Project and content management for Contemporary Authors volumes
WORK TITLE: Blue Ocean Shift
WORK NOTES: with W. Chan Kim
PSEUDONYM(S):
BIRTHDATE:
WEBSITE:
CITY: New York
STATE: NY
COUNTRY:
NATIONALITY: American
https://www.blueoceanstrategy.com/ * https://www.insead.edu/faculty-research/faculty/renee-mauborgne * https://www.blueoceanstrategy.com/about-the-authors/ * http://fortune.com/2017/09/25/blue-ocean-shift-kim-mauborgne/
RESEARCHER NOTES: Blue ocean is also printed in an “expanded edition”; was not sure how to put in biocrit so gave it its own box.–DP Fixed it.–AC
PERSONAL
Male.
EDUCATION:Studied at the University of Michigan.
ADDRESS
CAREER
Business strategist, educator, and writer. Taught at the University of Michigan Ross School of Business, Ann Arbor; then INSEAD, Fontainebleau, France, distinguished fellow, professor of strategy, and codirector of INSEAD Blue Ocean Strategy Institute; cofounder of Blue Ocean Global Network. Work related activities include serving on President Barack Obama’s Board of Advisors on Historically Black Colleges and Universities (HBCUs) for the President’s two terms; fellow of the World Economic Forum.
AWARDS:Asia Brand Leadership Award, 2007; Nobels Colloquia Prize for Leadership on Business and Economic Thinking, 2008; Prix DCF 2009 (Prix des Dirigeants Commerciaux de France 2009) in the category of “Stratégie d’entreprise”; Thinkers50 Strategy Award, 2011; Carl S. Sloane Award for Excellence (co-winner), the Association of Management Consulting Firms, 2014; the Eldridge Haynes Prize, the Academy of International Business ; the Eldridge Haynes Memorial Trust of Business International, for the best original paper in the field of international business.
WRITINGS
Contributor to periodicals, including Harvard Business Review, the Academy of Management Journal, Management Science, Organization Science, Strategic Management Journal, Administrative Science Quarterly, Journal of International Business Studies, MIT Sloan Management Review, the Wall Street Journal, the New York Times, and the Financial Times. Blue Ocean Strategy also printed in Chinese.
SIDELIGHTS
Renée Mauborgne is a business strategist and management expert who was ranked as one of the top three management gurus in the world in the Thinkrs50 listing of the World’s Top Management Gurus. Mauborgne is also cofounder with W. Chan Kim of the Blue Ocean Global Network (BOGN), a global community of practice on the “blue ocean” family of concepts relating to how companies can innovate and create new demand. In addition to writing about their business concepts for business journals and periodicals, Mauborgne and Kim are coauthors of books focusing on blue ocean concepts.
Blue Ocean Strategy
In their first book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, Mauborgne and Kim move from traditional thinking about business strategy to provide an innovative concept designed to create new kinds of market space that thrive despite the competition. The book grew out of the authors’ study of more than 150 strategic moves spanning more than thirty industries over approximately 15 years. “In fact, blue ocean strategic moves have taken place throughout the history of industry evolution,” Kim noted in an a Fast Company website interview with Kevin Ohannessian, adding: “What our research focused on was uncovering and decoding the underlying pattern behind these strategic moves.”
According to the authors, their research shows that there are common patterns behind the creation and capturing of blue oceans, that is, untapped new markets that are ripe for growth. In their book Blue Ocean Strategy, Mauborgne and Kim discuss the theory, tools, and frameworks that are the basis for their strategy. They then discuss how to use this strategy in a systematic way to open up new market space, pointing out the strategies they propose are applicable to companies, organizations and governments. “It is more imperative than ever for companies to move from red oceans of bloody competition to blue oceans of profitable growth,” Mauborgne told Ohannessian for the Fast Company website interview, pointing out that the global economy and marketplace has intensified competition while also showing “little evidence of any increase in demand in developed markets.” The book’s final section focuses on how to execute Blue Ocean Strategy, including overcoming key organizational hurdles.
“Through the book, the authors explain that innovation must expand a company beyond the current confines of its industry,” wrote Patrick Buckley and Robert Colman in CMA Management, adding: “Rather than fighting for market share, companies have to create new market space.” Commenting on the expanded edition of the book published in 2015, Willis M. Buhle, writing in Reviewer’s Bookwatch, remarked: “Exceptionally well written, organized and presented, this new edition is a ‘must’ for anyone involved in any aspect of business management.”
Blue Ocean Shift
In their next book, Blue Ocean Shift: Beyond Competing: Proven Steps to Inspire Confidence and Seize New Growth, Mauborgne and Kim draw on a decade of new research to further show how to move beyond competing. They also address how to inspire confidence in employees. The author discuss all-new reaserch and provide new examples of how leaders in various industries and organizations helped to create a shift not only in leadership but also in the entire team to foster confidence. Mauborgne and Kim provide information on how to apply the process and the tools needed. For example, they discuss how leaders need to identify fundamental assumptions about the operation of their business or organizations and then how to challenge these assumptions.
Throughout the book, examples are given of how nonprofits, businesses, and governments have used their “blue ocean” strategies. They also explore the lessons learned from those who both succeeded and failed in applying these strategies. Real-life examples range from the the National Youth Orchestra of Iraq to Groupe SEB, a French appliance maker. “This invaluable guide will be empowering to business-minded readers,” noted a Publishers Weekly contributor. Epoch Times Online contributor Barbara Danza remarked: “‘Shift,’ while lacking the groundbreaking nature of its predecessor, goes deeper, providing a thorough review of the original blue ocean philosophy and then shifts to the application of the strategy,” adding that this is the area where the “book shines.”
BIOCRIT
PERIODICALS
Behavioral Healthcare, February, 2006, Terry L. Stawar, “Diving into a ‘Blue Ocean Strategy’: In a Tight Industry, It Can Be Sink or Swim for Providers, but a New Business Strategy Offers a Lifeline, and Maybe Even New Service Anchors,” p. 17.
CMA Management, March, 2005, Patrick Buckley and Robert Colman, review of Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, p. 6.
Inc., March 1, 2005, Darren Dahl, “The Best Market for Your Product Probably Doesn’t Exist Yet, Says a New Book, Blue Ocean Strategy.”
Publishers Weekly, June 19, 2017, review of Blue Ocean Shift: Beyond Competing: Proven Steps to Inspire Confidence and Seize New Growth. p. 101.
Reviewer’s Bookwatch, May, 2015, Willis M. Buhle, review of Blue Ocean Strategy.
ONLINE
Blue Ocean Strategy website, https://www.blueoceanstrategy.com/ (April 13, 2018).
Campaign, https://www.campaignlive.co.uk/ (September 06, 2016), Jim Lewcock, review of Blue Ocean Strategy.
Epoch Times Online, https://www.theepochtimes.com/ (March 17, 2018 ), Barbara Danza, review of Blue Ocean Shift.
Forbes Online, https://www.forbes.com/ (September 26, 2017), Dan Schawbel, “The Little Black Book of Billionaire Secrets: Chan Kim and Renée Mauborgne: How to Shift from a Red to A Blue Ocean.”
GlobalEd, https://globaleduc.wordpress.com/ (August 27, 2012 ), review of Blue Ocean Strategy.
Fast Company, https://www.fastcompany.com/ (July 28, 2011), Kevin Ohannesian, “Leadership Hall of Fame: W. Chan Kim and Renée Mauborgne, Authors of “Blue Ocean Strategy.”
INSEAD Blue Ocean Strategy Institute website, https://www.insead.edu/ (April 13, 2018), author faculty profile.
Push! website, http://pushbusinesstraining.com/ (May 22, 2015 ), Alison Vidotto, review of Blue Ocean Strategy.
Speakers Associates Website, https://www.speakersassociates.com/ (April 13, 2018), author profile.
Speakers Corner Website, https://www.speakerscorner.co.uk/ (April 13, 2018), author profile.
Strategy+Business Online, https://www.strategy-business.com/ (January 12, 2002), “W. Chan Kim and Renée Mauborgne: The Thought Leader Interview.”
Renée Mauborgne is the Co-Director of the INSEAD Blue Ocean Strategy Institute and The INSEAD Distinguished Fellow and a professor of strategy at INSEAD. Mauborgne served on President Barack Obama’s Board of Advisors on Historically Black Colleges and Universities (HBCUs) for the President’s two terms. She is also a Fellow of the World Economic Forum. Her book Blue Ocean Strategy, co-authored with W. Chan Kim, has sold 3.6 million copies and is a bestseller across 5 continents.
Mauborgne is ranked in the top 3 management gurus in the world in the Thinkers50 listing of the World’s Top Management Gurus. She is the highest placed woman ever on Thinkers50. She was named among the world's top 5 best business school professors in 2013 by MBA Rankings. Mauborgne received the Nobels Colloquia Prize for Leadership on Business and Economic Thinking 2008.
To learn more, visit www.blueoceanstrategy.com.
RENEE MAUBORGNE
A highly influential business thinker, Renee Mauborgne is the co-creator of the phenomenally successful Blue Ocean Strategy - a business theory and best-selling book which has given rise to academic research centres all over the world.
Renee Mauborgne is an American now based in France where she is an INSEAD Distinguished Fellow of Strategy and International Management and an Affiliate Professor of Strategy. She arrived at INSEAD with her research partner W. Chan Kim after both had studied and taught at the University of Michigan Business School. Together they direct the INSEAD Blue Ocean Strategy Institute.
About Renee Mauborgne
Awards, Accolades, Achievements, Honours
Winner of the 2011 Thinkers 50 Strategy Award (for Blue Ocean Strategy.)
No 2 on the Thinkers 50 list of management gurus 2011 - the highest ranked woman ever.
Career
Their research into the way companies innovate and create new demand exploded onto the business scene in book form in 2005 as Blue Ocean Strategy. It was an instant success - the fastest selling book in the history of the Harvard Business School Press and a bestseller across 5 continents which has been translated into 41 languages.
