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Strategy & Leadership:
You offer a number of formulation principles to guide business leaders
in crafting their own blue ocean strategies. The first concerns
reconstructing market boundaries. Can you explain what you mean by this
and how a business leader might go about it?
Kim and Mauborgne:
Blue ocean strategies reconstruct market boundaries, thereby freeing
companies from head-to-head competition and instead opening new market
space to achieve a leap in value for both buyers and for themselves.
Identifying a potentially successful strategic move does not require any
special capacities, vision or foresight about the future. All new
insights come through looking at familiar data from a new perspective.
How is this undertaken? To break out of red oceans, companies must
breach the accepted boundaries that define how they compete. Instead of
looking within these boundaries, managers need to look systematically
across them to create blue oceans. We have found that most managers bind
their strategic vision within six boundaries of competition. These are:
industry, strategic group, buyer group, complementary product and
service offerings, the functional-emotional orientation of their
industry, and within a given period of time. Yet, we've found if they
switch their focus from looking within to looking across these six
boundaries of competition, they gain keen insight into how to
reconstruct market realities to open up blue oceans. In the book we
introduce a tool called the Six Paths Framework to help in
systematically reconstructing market realities across the six boundaries
of competition (see
Figure 4).
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