The creators of the Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne, were ranked number two in the Thinkers50 listing of the world's top management gurus in 2013 and 2011. In addition, they won the Thinkers 50 Strategy Award in 2011 and were shortlisted for the Global Solutions Award in the 2013 Distinguished Achievement Awards.
For companies big and small, fighting for market space is their biggest challenge. Finding strategic growth opportunities in uncontested market space is their holy grail.
No map has charted the way to such market spaces better than the Blue Ocean Strategy, now recognised as a global institution. But the INSEAD Blue Ocean Strategy Institute, situated in the distinguished, and imposing hotel particulier, now known as Le Cercle, surrounded by the lush forest of Fontainebleau just outside INSEAD, is more than just bricks and mortar.
Its core concept has become a doctrine, that like the institute commands admiration and respect the world over. Blue oceans represent all industries not in existence today. Red oceans represent all those currently in existence according to W. Chan Kim and Renée Mauborgne, Professors of Strategy at INSEAD and co-directors of the INSEAD Blue Ocean Strategy Institute.
In red oceans, sharks mercilessly compete for existing market space, try to beat the competition, exploit existing demand and make the value-cost trade-off. By adopting the Blue Ocean Strategy, companies create uncontested market space, make the competition irrelevant, create new demand and break the value-cost trade-off.
In 2007, when the institute was formed, Kim, the co-creator of the concept told INSEAD Knowledge that the Blue Ocean Strategy “looks at the entire value chain, a system-wide approach and the way of thinking, rather than talking about entrepreneurship or some sub-system of the entire organisation.”
It has since transformed management thinking. Stories abound of how it is being practiced in all corners of the planet.
The Nintendo Wii broke away from the mainstream video game market by reducing complexity and attracting those that weren’t traditional video gamers such as females and the elderly. The search for blue oceans continues apace. And not just in business.
Malaysia introduced a National Blue Ocean Strategy in 2009 to help the country achieve its goal of becoming an advanced nation by 2020. Over 80 ministries, including women and youth, education and domestic trade, agriculture and tourism are collaborating to form and execute Blue Ocean initiatives to rethink its economic model and transform its position.
In the American state of Louisiana, the Blue Ocean Strategy is cited as being a central tenet of its economic transformation. The state is aiming to create high growth opportunities in fields such as digital interactive media and advanced manufacturing. Since implementing a Blue Ocean Strategy in 2009, Louisiana is adding jobs at a faster rate than any other US state.
Kim and Mauborgne also have a word of warning to those who have found the blue ocean. “Even if a company manages to find a blue ocean with no competitors, it will need to be ‘almost like a moving target,’ Kim concluded. “You should never be a sitting duck because people will imitate you,” said Mauborgne.
Kim and Mauborgne argue that businesses should focus less on their competitors and more on alternatives; they should also focus less on customers, and more on potential new customers.
Their book, “Blue Ocean Strategy”, first published in 2005, has sold over 3.5 million copies and is being published in a record-breaking 43 languages.
W. Chan Kim and Renée Mauborgne, were ranked number two in the Thinkers50 listing of the world's top management gurus in 2013 and 2011. In addition, they won the Thinkers 50 Strategy Award in 2011 and were shortlisted for the Global Solutions Award in the 2013 Distinguished Achievement Awards.
W. Chan Kim is Professor of Strategy and International Management and The Boston Consulting Group Bruce D. Henderson Chaired Professor of International Management, as well as the Co-Director of the INSEAD Blue Ocean Strategy Institute