Their theory of value innovation has helped to explain the success of many highly successful companies and is now taught to students and executives at Blue Ocean Strategy institutes around the world. Blue Ocean Strategy is the creation of high profit, low cost innovations in an uncontested market space as opposed to the bloody Red Ocean of competition for customers in an existing industry and a crowded market place.
Her articles on Value Innovation and Fair Process, written with W. Chan Kim for the Harvard Business Review, have been selected as among the best classic articles ever published and many more have appeared in The Wall Street Journal, The New York Times and The Financial Times.
She contributes to many academic journals including The Journal of International Business Studies, Sloan Management Review, Academy of Management Journal et al
Renee Mauborgne is a Fellow of the World Economic Forum at Davos and a member of President Barack Obamas Board of Advisors on Historically Black Colleges and Universities (HBCUs).
Current/Past Roles and Positions
Awards for Blue Ocean Strategy
Best Business Book of 2005 at the Frankfurt Book Fair
Top Ten Business Book of 2005 by Amazon.com.
Number 1 Strategy Book of 2005 by Strategy+Business magazine
Awards for Renee Mauborgne
Winner 2007 Asia Brand Leadership Award.
Nobels Colloquia Prize for Leadership on Business and Economic Thinking 2008
Winner of the Eldridge Haynes Prize for the best original paper in the field of international business.
Selected for the 2011 Leadership Hall of Fame by FastCompany magazine.
Speaking Style
Renee Mauborgne is an intelligent and engaging speaker with a passion to explain how companies like Cirque Du Soleil invent and re-invent their markets to become today's outstanding winners.
07.28.11
Leadership Hall Of Fame: W. Chan Kim And Renée Mauborgne, Authors Of “Blue Ocean Strategy”
We continue our examination of the business book Blue Ocean Strategy with an interview of authors W. Chan Kim And Renée Mauborgne. We explore their motivation for writing the book, and why more companies are using their strategies.
BY KEVIN OHANNESSIAN7 MINUTE READ
W. Chan Kim and Renee MauborgneWhat was the impetus for you two to write Blue Ocean Strategy?
W. Chan Kim: As we look back at the last 100 years of business history, companies from diverse industries have repeatedly broken away from the competition to create new market space with tremendous growth and profit opportunities. Yet, no theory existed to explain such strategic moves or to provide a systematic approach to reproduce such successes. Innovation was often viewed as a “black box,” a result of entrepreneurial instinct, or the chance result of numerous trial and error experiments. The result: Strategy research over the last 25 years focused not on how to create these blue oceans of new market space, but rather on how to out-compete rivals in existing industries. Under this view of strategy, industry structure is seen as given and the best a company can do is to maximize its share of existing demand.
Blue Ocean Strategy was born out of the question, “Is there a pattern to the creation and capturing of uncontested market space? And if so what is it?” To answer these questions we studied more than 150 strategic moves spanning more than thirty industries over some fifteen years. Our research revealed that there are indeed common patterns behind the creation and capturing of blue oceans. Blue Ocean Strategy is the articulation of the theory, tools, and frameworks behind those patterns. It offers a systematic way to open up new market space that companies, organizations, and governments can all apply.
Why do you think the book was so successful and resonated with the business world?
Renée Mauborgne: Our book answered the research questions we had studied for decades–Is there any common pattern behind how to break away from the competition and create new demand and strong profitable growth? And what is the methodology for systematically pursuing blue oceans of uncontested market space? We believe these are also the questions that every company needs to ask as they try to survive the intense competition of the real business world. These questions have become more acute than ever in recent years. Developments such as globalization of production and exchange of goods, world-wide flow of information and capital, as well as accelerated technological advancement have improved industrial productivity, permitting suppliers to produce an unprecedented array of products and services while removing niche markets and monopoly havens, making competition in the global market increasingly intense. At the same time, there is little evidence of any increase in demand in developed markets. In more and more industries, supply is outstripping demand, resulting in hastened commoditization of products and services, intensified price wars, and shrinking profit margins. It is more imperative than ever for companies to move from red oceans of bloody competition to blue oceans of profitable growth. This, we believe, underlies the success of this book and its popularity among the business communities.
In the years since the book’s release, do you feel more companies are using a blue ocean approach?
Kim: In fact, blue ocean strategic moves have taken place throughout the history of industry evolution. What our research focused on was uncovering and decoding the underlying pattern behind these strategic moves. Of course, with the publication of Blue Ocean Strategy, this approach is systematically laid out to business practitioners so that they have a roadmap, tools and frameworks to create blue oceans in an opportunity maximizing, risk minimizing way. The objective is to make the formulation and execution of blue ocean strategy as systematic and actionable as competing in the red oceans of existing market space. The response from enterprises has been incredibly powerful. If you visit our website on the front page there is an ever-changing list of articles on companies, non-profits, and even governments pursuing blue ocean strategy and the results they are obtaining. We would invite any of Fast Company‘s interested readers to visit the site to see the rich array of applications in organizations. Currently, for example, there are a number of articles on the front page on how the Malaysian government is applying blue ocean strategy.
Blue Ocean StrategyWhich companies today are good examples for succeeding with blue ocean strategies?
Mauborgne: Again, we refer to the front page of our website www.blueoceanstrategy.com so that they can see and read about what the global press is reporting on this topic. This cover blue ocean strategic moves being made across the globe in corporations, nonprofits, governments and education. There is also a link on the website to all back articles in the press, which highlights numerous applications of blue ocean strategy in diverse settings scattered across the five continents. More than that, however, we are now documenting how organizations–both big and small–have been applying the ideas, the challenges they have faced, the key insights they have gained, and the results they are generating. We look forward to releasing this in our next book.
How has your writing process changed between working on Blue Ocean and now?
Mauborgne: The writing process has remained the same in the sense that as business scholars, we always begin with empirical research. We believe that any conclusion we draw from inductive research should be based on solid methodological design. To this end, we have been spending the last five years further building our global database, developing and refining our hypotheses, comparing and contrasting different units of observations in comparable contexts to identify which key factors or mechanisms account for the success or failure of a business move when other conditions are properly controlled for. We then set out to record our findings and further explain them in our writings. The main difference since the publication of the book, if any, is that before we summarized and integrated our findings in the book, we had written a series of articles, each tackling one key dimension of what we called blue ocean strategy. The writing process was therefore one of progressing towards an integrated theory. After the publication of the book, we have been devoting more attention to testing our integrated theory in new real-life settings. With inputs and feedback about the processes and results of blue ocean creation in practice from companies and other organizations around the globe, we reevaluate our theory and framework and further refine them in our writings. Our aim, however, has been unwavering: to address an issue that has central importance to economic growth and prosperity and that is based on research that is as much empirically/theoretically grounded as it is managerially applicable and actionable in practice.
What makes a good business book stand out from all the others?
Kim: First of all, a good business book should correctly identify and address the critical questions that the business world is concerned about. Secondly, it should not only offer clear and credible explanations about business phenomena, but also offer practical and actionable frameworks and tools for business practitioners to adopt in order to improve their performance results. Thirdly, what the book offers should have lasting relevance for the business world. This requires the author(s) to uncover the underlying and fundamental patterns behind business successes or failures, rather than follow the fad and fashion of the time and come up with only skin-deep analyses.
What are your three favorite business books, and why?
Mauborgne: We would like to mention two works that have impacted our research and thinking process and inspired us. One is Thomas Kuhn’s The Structure of Scientific Revolutions, which has influenced our professional outlook and attitude towards scientific research. His work inspired us to always ask if what we are studying is a big issue that can have a transformative impact in life and in business, and not just an academic question of marginal real-life significance. Kuhn’s work also drove home the need to have an independent point of view on an issue and not assume that just because the research world says to date that something must be, to accept that conclusion without question. Joseph Schumpeter’s works on entrepreneurship and innovation also inspired us with his intellectual inquiry about structural change. However, while Schumpeter focused on “creative destruction” brought about by random innovations, we have been searching for a systematic approach of value innovation to make the pursuit of structural change systematic and reproducible.
W. Chan Kim and Renée Mauborgne are the authors of Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Kim and Mauborgne are professors of strategy and co-directors of the INSEAD Blue Ocean Strategy Institute based in Fontainebleau, France.
Renée Mauborgne
Renée Mauborgne Contact Us Add to wishlist
A distinguished Fellow and a Professor of Strategy and Management at INSEAD (France), Renée Mauborgne is an engaging, intelligent and energetic keynote speaker on strategy, innovation and wealth creation. Her presentations and best-selling publications, including her multi-award winning book Blue Ocean Strategy, are changing the business lexicon across the globe.
BusinessFinance & EconomicsInnovationKeynote SpeakersLeadership
Renée Mauborgne is an impressive keynote speaker. Engaging, intelligent and energetic, she has substantive material that can make a real difference to your organisation. Renée is a thought leader on business strategy, innovation and wealth creation. Her multi-award winning book, Blue Ocean Strategy, details her breakthrough in strategic business thinking, her prominent work has shaped business thinking in countless influential sources.
Renée is a distinguished Fellow and a Professor of Strategy and Management at INSEAD, France, one of the world’s largest business schools.
Renée is a fellow of the World Economic Forum. Her Harvard Business Review articles, co-authored with W. Chan Kim, are worldwide bestsellers and have sold in their millions. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review. They have co-authored articles in The Wall Street Journal, The Wall Street Journal Europe, The New York Times, The Financial Times and numerous journals.
Renée has published numerous articles on strategy and managing the multinational, which has been published in countless reputable sources including the Academy of Management Journal, Management Science, Organization Science, Strategic Management Journal, Administrative Science Quarterly, Journal of International Business Studies, Harvard Business Review, Sloan Management Review and others.
She is the co-author of Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. An international bestseller, translated into countless languages, Renee’s work is considered seminal in the field.
After being selected as among the top five most influential business thinkers in the world in 2009, Renee was ranked No. 2 on the Thinkers50 2013 list as well as Thinkers50 2011 lists of the world’s top management gurus. She also won the 2011 Thinkers50 Strategy Award for her research on blue ocean strategy.Renee was selected for the 2011 Leadership Hall of Fame by FastCompany magazine and as one of the World’s 50 Best Business School Professors in 2012 by Fortune.com.
