The last chapter of Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Harvard Business School Press), is dedicated to the topic of sustaining and renewing a Blue Ocean Strategy. Authors W. Chan Kim and Renée Mauborgne, seem to compromise the main premise of their book by suggesting a successful blue ocean strategy will invite competitors, thereby creating the red ocean they so virulently abhor. Which begs the obvious question – what happened to creating uncontested markets? When confronted with competition the authors counsel abandoning the blue ocean and innovating new blue oceans. Interestingly, nowhere in the final chapter do they suggest that after going through the process and investment of innovating a blue ocean that the enterprise might stay and aggressively defend that which it created.
Granted, the above can lead to a tedious debate over the definition and timing of sustainability, uncontested and irrelevant. However I will assume that Chan and Mauborgne intended these benefits to be more than fleeting opportunities especially since many of the case studies referenced in the book involved decades of advantage gained by early and mid-20th century enterprises implementing so-called blue ocean strategies.
For the adroit competitor keeping a list of those enterprises implementing a blue ocean strategy might be a lucrative exercise. Once the blue ocean enterprise has done all of the heavy lifting necessary to create a new market, they will be an easy target to attack and dislodge. As we have indicated in other posts the main issue we have with blue ocean folks is their assertion that you can make competition irrelevant in the 21st century.
The reality of any blue ocean strategy is that unlike the 20th century when business cycled at a much slower rate, in the 21st century, any productive blue ocean will quickly fill with competitors. Competition can not be avoided. So be prepared to compete. To engage in head-to-head competition always in search of sustained, profitable growth. You have to fight for competitive advantage, battle over market share, and struggle for differentiation.
Other recent posts we’ve made regarding Blue Ocean Strategy:
RED OR BLUE? WHAT COLOR IS YOUR MARKETING DEPARTMENT?
THE NEW YORK TIMES AND BLUE OCEAN STRATEGY
BLUE OCEAN: HOW TO CREATE UNCONTESTED MARKET SPACE AND MAKE THE COMPETITION IRRELEVANT
Download vSente’s Free Campaign Planner to learn more about how we help marketing managers battle larger competitors.
I’ve now read Blue Ocean Strategy twice, and have come away with the belief that many of the examples used in the book are not truly “blue ocean” as defined by the authors.
The most glaring example of this is the Cirque du Soliel case study. They do not “create a new market” as the book describes, but rather creating a new, compelling product for an existing market.
Cirque du Soliel does not compete with the traditional circus. People who go to the circus I would put into a marketplace of “family entertainment”. These are parents who take their families to things like the movies, arcades, Ice Capades, theme parks, family-themed theater (The Lion King on Broadway), etc. Cirque du Soliel is not a typical alternative for this marketplace — and therefor building the entire case study on a side-by-side comparison of traditional circus vs. Cirque du Soliel was distracting beyond measure and had me wondering if the authors realized how they diluted their own concepts.
The marketplace Cirque du Soliel does compete in is what I’ll call “adults who go out”. These are adults who attend the movies, theater, cabaret, concert events, cultural exhibits, etc. Using the concept of “circus for adults” , Cirque du Soliel simply created a compelling and unique alternative to meet existing demand — not create new demand. Simply put, a tourist to New York city might opt to attend Cirque du Soliel (if they are in town) over attending a Broadway show. Not true “blue ocean” as defined by the authors.