdles, the author recommends to ‘leverage your Angels and silence your devils’.
Finally the authors give examples from contemporary industries that have knowingly or unknowingly used the principles of Blue Ocean to survive.
My verdict: This book is a very good combination of strategy and practice (examples). But Unless you are top management or a management consultant, this book may not really be very useful in your day-to-day work.