She received the Noble Colloquia Prize for Leadership on Business and Economic Thinking in 2008 and is the winner of the Eldridge Haynes Prize, awarded by the Academy of International Business and the Eldridge Haynes Memorial Trust of Business International, or the best original paper in the field of international business. She is the winner of the Prix DCF 2009 in the category of “Stratégie d’entreprise.”
Renee founded the Blue Ocean Global Network, a community which is based on the values founded in Renee’s book, the initiative brings together academics, consultants and government officials.
A leader in her field, Renee can adeptly speak on strategy, management and innovation in the business world.
For further information or to book Renee Mauborgne for a corporate event, call us on +44 (0)20 7607 7070 or email info@speakerscorner.co.uk
January 12, 2002 / First Quarter 2002 / Issue 26 (originally published by Booz & Company)
THOUGHT LEADERS
W. Chan Kim and Renée Mauborgne: The Thought Leader Interview
INSEAD’s strategy scholars parse the line between value and innovation.
by Stuart Crainer
W. Chan Kim and Renée Mauborgne
Photography by Wendy Lamm
Walking through Barbizon, the northern French village des peintres, home of the 19th-century painter Jean-François Millet, Professor W. Chan Kim makes an expansive gesture: “This place is a creative hub,” he says, smiling broadly, as he watches another pack of tourists disembarking from a bus.
Silicon Valley it isn’t. At least, not yet. But Professor Chan and his INSEAD colleague, Professor Renée Mauborgne, believe that their newly created Value Innovation Institute may change the perception of the region to one of a global center for the study of the linkage between innovation and commerce. The institute, he explains, will locate managers from diverse global companies to work on cross-industry and cross-company projects that connect innovative ideas to large commercial opportunities.
Professor Kim, the Boston Consulting Group Bruce D. Henderson Chair Professor of International Management at INSEAD, and his research partner, Professor Mauborgne, the INSEAD Distinguished Fellow and Affiliate Professor of Strategy and Management, are particularly associated with the concepts of “value innovation” and “market space.” They see value innovation as the ability to challenge assumptions about strategy and to make the competition irrelevant rather than competing on established ground. Their theory of value innovation helps explain the success of many high-growth companies. Market space is the process by which companies can create new demand. It challenges companies to create new markets rather than being preoccupied with those in which they already operate.
The concepts have emerged from the colleagues’ cross-industry research over the past decade, which has sought to identify patterns in the way companies create value from innovation, invent new markets, and reinvent existing ones.
“We started off by looking at the companies that succeeded in circumventing the competition,” explains Professor Kim. “Then we moved on to how to create new market space — companies need a way to think and act out of the box if they are to circumvent the competition. Our notion of ‘fair process’ looks at management decision making and what is required to build and execute creative thinking. Most recently we have looked at how to identify a winning business idea and determine which one to bet on. Qualifying innovative ideas for commercial success is a critical strategy component of value innovation.”
Interest in the duo’s ideas about value innovation, especially among the Europeans, is growing, thanks to a series of well-received articles published over recent years in the Harvard Business Review and their presentation last year at the World Economic Forum at Davos. “Here we were at Davos, moderating a discussion on value innovation, and yet only one European, Hasso Plattner [the founder and CEO of SAP AG], was on the panel,” recalls Professor Mauborgne. “This raised the question, ‘Why aren’t there more European CEOs and companies worth listening to on this subject?’ What is the problem in Europe? The answer that kept coming back is this: Europe is strong in science and technology, but weak in connecting innovation and commerce.”
W. Chan Kim, born in Korea, and Renée Mauborgne, an American, arrived at INSEAD from the University of Michigan Business School, where both had studied and taught. Each came to INSEAD in search of new perspectives. “In the United States, international business still means the U.S. and the rest of the world,” says Professor Mauborgne. “Here it is different. We wanted to learn about the reality of international business and understand the role and scope of strategy within that.”
It seems fitting that a Korean and an American engaged in a global search for innovative business ideas should make a place like INSEAD their intellectual base. Strategy+business met Professors Kim and Mauborgne at their offices at INSEAD and asked about the intellectual stimulus offered by their move to Europe.
S+B: Although your general approach to research seems to look for commonalities across diverse sources and aspects of business performance, you increasingly seem to offer a European perspective on the business world. Is that a fair comment?
Mauborgne: Yes and no. True, we study European companies far more extensively than our American-based colleagues. And true, there are different issues at play, different constraints faced by European companies.
But being educated in the U.S. and then coming to Europe, we saw that what happens in the U.S. business world also happens in Europe. There are universal business phenomena. Outsiders coming to the U.S. see it in a clearer light, and the same applies to us coming to Europe. Moving to Europe brought this universality home to us and gave us the confidence to generalize our theories.
Even so, when we looked at European companies, we found there is a far greater gap between top-performing companies and laggards within the same geographic setting than there is between top-performing European companies and their U.S. equivalents. Striking similarities exist between the strategic perspectives and energy of Nicholas Hayek [the chairman and CEO of SMH/Swatch Group] and Hasso Plattner in Europe and Scott Cook of Intuit or Herb Kelleher of Southwest Airlines in the U.S. All have a strong no-excuses attitude, an obsession with offering buyers leaps in value, and a compelling commitment to create new markets. They are tidal waves of energy. There is a pulse running through these companies that is inspiring.
S+B: When European and U.S. productivity numbers are compared, Europe usually looks worse. Does your experience confirm that?
Mauborgne: Europeans, on average, still tend to be supplier driven. The classic example in France is the sign on the shop door Entrée Libre. This literally means you are free to enter and a fee will not be charged for the privilege of looking at their goods. In other words, the stores are doing customers a favor rather than customers doing them a favor by potentially buying their goods. This is also manifest in the strong focus on engineering — irrespective of whether customers understand the value in the engineering.
Europeans need to innovate their attitude toward business. There are, however, some signs that this is beginning to occur. In Fontainebleau, for example, in the last few years Entrée Libre signs have been removed from more and more stores. That may sound like a small thing, but it is very telling of a new shift that is occurring.
Kim: Europe is as good as the U.S. in terms of technology. Europe is missing the link between technology and commerce. The reasons Europe is poor at commercializing technology have to do with how Europe creates and drives its innovation and entrepreneurial culture. Americans are very bottom-line oriented and very good at value innovation. Europe needs to create a bridge, to drive innovation from the perspective of value. In Europe, there is no Silicon Valley, a place where young and old, clicks and mortar, come together, a place that is driven by entrepreneurship. European industry can — and needs to — be more unified. There are plenty of think tanks and the like, but no unifying theme. This is why the idea of the Value Innovation Institute is so compelling.
S+B: How do you define value innovation?
Mauborgne: Value innovation is creating an unprecedented set of utilities at a lower cost. It is not about making trade-offs, but about simultaneously pursuing both exceptional value and lower costs. The Value Innovation Institute will be dedicated to helping companies achieve this strategic mission.
S+B: Although you regard yourselves as pure academics, there seems to be a populist slant to your work. You are asking straight, basic business questions rather than posing abstract hypotheses.
Mauborgne: We ask, Who is doing something interesting? What is it that makes companies exciting, confident, and strong? Innovation is the life of a company, and we have fun by looking inside companies — both leaders and laggards — to understand the way forward.
We have a natural curiosity. So, as our research progresses, we create new hypotheses: Why is it that companies stop innovating and growth slows? How can you find the one idea faster? How do you price something that hasn’t been sold before?
S+B: Your work suggests that companies often lack insight into the basis of their competitiveness. They don’t have all that many answers to your questions.
Mauborgne: That’s true. Companies are often unclear on which factors they compete on. They rarely think about alternative industries — the broad range of industries that provide similar products or services. Give companies 20 factors they compete on, and they will agree on 10, but dispute the remainder.
That is a large part of the reason organizations are overtired and lacking in creative momentum. Because companies often lack a clear, compelling strategy that everyone understands and that sets the company apart, projects are often undertaken that pull the organization in different directions. Individually, a case can be made to justify each project, but collectively, because they are not guided by a unified strategy, the actions do not add up to significant gains.
S+B: Strategy, in your eyes, needs to be built around value innovation.
Kim: Our point is that value and innovation are — or should be — inseparable. Value innovation places equal emphasis on value and innovation. Value without innovation can include value creation that simply improves the buyers’ existing benefits. Innovation without value can be too technology driven.
S+B: The mistake has been to equate innovation with advances in technology?
Kim: Yes, value innovation is a strategy concept that is distinct from either value creation or technology innovation. There are plenty of examples of companies that developed technology and then failed to capitalize on it — in video recording technology, Ampex [Corporation] led the way technologically in the 1950s. But value innovators like JVC and Sony brought the technology to the mass market.
There are also many examples of true value innovation occurring without new technology. Look at Starbucks coffee shops, the furniture retailer IKEA, the fashion house of Ralph Lauren, or Southwest Airlines. They are in traditional businesses, but each is able to offer new and superior value through innovative ideas and knowledge.
The power of value innovation is in engaging people to build collective wisdom in a constructive manner. Value innovation means that the range of disagreement becomes smaller until creativity explodes. Value innovation is fundamentally concerned with redefining the established boundaries of a market. If you offer buyers hugely improved value or create an unprecedented set of utilities in order to give birth to new markets, then the competition becomes unimportant. Instead of playing on the same field, you have created a new one.
Mauborgne: Value innovation enables companies to shift the productivity frontier to a new terrain. Value improvements get you only so far. Value innovation is concerned with challenging accepted assumptions about particular markets, changing the way managers frame the strategic possibilities.
S+B: Is the driving force behind value innovation the willingness of companies to create new markets?
Mauborgne: Fundamentally. Innovation occurs across industries, across countries, across companies. These are universal forces. It is, therefore, irrelevant to categorize organizations by their sector or geographical location. Yet, if you look at strategy literature, industry boundaries are usually regarded as central — think of SWOT analysis or Michael Porter’s Five Forces Framework.
