Authors define Blue oceans as unchartered territories where existing competition is made irrelevant. As we have read in marketing stories and acknowledged by authors too, the term “Blue Oceans” is new but not the existence of it. Every day new industries are born and new market segments are defined in the world. This is an outcome of a few companies striving to create a brand new value proposition in a crowded competitive space.
While the concept and existence are not new, the book does a good job of defining new strategic frameworks to achieve a viable blue ocean outcome. Authors hope these frameworks can help business people to redefine new market boundaries in a process oriented manner rather than as an accidental outcome.
My opinions of this book are mixed. While the definition and articulation of new frameworks is certainly helpful, on the whole it is an old wine in the new bottle.
Strategy Canvas and ERRC are two useful frameworks to analyze existing industry space and to define how new propositions can be evolved from it. Strategy Canvas defines customer defined value parameters on the X axis and a scale from Low-High on the Y Axis. You then need to plot yours and your competitors Value curves. The purpose of this framework is to slot all the parameters into ERRC grid.
The end result of using these two frameworks is that we can precisely identify value parameters that need to be eliminated, Reduced, Raised or Created from scratch.
The book identifies 6 paths around which a company should first attempt reconstruct the market boundaries. By reconstruct it means beyond our prevalent assumptions on market space
1. Look across alternative Industries: Try to understand the alternative choices available to customers across different industries compared to your industry offerings.
2. Look across strategic groups within industry: Look across different market segments within same industry and decide whether boundaries of market segments in your industry should remain as they are
3. Look across industry buyer groups: Look across different buyer groups in the industry across influences, users buyers and so on. Decide whether your offerings can be made more appealing to a different buyer group
4. Look across complimentary products and service offerings. This is nothing but the 6th competitive force defined in “Only The Paranoid Survive”
5. Rethink functional and emotional orientation of the industry. Can your products move from a pure utility based industry view to a one driven by emotional overtones.
6. Participate in shaping external industry trends over time rather than trying to adapt to them
Based on the market analysis along above parameters and after reconstruction of the market boundaries the book moves on to the next step of actual strategy definition.
The book recommends 4 steps for arriving at a final strategy plan for Blue Oceans.
1. Visual awakening : Understand where you are
2. Visual Exploration : Define where you want to be
3. Visual Strategy Fair : Draw your strategy to get there
4. Visual Communication : Tell your people what this strategy means to them
Until here is the best part of the book. It does a poor job on execution part as most of the content in these chapter is generic. It does not come out clearly how to derive an implementation plan and how to execute the process
In the end the case studies on how 3 different industries moved through phases of Blues oceans is worth going through.
On the whole,I suggest readers to focus on first few chapters and try to internalize the frameworks and strategy definition process. Rest of the book can be largely ignored.