My Aspire

Home About us Our services Contact us

Blue Ocean Strategy Application to Different Market Contexts

Strategy & Leadership: Many of the examples that you offer in the book relate to consumer products (entertainment, wine, personal communications, fitness clubs). Do the principles of blue ocean strategy apply with similar impact in business-to-business markets and can you give some examples?

Kim and Mauborgne: Blue ocean strategy is applicable across all types of industries from typical consumer product goods to b2b. For example, companies such as SAP, NetJets, EFS, Cisco, JCDecaux, Philips, and IBM all created blue oceans in b2b markets. Our research further suggests two interesting findings about businesses that are several steps removed from the final consumer. First, companies in these industries tend to view their businesses as commodity businesses with little room to offer innovative value. This has effectively created a self-fulfilling prophecy – the more these companies view their businesses as commodities, the more they treat their businesses as such. Secondly, we observed that the more removed that companies are from the final customer, the more levers there are to unlock innovative value because every company in that chain can be viewed as a customer. If a company can't see an opportunity to unlock innovative value for the next direct customer in that chain, there are still opportunities to unlock innovative value for that customer's customers.

Moreover, the principles of blue ocean strategy also have applicability to the national market context. A good example of this is the Value Innovation Action Tank (VIAT) of Singapore established in March 2004. VIAT is a non-profit organization with 15 Singaporean government ministries and agencies as founding partners. Its objective is to apply the ideas, frameworks, tools, and processes of value innovation and blue ocean strategy to the country's private, public and people sectors to enable Singapore to transit to the knowledge economy in an action-driven manner. More information on VIAT can be found at www.blueoceanstrategy.com

The Authors

Brian Leavy, Brian Leavy is AIB Professor of Strategic Management at Dublin City University Business School and a contributing editor of Strategy & Leadership.

Purpose – To study blue ocean strategy (value innovation management), which not only reframes the strategic challenge – from competing to making the competition irrelevant – but also provides a series of tools and frameworks to act on this insight in a way that maximizes the opportunity and minimizes the risk.

Design/methodology/approach – This interview with Professors W. Chan Kim and Renée Mauborgne considers the concept of value innovation management and examines the ideas and tools they developed in their book Blue Ocean Strategy (Harvard Business School Press, 2005), the product of a successful twenty-year research and consultancy partnership.

Findings – Blue ocean strategy is applicable across all types of industries from typical consumer product goods to b2b. It offers an alternative approach to the existing strategic planning process, one that is based not on preparing a spreadsheet document but on drawing a strategy canvas.

Research limitations/implications – The interview gives professors Kim and Mauborgne an opportunity to summarize many of their recent research findings.

Practical implications – As blue ocean strategy represents a significant departure from the status quo, managers typically face four hurdles to execution: first, cognitive: waking employees up to the need for a strategic shift; second, limited resources: the greater the shift in strategy, the greater the resources needed to execute it; third, motivation: inspire key players to move fast and tenaciously to carry out a break from the status quo; and fourth, organizational politics. Leaders must identify and effectively deal with internal opponents to change.

Originality/value – Provides a unique overview of value innovation management, its principles, tools, and techniques.