When we came to Europe, we found companies that were making the move from being supply driven — outcompeting — to demand driven, to actually creating markets, creating new business space. In the U.S., there were companies like Home Depot that were vaunted for being different and that were creating new wealth. When we came to Europe, we discovered a rich new vein of examples; companies that were breaking the mold — companies like the Formule 1 hotel chain or Bert Claeys in Belgium. Formule 1 looked anew at the French low-budget hotel market and created hotels attractive to both truck drivers and businesspeople. The Bert Claeys Group built new market space around Belgium’s cinemas by refusing to accept common perceptions about what was a declining industry. Bert Claeys ignored long-term decline and created the world’s first “megaplex” cinema with 25 screens and seating for 7,600.
When we talked to these companies, their managers said much the same things as their American counterparts. There was a pattern to their strategies. The big issue for them was not necessarily innovating in terms of technology or science, but bringing innovation to bear on the value they delivered to buyers.
S+B: Can you explain that further?
Kim: Companies have tended to concentrate on differences between different groups of customers. They have divided them into ever smaller and neater segments so they can customize their offerings to meet the needs of those segments.
We found that value innovators take a different approach. Instead of looking at differences between customers, they focus on the basic commonalities across customers. When companies create unprecedented value on those commonalities, the core of the market is pulled toward them as customers are willing to forgo their individual preferences. Value innovation desegments and collapses established market boundaries by challenging accepted and assumed market order. Unlike the strategy framework built on environmental determinism driven by competition, value innovation takes a constructionist view of the market, where its focus is on shaping the market by cognitive reorderings in managers’ strategic thinking.
S+B: How can companies use value innovation to create new market space?
Mauborgne: The challenge is to create new demand, what we call market space. New market space is about creating a company’s future. Companies can continue to mine their wealth from an existing market space — that’s maintenance. They can concentrate on market share. But there is something more — the act of creation. Creating new market space will become increasingly vital.
Creating new market space provides growth. There are two paths to growth. One is the mergers-and-acquisitions path, which often leads to growth but rarely leads to profitable growth. The other is organic growth by creating new businesses. While this path is profitable and necessary, in markets where supply exceeds demand, companies are often hesitant because they don’t have a path forward to believe that they could succeed in changing things. They need a bridge to get there. Hopefully, some of the ideas and analytics we have been developing will help companies in building that bridge.
S+B: What else is needed for companies to grow?
Kim: Another element is our concept of “fair process.” This has to do with people. Transformation requires that companies earn the intellectual and emotional commitment of their employees. To do so requires a degree of fairness in making and executing decisions. All a company’s plans will come to nothing if they are not supported by employees.
If you violate fair process it can be devastating. British Airways lost significant ground in employee morale and customer service after it announced a cost-cutting program at a time when its profits were high and planes were full. It violated fair process in making the plans. There was no engagement, explanation, or clarifying of expectations.
Fair process is based on the simple human need for intellectual and emotional recognition. Without fair process it can be difficult for companies even to achieve something their people generally support.
S+B: What are the basic questions companies need to ask themselves if they are to embrace fair process?
Mauborgne: First, they need to ask whether they engage people in decisions that affect them. Do they ask for input and allow people to refute the merit of one another’s ideas? Do they explain why decisions are made and why some opinions have been overridden? And, after a decision is made, is it clearly stated so that people understand the new standards, the targets, responsibilities, and penalties? The big U.S. automakers have a history of violating fair process and have paid the price for it many times over.
S+B: Most recently you have moved into the world of predictions with your work on how to spot winning business ideas. Surely this is more of an art than a science?
Mauborgne: We have created three analytical tools to help managers identify a winning business idea whatever the market space it occupies or creates.
The first is the Buyer Utility Map, which indicates the likelihood that customers will be attracted to a new idea. This is a matrix based on six stages of buyer experience, from how easy it is to find a product to how easy it is to eventually dispose of it, and six “customer utility levers” — from environmental friendliness to improved customer productivity. Innovations should occupy as many squares on the matrix as possible, although it is unlikely to be more than three or four.
The second tool, the Price Corridor of the Mass, identifies which price will unlock the greatest number of customers. It does this by benchmarking prices not just against similar products, but against different products that fulfill the same function. For example, short-haul airlines compete not just against other airlines, but against buses, trains, and cars.
The third tool, the Business Model Guide, is a framework for calculating whether and how a company can deliver an innovative product or service at the targeted price. It includes options such as cost targeting and opportunities for outsourcing and partnering.
S+B: If you apply the tools, will innovation surely follow?
Mauborgne: Not quite. First, innovation, like all other strategic actions, will always involve both opportunities and risks. Ours are designed to help systematically raise the probabilities of success, shifting the odds in favor of the opportunities over the risks.
Innovations also often have to overcome adoption hurdles. There may be resistance from stakeholders both inside and outside the company. Employees, business partners, and the general public can tackle those problems. The key is open discussion with these stakeholders about the impact and ramifications of the innovation. Look at genetically modified food. What if Monsanto had opened up discussions with the stakeholders? Perhaps, instead of being vilified, it might have ended up as the “Intel Inside” of food for the future — the provider of the essential technology.
S+B: Are you still finding new value innovators doing interesting things that are largely unknown?
Mauborgne: Constantly. The periphery exists in less-developed countries and in countries not known for value innovation. Peripheral companies include the Hungarian bus company NABI, which is rapidly dominating the U.S. bus market by changing the value curve of the industry, and Cirque du Soleil, the Canadian circus that has led to a rebirth and redefinition of the circus industry. Cirque du Soleil collapses the two industries of theater and circus and in doing so leapfrogs Ringling Brothers and Barnum and Bailey circuses and opens up the entire adult audience to circus at a price point several multiples more than that of a traditional circus.
There is also the French company JCDecaux, which is the leading provider of outdoor advertising space. JCDecaux created an entirely new industry space by converting bus stops and metro stations into very desirable advertising space. Municipalities win by getting outdoor furniture that is stylish and free, while JCDecaux wins by selling the advertising spaces in these desirable prime-location city stops.
S+B: But surely emulating such peripheral organizations is very difficult and perhaps ill advised or even impossible? P&G is not Cirque du Soleil.
Kim: Businesspeople always say there are questions of culture, the stock market, rules and regulations, etc. Yet whenever we show the Formule 1 example, people say, “Why can’t we do that in my industry?” The challenge is not to emulate what any of these companies did, but to understand the thinking process that allowed these companies to create a new market and value innovations. Companies find this challenge inspiring. Learning to think differently about opportunities and risks, daring to move forward into the future, that is what keeps people and companies alive, young, and growing.
S+B: You appear quite prepared to commercially share your concepts and the notion of value innovation.
Kim: We gain more by giving people the value innovation trademark free of charge so long as they share their knowledge and research findings. It is an open-system approach. They tell us what works and what doesn’t work.
The more empirical evidence and market feedback we have either against or for our hypotheses, the richer the concepts we can build for theory and practice.
Reprint No. 02110
W. Chan Kim and Renée Mauborgne are Professors of Strategy at INSEAD, one of the world’s top business schools, and co-directors of the INSEAD Blue Ocean Strategy Institute in Fontainebleau, France. They are the authors of the international bestselling book Blue Ocean Strategy which is recognized as one of the most iconic and impactful strategy books ever written, and the just released New York Times, #1 Wall Street Journal, USA Today, and Los Angeles Times Bestseller BLUE OCEAN SHIFT: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth. Amazon selected BLUE OCEAN SHIFT as a “Best Business and Leadership Books of 2017.” BLUE OCEAN SHIFT was also selected as “Apple iBooks’ Best Business Book of the Month”, and as a Financial Times “Business Book of the Month”. Kim and Mauborgne advise, consult and speak to companies and governments worldwide, and have published numerous bestselling articles in Harvard Business Review and The Academy of Management Journal, Management Science, Organization Science, Strategic Management Journal, Administrative Science Quarterly, Journal of International Business Studies, MIT Sloan Management Review, The Wall Street Journal, The New York Times, The Financial Times, among others. They are the founders of the Blue Ocean Global Network (BOGN), a global community of practice on the Blue Ocean family of concepts that they created. BOGN embraces academics, consultants, executives, and government officers.
Awards & Distinctions:
Authors of the just released New York Times, #1 Wall Street Journal, USA Today, and Los Angeles Times Bestseller BLUE OCEAN SHIFT: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth (Hachette Books, September 2017).
Authors of the acclaimed over 3.6 million copy bestseller, Blue Ocean Strategy, which is published in a record-breaking 44 languages and is a bestseller across five continents.
Ranked in the top 3 management gurus in the world in the Thinkers50 listing.
Fellows of the World Economic Forum, Davos.
Kim has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and the Asia Pacific region. He is an advisory member for the European Union and serves as an advisor to several countries.
Mauborgne served on President Barack Obama’s Board of Advisors on Historically Black Colleges and Universities (HBCUs) for the president’s two terms.
Authors awarded the 2014 Carl S. Sloane Award for Excellence from the Association of Management Consulting Firms; selected for the 2011 Leadership Hall of Fame by Fast Company magazine; named among the world’s best business school professors in 2013 by MBA Rankings.
Frequent speakers at some of the world’s largest and most prestigious global and corporate events. The authors have shared the stage with former President Bill Clinton, former President George W. Bush, former Secretary of State John Kerry, former Secretary of State Colin Powell, former Vice President Al Gore, Prime Minister of Malaysia Najib Razak, the King of Swaziland Mswati III, the Prime Minister of Thailand Prayut Chan-o-cha, Jack Welch, Rudy Giuliani, Bill Gates, former Secretary of State Henry Kissinger, Paul Krugman, film director James Cameron, Wynton Marsalis, among many others.
In 2016 the first ever International Conference on Blue Ocean Strategy was held. It was attended by over 5,500 global leaders from 45 countries, including Heads of State, Ministers, civil service leaders, and representative leaders from the United Nations, the Organization of Islamic Cooperation, the Association of Southeast Asian Nations (ASEAN), and member countries of the Commonwealth Association of Public Administration and Management.
