Dan’s Biz Bookshelf: Blue Ocean Classics

Reading time ( words)

“Blue Ocean” strategies are all about changing the game. The premise is that we all swim in red oceans doing everything the same as one another as if it were not permissible to do anything different. Blue Ocean strategies are game changers. Think Uber, GoPro, Airbnb, or SpaceX. In simple terms, Blue Ocean strategies are ways creative people find to change the entire marketplace they are in.

This book by W. Chan Kim and Renee Mauborgne has three classic Blue Ocean stories that represent the best in Blue Ocean thinking. The first story is about how Cirque du Soleil founder Guy Laliberte changed the circus industry. This industry was old, tired, and no longer sustainable. With issues and challenges from animal rights to very expensive performers to just being tired, the circus industry was tired; anyone who wanted to enter that market was thought to be crazy.

Instead of following the conventional logic of outpacing the competition by offering a better solution of a given problem—creating a circus with even greater fun and thrills—Cirque du Soleil redefined the problem itself by offering people the fun and thrill of the circus with the intellectual sophistication and artistic richness of the theater. With that they changed everything. They double their profits every year and are now the standard by which others must be compared.

Other examples include the way Amazon changed the e-reader market by combining its e-readers with thousands of books that could be instantly downloaded, or how Apple has outdone Microsoft with its steady offering of innovative and market disrupting new products. In fact, Steve Jobs’s greatest Blue Ocean strategy for music was not the iPod that could carry 1,000 songs in your pocket; it was the way that he convinced the music industry to let him have access to their music.

More than the stories, this book also outlines the key ingredients that make up true Blue Ocean strategies. To avoid being trapped in old markets, the authors emphasize:

  • Focus on attracting new customers
  • Worry less about segmentation
  • Understand that market creation is not synonymous with either technological innovation or creative destruction
  • Stop focusing on premium versus low-cost strategies

And one last take away from this book:

“The best way to drive profitable growth? Stop competing in overcrowded industries. In those oceans, companies try to outperform rivals to grab bigger slices of existing demand. As the space gets increasingly crowded, profit and growth prospects shrink. Products become commoditized. Ever-more intense competition turns the water bloody.”

With that being said, what else is there to say? This is a very valuable book to read and learn from.

Dan Beaulieu is president of D.B. Management Group. 

Blue_ocean.jpgBlue Ocean Classics

by W. Chan Kim and Renee Mauborgne

Published by Harvard Business School Publishing

Copyright 2019

Pages: 150

Price: $19.95



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