Leg 10. From Cardiff to Gothenburg (I). The Blue Ocean Strategy
Hope you are doing well. It is the 5th of June (Just one day before my birthday), and we are going to start the theme “The Blue Ocean Strategy“, previously to the start date of Leg 10. As formerly announced, we must start to sail before the rest of the teams, because this topic is extensive. Next Leg 10 from Cardiff to Gothenburg will take in between 4 to 5 days at sea (just 1,300 nm). In consequence, we have to start beforehand. Of course, it is not cheating at all, but our aim is to offer a better scope of our themes.
Let´s sail into “The Blue Ocean Strategy”. The Blue Ocean Strategy was born into our business map with the appearance of an article written by W. Chan Kim and Renée Mauborgne in the Harvard Business Review Magazine of October 2004. Professor W. Chan Kim is a Korean-born business theorist, and he is the BCG Bruce D. Henderson Chair Professor of International Management at INSEAD. Doctor Renée Mauborgne is a Distinguished Fellow and Professor of Strategy and International Management at INSEAD. Both are co-directors of the INSEAD Blue Ocean Strategy Institute in Fontainebleau, France. The Blue Ocean Strategy is nothing else than a value innovation strategy. In the authors´ words, “Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. Instead of dividing up existing – and often shrinking – demand and benchmarking competition, blue ocean strategy is about growing demand and breaking away from the competition.”
During the next publications, until we arrive in Gothenburg, Sweden; we will drill into the Blue Ocean Strategy main aspects. We have prepared the following outline and Introduction slides for you today, and we hope you will like the content of it. Please read the slides. It is the preliminary information about the theme.
If you wish to download the slides in PDF format, please do not hesitate to click here: Eliescalante Leg 9 The Blue Ocean Strategy Introduction.
Kim & Mauborgne published the first book “The Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant’” in the year 2005. This book was an answer to the cannibalization of profits, due to increasing level of competition that the corporations have experienced. The publication of Kim & Mauborgne book came three years before the global financial crisis, and many companies were worried about how their respective industries were not protected from competitive moves of other market participants. The research conducted by Kim and Mauborgne focuses on a ‘thinking outside the box’ approach and reveals that in present increasingly competitive environment, real winners are those corporations that make competition irrelevant (neither here nor there) by creating a new untapped market space. This new market space is called a blue ocean, thereby creating demand for their new products and services.
According to the authors, blue oceans represent all the industries which are not in existence in present times – the unknown market space, where there are no rivals. In blue oceans, rules of the game are unknown and demand is created rather than battling over unlike in red oceans where the industry boundaries are well defined and the competitive rules of the game are known. In red oceans, businesses try to surpass their competitors to grasp a greater market share. As the number of player increases, projected profits and growth diminishes. In such industries, products become commodities, and ruthless competition turns the red ocean bloody. The Authors have recently published a new book “Blue Ocean Shift”.
Our idea is to bring a “value-added” content to our journey to Gothenburg. We won´t publish to teach you how to apply Kim-Mauborgne blue ocean methodology analysis but to cause you to think about the fundamentals of their theory. We also wish to understand how the Blue Ocean Strategy is delivering solutions for the future context of Industry 4.0 and the challenges of it. In addition, we hope you can enjoy the complete outline:
On our next post, we will continue with the subject “Blue Ocean Strategy Insights”.
San Salvador – 15:17 pm
Disclaimer: All the presentation slides shown on this blog are prepared by Eleonora Escalante MBA-MEng. Nevertheless, all the pictures or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated.
Leave a Reply