Renée Mauborgne is The INSEAD Distinguished Fellow and a professor of strategy at INSEAD, one of the world’s top business schools. She is also Co-Director of the INSEAD Blue Ocean Strategy Institute. She was born in the United States.
Mauborgne served on President Barack Obama’s Board of Advisors on Historically Black Colleges and Universities (HBCUs) for the President’s two terms. She is also a Fellow of the World Economic Forum.
Mauborgne has published numerous articles on strategy and management which can be found in The Academy of Management Journal, Management Science, Organization Science, Strategic Management Journal, Administrative Science Quarterly, Journal of International Business Studies, Harvard Business Review, Sloan Management Review, and others. She also has published numerous articles in The Wall Street Journal, The Wall Street Journal Europe, The New York Times and The Financial Times, among others.
Mauborgne is the co-author of the global bestseller Blue Ocean Strategy (Harvard Business Review Press) and the just released, indispensable follow-up, BLUE OCEAN SHIFT: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth (Hachette Books, September 2017). BLUE OCEAN SHIFT is a New York Times Bestseller and #1 Wall Street Journal Bestseller. It is also an USA Today Bestseller, Los Angeles Times Bestseller, and an International Bestseller. Amazon selected BLUE OCEAN SHIFT as a “Best Business and Leadership Books of 2017.” BLUE OCEAN SHIFT was also selected as “Apple iBooks’ Best Business Book of the Month”, and as a Financial Times “Business Book of the Month”. Her book Blue Ocean Strategy has sold over 3.6 million copies and is recognized as one of the most iconic and impactful strategy books ever written. It is being published in a record-breaking 44 languages and is a bestseller across five continents. Blue Ocean Strategy has won numerous awards including “The Best Business Book of 2005″ Prize at the Frankfurt Book Fair. It was also selected as a “Top Ten Business Book of 2005″ by Amazon.com, and as one of the 40 most influential books in the History of the People’s Republic of China (1949-2009) along with Adam Smith’s The Wealth of Nations and Milton Friedman’s Free to Choose. Click here for a list of the major book awards won.
Mauborgne is ranked in the top 3 management gurus in the world in the Thinkers50 listing of the World’s Top Management Gurus. She is the highest placed woman ever on Thinkers50. In 2014, Mauborgne, along with her colleague W. Chan Kim, received the Carl S. Sloane Award for Excellence from the Association of Management Consulting Firms due to the impact their management research has made on the global consulting industry. She also won the 2011 Thinkers50 Strategy Award. Mauborgne was selected for the 2011 Leadership Hall of Fame by Fast Company magazine and as one of the World’s 50 Best Business School Professors in 2012 by Fortune.com. She was also named among the world’s top five best business school professors in 2013 by MBA Rankings.
Mauborgne received the Nobels Colloquia Prize for Leadership on Business and Economic Thinking 2008 and is the winner of the Eldridge Haynes Prize, awarded by the Academy of International Business and the Eldridge Haynes Memorial Trust of Business International, for the best original paper in the field of international business. She is the winner of the Prix DCF 2009 (Prix des Dirigeants Commerciaux de France 2009) in the category of “Stratégie d’entreprise.” L’Expansion named Mauborgne along with her colleague W. Chan Kim as “the number one gurus of the future.” The Sunday Times (London) called them “two of Europe’s brightest business thinkers,” and noted, “Kim and Mauborgne provide a sizeable challenge to the way managers think about and practice strategy.” The Observer called Kim and Mauborgne, “the next big gurus to hit the business world.” She won the 2007 Asia Brand Leadership Award. Mauborgne and Kim are the top 5 bestselling authors in the world at the Case Centre and the recipients of numerous Case Centre awards including “The Global Top 10 Bestselling Case Writers (2015/2016)”, “All-Time Top 40 Bestselling Cases” in 2014, “Best Overall Case” in 2009 across all disciplines and “Best Case in Strategy” in 2008.
Mauborgne co-founded the Blue Ocean Global Network (BOGN), a global community of practice on the blue ocean strategy family of concepts that they created. BOGN embraces academics, consultants, executives, and government officers.
STRATEGY
RENEE MAUBORGNE
Affiliate Professor of Strategy
The INSEAD Distinguished Fellow of Strategy and International Management
Co-Director of the INSEAD Blue Ocean Strategy Institute
BiographyPublications
CONTACT
EMAIL: renee.mauborgne@insead.edu
PHONE: +33 1 60 72 43 18
CAMPUS: USA
RESEARCH AREAS
Disciplinary Research: Reconstructionist Theory, Procedural Justice, General Research: Strategy, Management and Innovation in the Knowledge Economy
TEACHING AREAS
Strategy and Management for MBAs and Executives
BIOGRAPHY
Renée Mauborgne is The INSEAD Distinguished Fellow and a professor of strategy at INSEAD, the world's second largest business school. She is also Co-Director of the INSEAD Blue Ocean Strategy Institute. She was born in the United States.
Mauborgne served on President Barack Obama’s Board of Advisors on Historically Black Colleges and Universities (HBCUs) for the President’s two terms. She is also a Fellow of the World Economic Forum.
Mauborgne has published numerous articles on strategy and management which can be found in the Academy of Management Journal, Management Science, Organization Science, Strategic Management Journal, Administrative Science Quarterly, Journal of International Business Studies, Harvard Business Review, Sloan Management Review, and others. She also has published numerous articles in The Wall Street Journal, The Wall Street Journal Europe, The New York Times and The Financial Times, among others.
Mauborgne is the co-author of the global bestseller Blue Ocean Strategy (Harvard Business Review Press) and the just released, indispensable follow-up, BLUE OCEAN SHIFT: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth (Hachette Books, September 2017). BLUE OCEAN SHIFT is a New York Times Bestseller and #1 Wall Street Journal Bestseller. It is also an USA Today Bestseller, Los Angeles Times Bestseller, and an International Bestseller. Amazon selected BLUE OCEAN SHIFT as a “Best Business and Leadership Books of 2017.” BLUE OCEAN SHIFT was also selected as “Apple iBooks’ Best Business Book of the Month”, and as a Financial Times “Business Book of the Month”. Her book Blue Ocean Strategy has sold over 3.6 million copies and is recognized as one of the most iconic and impactful strategy books ever written. It is being published in a record-breaking 44 languages and is a bestseller across five continents. Blue Ocean Strategy has won numerous awards including “The Best Business Book of 2005″ Prize at the Frankfurt Book Fair. It was also selected as a “Top Ten Business Book of 2005″ by Amazon.com, and as one of the 40 most influential books in the History of the People’s Republic of China (1949-2009) along with Adam Smith’s The Wealth of Nations and Milton Friedman's Free to Choose. Click here for a list of the major book awards won.
Mauborgne is ranked in the top 3 management gurus in the world in the Thinkers50 listing of the World’s Top Management Gurus. She is the highest placed woman ever on Thinkers50. In 2014, Mauborgne, along with her colleague W. Chan Kim, received the Carl S. Sloane Award for Excellence from the Association of Management Consulting Firms due to the impact their management research has made on the global consulting industry. She also won the 2011 Thinkers50 Strategy Award. Mauborgne was selected for the 2011 Leadership Hall of Fame by Fast Company magazine and as one of the World’s 50 Best Business School Professors in 2012 by Fortune.com. She was also named among the world’s top five best business school professors in 2013 by MBA Rankings.
Mauborgne received the Nobel Colloquia Prize for Leadership on Business and Economic Thinking 2008 and is the winner of the Eldridge Haynes Prize, awarded by the Academy of International Business and the Eldridge Haynes Memorial Trust of Business International, for the best original paper in the field of international business. She is the winner of the Prix DCF 2009 (Prix des Dirigeants Commerciaux de France 2009) in the category of “Stratégie d’entreprise.” L'Expansion named Mauborgne along with her colleague W. Chan Kim as “the number one gurus of the future.” The Sunday Times (London) called them “two of Europe’s brightest business thinkers,” and noted, “Kim and Mauborgne provide a sizeable challenge to the way managers think about and practice strategy.” The Observer called Kim and Mauborgne, “the next big gurus to hit the business world.” She won the 2007 Asia Brand Leadership Award. Mauborgne is the winner of several Case Centre awards including “The Global Top 10 Bestselling Case Writers (2015/2016)”, “All-Time Top 40 Bestselling Cases” in 2014, “Best Overall Case” in 2009 across all disciplines and “Best Case in Strategy” in 2008.
Mauborgne co-founded the Blue Ocean Global Network (BOGN), a global community of practice on the blue ocean strategy family of concepts that they created. BOGN embraces academics, consultants, executives, and government officers.
Leadership #BigBusiness
SEP 26, 2017 @ 08:00 AM 1,738 The Little Black Book of Billionaire Secrets
W. Chan Kim And Renée Mauborgne: How To Shift From A Red To A Blue Ocean
Dan Schawbel , CONTRIBUTOR
Opinions expressed by Forbes Contributors are their own.
Chan KIM and Renée MAUBORGNE INSEAD
Chan KIM and Renée MAUBORGNE
I spoke to W. Chan Kim and Renée Mauborgne, authors of the new book BLUE OCEAN SHIFT – Beyond Competing: Proven Steps to Inspire Confidence and Seize New Growth, about why they decided to write the book, the mindset of a Blue Ocean Strategist, how to move from a red to a blue ocean amidst changes in the marketplace, new research on the dynamics of market creation and growth, and how we can make career shifts.
Kim and Mauborgne are Professors of Strategy at INSEAD, one of the world’s top business schools, and Co-Directors of the INSEAD Blue Ocean Strategy Institute. They are the authors of the international bestseller Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. They are ranked in the top three management gurus in the world in the Thinkers50 list and have received numerous awards from across the globe and they are Fellows of the World Economic Forum and the founders of the Blue Ocean Global Network.
Dan Schawbel: Why did you decide to write Blue Ocean Shift years after your successful book Blue Ocean Strategy? What's changed in the marketplace that inspired you to write this now?
W. Chan Kim: Since the publication of Blue Ocean Strategy, the terms red ocean and blue ocean entered the business vernacular with speeds we never expected. Individuals, governments, companies and nonprofits around the globe started to look at their world through the lens of red and blue oceans with increasing calls to action to create blue oceans. As their focus of interest and discussion moved from “What is blue ocean strategy?” to “How do we actually apply its theory and tools to shift from red to blue oceans?”, we were presented with a whole new research challenge.
To meet this new research challenge, we set out to study those who had applied our theory and methodology to their organizations to create and capture blue oceans. We analyzed the patterns of their successes and failures and drew lessons from their experiences to understand what worked, what didn’t work, and how to avoid potential pitfalls in making a successful blue ocean shift. After a decade of new study and analysis, we arrived at a deeper understanding of what it takes to succeed in the blue ocean shift process. If Blue Ocean Strategy is the what, BLUE OCEAN SHIFT is the how.
If we look at changes in the marketplace since we wrote Blue Ocean Strategy, forces that drive the importance of creating blue oceans — such as intensifying competition, tighter profit margins and supply exceeding demand in existing industries — have only accelerated over time. Moreover, new forces — such as the rising influence of social media megaphones that make it increasingly impossible for organizations to over-market their me-too offerings as well as the rising calls for creative new solutions in a broad swath of industries — make it more imperative now than ever for organizations to make a blue ocean shift. Hence, it’s not so much about changes in the marketplace that motivated us to write Blue Ocean Shift. It’s more about our desire to answer the questions of market actors invoked by Blue Ocean Strategy.
Schawbel: Can you explain the mindset of a Blue Ocean Strategist?
Renée Mauborgne: The mindset of a blue ocean strategist driven by market-creating logic is very different from that of red ocean strategist driven by market-competing logic that dominates most executives’ mental models. Blue ocean strategists see new opportunities where others may only see constraints and red oceans of declining profits and growth. They ask fundamentally different sets of questions that enable them to challenge long-held assumptions and artificial boundaries we unknowingly impose upon ourselves. Adopting the perspective of the blue ocean strategist is like looking up at the night sky at the single constellation your industry has long been focused on and then turning your head to see the vast expanse of the universe that hadn’t been in your field of vision before. It expands your horizons and shifts your understanding of where opportunity resides.
Firstly, unlike red ocean strategists, blue ocean strategists do not take industry conditions as given. Rather they set out to reshape them in their favor. What a blue ocean strategist recognizes, and what most of us all too often forget, is that while industry conditions exist, individual firms created them. And just as individual firms created them, individual firms can shape them too.
Secondly, blue ocean strategists do not seek to beat the competition. Instead they aim to make the competition irrelevant. They don't assume that just because competitors are doing something it's the right thing to do. They realize that while an incremental improvement over what competitors do may give you a competitive advantage, nothing short of a quantum leap in value will make the competition irrelevant. Their aim is to push the organizations to create offerings so compelling that anyone who sees them or tries them can't help but rave about them.
Thirdly, blue ocean strategists focus on creating and capturing new demand, not fighting over existing customers. They recognize that extra demand is out there, waiting to be unlocked and that noncustomers, not customers, provide the greatest insight into major pain points imposed by their industry that make people choose against it. By looking to noncustomers and what turns them off about an industry, they seek to create all new demand.
Fourthly, blue ocean strategists simultaneously pursue differentiation and low cost. Unlike red ocean strategists, they aim to break, not make, the value-cost trade-off. To offer buyers a quantum leap in value, blue ocean strategists focus as much on what to eliminate and reduce as they do on what to raise and create, allowing them to leapfrog the competition, and attracting not just new customers but fans.
Schawbel: If you were in a blue ocean years ago but now it's a red ocean, should you move out of it? If so, what are your first steps in making that transition?
Kim: The first question you need to ask yourself here is: Are you really in a red ocean now? Do you really need to move out of it or is it too early? To answer these questions, you need to understand “where you are now.” This involves drawing your as-is strategy canvas that will give you and your team a clear big picture about the current state of play. Such an exercise will provide you a compelling, objective case for why a blue ocean shift is in order — or not in order. It will keep you from pursuing another blue ocean when there is still a huge profit stream to be collected from your current offering.
The strategy canvas pushes you to take a step back from the detail you are typically enmeshed in, and clearly see your industry’s defining contours without getting lost in the technical details of small operational differences. On a single page it captures the current state of play, the assumptions the industry acts on, as well as the degree of competitive convergence across the existing players. When the as-is strategy canvas tool reveals that your organization’s strategic profile is a “me-too” or inferior to your competition, it is a powerful mobilization tool to underscore the need to make a blue ocean shift. The beauty of this step is that once you have completed it, you will not need to tell anyone that a blue ocean shift is necessary. People will viscerally feel it.
The next step in making a blue ocean shift is to “imagine where you could be”. Here you will use tools such as the buyer utility map and the three tiers of noncustomers to identify real opportunities that you could unlock to make a blue ocean shift. The buyer utility map helps you discover the specific pain points and points of intimidation imposed by your industry that block buyer value and narrow the basis of its appeal. The three tiers of noncustomers helps you identify the total demand landscape that lies outside your industry’s current understanding. It allows noncustomers that were once invisible to your organization become visible so that you have a good grasp of the potential new demand that could be unlocked with a reconstructed offering. Going through these steps, you and your team will gain confidence that blue ocean opportunities are out there, and that you have what it takes to create them.
Schawbel: What are some of your latest research findings that surprised you and would be valuable to business leaders?
Mauborgne: Our research findings in fact didn’t come as a surprise to us. Rather, they were in line with what we had hypothesized about the dynamics of market creation and growth. They impart a few key valuable lessons to business leaders. First, market creation has often been seen as the domain of entrepreneurs with certain traits like animal instinct and persistency who make it happen through their trial and error. Our research shows that market creation can be achieved through a reliable and systematic process that can be reproduced. It doesn’t have to be a random, high-risk endeavor conducted through trial and error. Market creation, hence, needs to be brought to the core of an organization’s strategy. By so doing, market creation can be pursued as a systematic strategy to open up a new value-cost frontier and achieve new growth. BLUE OCEAN SHIFT shows how to do so by providing a systematic learnable five-step process that anyone, regardless of their entrepreneurial talent, or any organization – large or small, for profit or nonprofit, even a nation - can apply to achieve new growth.
Second, most people equate market creation with creative destruction or disruption. It is accepted wisdom that creating a new market would destroy or disrupt an existing one. Disrupt this, disrupt that. That has become a popular mantra. Our research shows, however, that many new markets are created without disrupting existing ones. We have found that a focus on disruption is limiting and leaves half the opportunities to create new growth and new markets off the table. That other half isn’t about disruption at all. It’s what we call nondisruptive creation. While disruption sets out to offer breakthrough solutions for existing industry problems, nondisruptive creation generates new markets by identifying and solving brand-new problems or seizing brand-new opportunities. And as Blue Ocean Shift reveals, the opportunities to unlock nondisruptive creation are huge. Business leaders need to understand that nondisruptive creation is as fundamental a driver of new growth as disruptive creation and it will become more important for the future growth.
Third, existing strategy work has been virtually silent on the role of people and our human spirit in creating growth. Yet, our research shows that making a blue ocean shift is a transformational journey that requires a balance of hearts and minds, of humanness, confidence, and creative competence. For any process to work, it must acknowledge our doubts and build our confidence as much as unlock people's requisite creativity. Humanness builds psychological understanding into the strategic process so that people are willing to engage fully at every step - even when they are hesitant, may not trust one another, or are skeptical of their ability to succeed on the transformation journey. When confidence to act and creative competence meet, real results are achievable. Without the confidence to act, few will venture down a new path, no matter how clear the roadmap. It is important for business leaders to put humanness, or inspiring people’s confidence, on an equal plane with creative competence to move their team and their organization from red to blue oceans in a way that people own and drive the process.
Schawbel: How can someone who has a stalling career make a shift?
Kim and Mauborgne: The first question to ask here is: do you really have a stalling career? To answer this question, draw your as-is strategy canvas to get a clear understanding of where you stand in reality and the current state of play as it relates to your career. This involves identifying key career success factors and plotting your career profile vis-à-vis people who have a “shining” career. Plotting your profile against the best-practice profile in the market is useful as it typically captures the profile that is seen as a gold standard and that others look up to. This is your strategic reference point, not because you want to mimic this profile but because it provides you a baseline to assess new ideas against as you go for making a blue ocean shift in your career.
The next steps involve imagining where you could be in the future and finding out how to get there. Here, your task is to identify and assess potential blue ocean opportunities and develop alternative career strategies to unlock them. The systematic tools and process of blue ocean shift will enable you to look at the universe anew and to see what others don’t see as you formulate your new career alternatives. In the process you will think about what characteristics do you need to eliminate, reduce, raise and create to construct potential blue ocean strategic moves that will allow you to stand apart and turn your stalling career to a shining one. You will draw your to-be strategy canvas that shows you precisely in one simple visual the gaps you need to close to apart from competition and for making your move to achieve the blue ocean shift. Please remember, don’t focus on seeking hot/popular career opportunities and trying to out-compete others to win in a crowded and bloody red ocean career space. Go for jobs that you love to do and are meaningful to you to create your own blue ocean career space.
The point is that anyone can follow the simple five-step process outlined in our book to make a blue ocean shift. Whether you are a cash-strapped start-up, non-profit, a large, established company, a government organization with bureaucratic obstacles, or an individual who wishes to make a shift in her/his stalling career, the process for making the blue ocean shift is the same.
Dan Schawbel is a keynote speaker and the New York Times bestselling author of Promote Yourself and Me 2.0. Subscribe to his free newsletter.
Blue Ocean Shift: Beyond Competing; Proven Steps to Inspire Confidence and Seize New Growth
Publishers Weekly. 264.25 (June 19, 2017): p101.
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Full Text:
Blue Ocean Shift: Beyond Competing; Proven Steps to Inspire Confidence and Seize New Growth
W. Chan Kim and Renee Mauborgne. Hachette, $28 (336p) ISBN 978-0-3163-1404-6
Business-school professors Kim and Mauborgne (Blue Ocean Strategy) dedicate this stirring business primer to showing how organizations can move from fighting over crowded markets with competitors to creating their own markets. In order to move from "red oceans full of sharks" to "wide-open blue oceans" free of rivals, Kim and Mauborgne explain, leaders must identify and challenge fundamental assumptions. These include, most commonly, that market boundaries are fixed and that companies must decide between differentiation and low cost. The authors bolster their credibility by showing how nonprofits, businesses, and governments have applied their strategies, and they draw lessons from these clients' successes and failures. The book includes powerful real-life examples, including that of the National Youth Orchestra of Iraq, which challenged sectarian divisions; French appliance maker Groupe SEB, which decided to produce french-fry makers that don't involve any actual frying; and the government of Malaysia, which moved inmates out of overcrowded prisons to idle land on military bases. This invaluable guide will be empowering to business-minded readers. Agent: Robert Barnett. Williams & Connolly.
Source Citation (MLA 8th Edition)
"Blue Ocean Shift: Beyond Competing; Proven Steps to Inspire Confidence and Seize New Growth." Publishers Weekly, 19 June 2017, p. 101. General OneFile, http://link.galegroup.com/apps/doc/A496643905/ITOF?u=schlager&sid=ITOF&xid=71072fcc. Accessed 20 Mar. 2018.
Gale Document Number: GALE|A496643905
The best market for your product probably doesn't exist yet, says a new book, Blue Ocean Strategy
Darren Dahl
Inc.. 27.3 (Mar. 1, 2005):
Copyright: COPYRIGHT 2005 Mansueto Ventures LLC on behalf of Inc.
http://www.inc.com/
Full Text:
The best market for your product probably doesn't exist yet, says a new book, Blue Ocean Strategy.
Darren Dahl
After studying 150 examples of innovation, the authors W. Chan Kim and Renee Mauborgne discovered that ultra-successful companies are ones that create new territories (or blue oceans) for their products, rather than competing in existing markets (red oceans) by trimming prices and profits to gain market share. The book cites dozens of prime examples, in both low- and high-tech industries. For instance, Casella Wines lured non wine drinkers into the market with its Yellow Tail brand of moderately priced bottles of shiraz and chardonnay, while Cirque du Soleil targeted theatergoers as its audience instead of duking it out in the circus industry.
To discuss this book with entrepreneurs and ask the authors your questions, visit www.inc.com/keyword/books.
Source Citation (MLA 8th Edition)
Dahl, Darren. "The best market for your product probably doesn't exist yet, says a new book, Blue Ocean Strategy." Inc., 1 Mar. 2005. General OneFile, http://link.galegroup.com/apps/doc/A131760949/ITOF?u=schlager&sid=ITOF&xid=a866f31d. Accessed 20 Mar. 2018.
Gale Document Number: GALE|A131760949
Diving into a 'Blue Ocean Strategy': in a tight industry, it can be sink or swim for providers, but a new business strategy offers a lifeline, and maybe even new service anchors
Terry L. Stawar
Behavioral Healthcare. 26.2 (Feb. 2006): p17+.
Copyright: COPYRIGHT 2006 Vendome Group LLC
http://www.behavioral.net/ME2/Default.asp
Full Text:
The book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renee Mauborgne (1) recently has topped business best-seller lists for at least two good reasons: It offers a truly fresh perspective on developing corporate strategy, and it provides a toolbox of practical techniques that can guide managers from the bloody-red "oceans" of competition into the blue oceans of uncontested market space. Developing a Blue Ocean Strategy is the next step in making your behavioral health organization relevant to current and future markets.
The core of Kim and Mauborgne's Blue Ocean Strategy is learning to transcend current market space by strategically differentiating your organization from competitors, while simultaneously focusing on lowering costs. Competition thus is rendered irrelevant, at least until it catches up and reconfigures along key value dimensions to imitate your organization.
The principal Blue Ocean Strategy tool is the strategy canvas--a simple line graph that illustrates the degree to which an organization invests in key value dimensions. The canvas also shows how the organization differentiates itself from the rest of the industry.
Key value dimensions vary according to industry. LifeSpring, Inc., a community mental health center serving southern Indiana, had 13 senior managers develop a list of value dimensions. The original list (table 1) had 35 items, many of which overlapped. These 35 items were combined and distilled into 5 key value dimensions (table 2). This distilling process is part of creating a strategic focus that is essential to Blue Ocean Strategy.
Kim and Mauborgne note that the language managers use in developing value dimensions can be telling. Using extensive jargon in creating value dimensions suggests an internal focus, while "buyer language" suggests a healthier outside perspective. Buyer language employs the words that customers actually use, as opposed to the professional jargon that the seller employs. For example, in behavioral health, the seller/provider might say "least restrictive and most appropriate level of care," while the buyer might describe the same thing as the "cheapest and best treatment."
The senior managers then rated these dimensions on a scale of 0 to 100 for LifeSpring, a major competitor, and the industry as a whole to develop a strategy canvas (a score of 0 score meant that the organization or industry did not address or invest in this value dimension whatsoever; a score of 100 meant that the organization or industry was fully and completed committed to this value dimension and could do little to increase investment in this area) (figure). While LifeSpring differed slightly from its major competitor and the industry in some areas, the converging value curves seen on the strategy canvas, according to Kim and Mauborgne, indicate a highly competitive "Red Ocean" environment, in which organizations are locked in competition within the same market space.
Kim and Mauborgne explain that when an organization scores highly on all dimensions across the canvas, this may suggest overinvestment in some value dimensions to the extent that the strategic focus is diluted. Zigzag patterns, with no particular rationale, suggest a lack of a coherent strategy or multiple (perhaps conflicting) independent substrategies. Also important to note are strategic contradictions, in which an organization may be high in one dimension but low in supporting dimensions. Kim and Mauborgne cite the example of a company that put high value on Web site design but had the slowest-responding site in the industry.
Creating Value and Differentiation
Kim and Mauborgne say that once your organization's value curve is defined and compared with your competitors' curves, the next step is to determine what value dimensions should be reduced, eliminated, increased, or created. Each value dimension should be analyzed carefully to establish if the investment level is appropriate for the target market space. Some dimensions might be reduced or even eliminated if they hold little value for the targeted market. Industries often cling to value dimensions because of their history and management's "ego investment" despite the reality of the buyer's valuation.
In exploring uncontested market space, say Kim and Mauborgne, a new buyer might have little regard for traditional industry value dimensions. Such dimensions might be reduced drastically or eliminated. For example, providing a full continuum of behavioral health services might appeal to management and a segment of buyers who value one-stop shopping, but it might have little value for a buyer segment such as the court system, which might be only interested in prompt assessment services. When aiming at this market segment, resources geared at maintaining a full service continuum might be more productively invested in other dimensions deemed more valuable. Developing new value dimensions that appeal to uncharted market space is the creative heart of Blue Ocean Strategy.
Paths to New Market Share
Kim and Mauborgne describe six paths to reconstructing market boundaries. These paths serve as a powerful heuristic tool to engender creative thought about new market possibilities.
Path one: Look across alternative industries. In Kim and Mauborgne's framework, alternatives are products or services that have different functions or forms but serve essentially the same general purpose, such as cinemas and restaurants. Cinemas certainly are not substitutes for restaurants, but they are alternative entertainment locations. What are some of the main alternatives to traditional psychotherapy or other behavioral healthcare services? By examining these alternatives, value dimensions can be discovered that behavioral healthcare organizations lack or in which they are deficient. LifeSpring's management team came up with the following alternatives consumers might elect among many others:
* Going to competitors (this is a substitute, not a true alternative)
* Suffering in silence
* Talking to family, friends, religious/spiritual advisers, bartenders, hairdressers, online chat-room participants, etc.
* Engaging in distracting, self-soothing, or self-medicating activities (e.g., entertainment, massage, substance use, shopping, sex, etc.)
* Attending self-help groups or self-improvement classes
* Purchasing self-help media (e.g., books, audiotapes, DVDs, videos)
* Seeking concrete help (e.g., taking kids to grandparents, getting a loan, seeking a divorce, etc.)
The challenge is not only to define the alternatives but also to identify the benefits of these alternatives to convert them into new value dimensions for use in capturing uncontested market space. For example, the above alternatives have the value dimensions of low cost, familiarity, convenience, cultural fit, flexible timing, and lower engagement levels. Such dimensions suggest the following services and enhancements:
* Online therapy and telemedicine (less engagement)
* Free nursery/baby-sitting service (convenience)
* Christian counseling program (cultural fit)
* Self-help reading group (less engagement, low cost)
* Psychoeducational groups (lower cost, less engagement)
* Conjoint grief groups with churches (cultural fit, familiarity)
Path two: Look across strategic groups within industries. In this path, strategic groups within a common market that appear not to be competing are scrutinized to determine if value dimensions can be developed; Kim and Mauborgne say the goal is to encourage buyers to move from one group to the other by adding desired value. Upscale and downscale buyer segments often are such strategic groups within an industry. Within the behavioral healthcare market, multiple strategic groups exist, such as:
* Upscale self-pay patients
* Publicly funded patients (e.g., Medicaid, Medicare, CHAMPUS, etc.)
* Other third-party payment patients
* Court-ordered patients
* Referrals from the state department of family services
Value dimensions that characterize various aspects of these segments include: premium service, exclusivity, self-indulgence, low or no out-of-pocket costs, ability to accept a wide range of insurance coverage, proficiency in forensic report writing, expert testimony, and other court-related activities. The challenge presented within this path is to develop a distinctive value curve; such a curve reflects the critical value dimensions to move buyers from other segments into the organization's market space. This is accomplished by engineering product features that meet these groups' diverse needs. Some examples might include:
* Boutique therapy services within a "gold card" service line (upscale self-pay)
* Court assistance service line with forensic expertise (court ordered)
* Custody assistance program service line (family service referred)
* Treatment staff with comprehensive insurance panel memberships (other third parties)
* Minimal legal copay (government funded)
Path three: Look across the chain of buyers. Behavioral healthcare organizations are quite familiar with the varying levels of buyers they serve. Kim and Mauborgne describe three basic classes of buyers: (1) Purchasers (those who pay for the service), (2) Users (those who actually use the service), and (3) Influencers (those who influence service use through referral, advice, or other means). Along this path opportunity exists in the possibilities of shifting marketing efforts to other classes of buyers. The buyer base in behavioral healthcare is somewhat complex and overlaps considerably:
* Purchasers: Patients and families, various government entities, insurance companies, managed care companies, etc.
* Users: Patients/participants, families and significant others, community institutions, etc.
* Influencers: Medical community, other providers, criminal justice community, political leaders, social welfare community, religious leaders, etc.
Each of the buyer classes (and subsegments within the classes) has its own preferred value curve. Kim and Mauborgne say that the challenge along this path is to shift focus from one buyer group to another by unlocking new value for that buyer segment. Activities to redefine these market boundaries might include lower out-of-pocket costs for patients, immediate service access for government buyers, or the direct marketing of specially designed services that contain high value dimensions aimed at courts, probation officers, police organizations, primary care physicians, or churches to target influencers.
Path four: Look across complementary product and service offerings. Behavioral healthcare, like most other services, is enmeshed in a matrix of related services that either facilitate or inhibit behavioral healthcare use. Having transportation, babysitting services, the ability to pay, someone to reassure or remind the potential patient, and even appropriate clothing are all factors that may encourage or discourage service utilization. Kim and Mauborgne point out that successful business models take such factors into account. In some instances such complementary services are integrated vertically as part of the behavioral healthcare package. In other instances partnerships are negotiated to ensure their presence. This pathway's challenge for behavioral healthcare managers is to design programs so that any needed complementary services are available for potential buyers.
Many behavioral health organizations already provide or arrange for transportation services or offer in-home alternatives. Advocacy to assist in accessing benefits and entitlements enhances potential patients' ability to pay, and other supportive services such as child care also might be provided directly by the behavioral healthcare organization or arranged through partnerships.
Path five: Look across functional or emotional appeal to buyers. Kim and Mauborgne's fifth path describes two basic types of appeal that the organization presents to buyers:
* Functional Appeal: based on price, function, and utility
* Emotional Appeal: based on feelings, desires, styles, trends, and status issues
This method of challenging market boundaries involves switching the type of appeal from the traditional type (whichever it is) to the opposite. Kim and Mauborgne cite Swatch, which switched the appeal of the low-end wristwatch industry from functional to emotional by emphasizing the fashion accessory value dimension.
Although behavioral healthcare deals with emotional issues, its appeal traditionally has been functional--like general medical treatment. Exceptions might include the way personal psychoanalysis was seen as a status symbol among urban artistic types in the 1950s and 1960s, or how celebrity rehab is sometimes viewed today. Is it possible, or desirable, to emphasize different value dimensions and change the appeal of behavioral healthcare to a more emotional one? Redefining psychotherapy as lifestyle coaching, developing high-end services that are both expensive and exclusive, and using celebrity endorsements to alter organizational image are examples of ideas generated through this pathway.
Path six: Look across time. Kim and Mauborgne's final path involves discerning new trends that will affect value and business models. Generally there are four types of trends: technologic, sociopolitical, demographic, and regulatory. Technologic changes are perhaps the easiest to identify but to influence market boundaries, they must also have a significant business impact, no matter how dramatic they appear. Kim and Mauborgne indicate that to be useful, a trend must: (1) be critical to business models, (2) be irreversible, and (3) have a clear trajectory. The authors cite Apple's iTunes and Cisco's development of networking hardware as two successful uses of technologic trend divination, while HBO's production of Sex and the City is cited as an example of exploiting demographic trends.
In behavioral healthcare, telemedicine is a technologic trend that certainly will affect industry business models, and increasing Medicaid expenditures is a sociopolitical trend that is also highly relevant. And the aging baby-boomer cohort is a demographic trend that will inevitably change the nature of behavioral healthcare. The establishment of telemedicine psychiatric consultation services, the development of a "Medicaid-lite" continuum of lower-cost alternative services, and the integration of behavioral healthcare into primary care settings are possible ways to translate these trends into value dimensions to create new market space.
Concluding Thoughts
The six pathways offer an unprecedented opportunity for behavioral healthcare managers to creatively develop new value curves to guide successful strategies. Kim and Mauborgne describe three basic characteristics for an effective strategy:
* Focus: A successful strategy does not address every dimension along the value curve at a high level of investment.
* Diverge: Successful strategies have value curves that differentiate the organization from its competition.
* Tag line: A successful strategy can be summed up in a sticky, pithy, memorable tag line that is clear-cut and compelling.
How does your current corporate strategy measure up to the Blue Ocean test?
Terry L. Stawar, EdD, is President and CEO of LifeSpring, Inc., a CMHC in southern Indiana. He has more than 30 years of experience as a behavioral health administrator and has more than 100 published works. To send comments to the author and editors, please e-mail stawar0206@behavioral.net.
Reference
1. Kim WC, Mauborgne R. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston: Harvard Business School Publishing, 2005.
BY TERRY L. STAWAR, EDD
TABLE 1. Comprehensive list of behavioral healthcare value dimensions
* Price
* Quality of care
* Friendly clinicians
* Friendly support staff
* Pleasant and nonthreatening experience
* Staff are easy to communicate with
* Highly credentialed staff
* Immediate availability of appointments
* Linked to service by trusted party
* Ability to see physician
* Ability to get prescriptions
* Ease of access for first appointment
* Ease of access for physician appointment
* Perceived ability of organization to help
* Full continuum of services present
* Trained staff using evidence-based practices
* Marketing effort made to referral sources
* Responsiveness to complaints
* Accurate billing statements
* Geographically accessible location
* Participation in community activities and events
* Obtaining support from the community
* Developing alliances and collaborations
* Perceived expertise
* Image
* Reputation
* Facility appearance and packaging of services
* Client and referral source satisfaction
* Treatment effectiveness
* Flexibility and responsiveness to client needs
* "Caring"
* Prestigious board of directors
* Hours and appointment times available
* Free and convenient parking
* Participation on wide range of insurance panels
TABLE 2. Key behavioral healthcare value dimensions
* Minimal out-of-pocket cost for service
* Community reputation for quality and expertise
* Appointment availability
* Good locations and facilities
* Friendly and caring staff
Stawar, Terry L.
Source Citation (MLA 8th Edition)
Stawar, Terry L. "Diving into a 'Blue Ocean Strategy': in a tight industry, it can be sink or swim for providers, but a new business strategy offers a lifeline, and maybe even new service anchors." Behavioral Healthcare, vol. 26, no. 2, 2006, p. 17+. General OneFile, http://link.galegroup.com/apps/doc/A149076106/ITOF?u=schlager&sid=ITOF&xid=758e27a2. Accessed 20 Mar. 2018.
Gale Document Number: GALE|A149076106
Blue Ocean Strategy
Patrick Buckley and Robert Colman
CMA Management. 79.1 (Mar. 2005): p6.
Copyright: COPYRIGHT 2005 Society of Management Accountants of Canada
http://www.managementmag.com/
Full Text:
Competition is fierce in most industries right now. Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant, a new book from Harvard Business School Press, suggests that, instead of competing for a share in a shrinking profit pool of over-crowded industries, strategically agile companies have to create "blue oceans" of uncontested market space through what the authors call "value innovation."
[ILLUSTRATION OMITTED]
Through the book, the authors explain that innovation must expand a company beyond the current confines of its industry. Rather than fighting for market share, companies have to create new market space. For instance, Cirque du Soleil redefined the concept of the circus as a combination of circus and theatre. Instead of competing with standard circuses head-on, it created a completely new market instead.
Although such a move, performed once, can create a valuable niche for awhile, that market space, too, will be invaded, so a blue ocean strategy requires that a company continually search for new ways to break away from the crowd.
By W. Chan Kim and Renee Mauborgne. Published by Harvard Business School Press. For more information visit www.HBSPress.org.
By Robert Colman and Patrick Buckley, CMA
Colman, Robert^Buckley, Patrick
Source Citation (MLA 8th Edition)
Buckley, Patrick, and Robert Colman. "Blue Ocean Strategy." CMA Management, Mar. 2005, p. 6. General OneFile, http://link.galegroup.com/apps/doc/A131356548/ITOF?u=schlager&sid=ITOF&xid=428fd2f5. Accessed 20 Mar. 2018.
Gale Document Number: GALE|A131356548
Blue Ocean Strategy
Willis M. Buhle
Reviewer's Bookwatch. (May 2015):
Copyright: COPYRIGHT 2015 Midwest Book Review
http://www.midwestbookreview.com
Full Text:
Blue Ocean Strategy
W. Chan Kim & Renee Mauborgne
Harvard Business Review Press
60 Harvard Way, Boston, MA 02163
http://hbr. org/books
9781625274496, $32.00, 256pp, www.amazon.com
Synopsis: In a new and expanded edition, "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant" by W. Chan Kim and Renee Maugorgne argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Based on a study of 150 strategic moves (spanning more than 100 years across 30 industries), the authors argue that lasting success comes not from battling competitors but from creating "blue oceans"--untapped new market spaces ripe for growth. "Blue Ocean Strategy" presents a systematic approach to making the competition irrelevant and outlines principles and tools any organization can use to create and capture their own blue oceans. This expanded edition includes: A new preface by the authors: Help! My Ocean Is Turning Red; Updates on all cases and examples in the book, bringing their stories up to the present time; Two new chapters and an expanded third one (Alignment, Renewal, and Red Ocean Traps) that address the most pressing questions readers have asked over the past 10 years.
Critique: Exceptionally well written, organized and presented, this new edition is a 'must' for anyone involved in any aspect of business management. Very highly recommended for corporate, community, and academic library Business Management reference collections, for personal reading lists it should be noted that this expanded edition of "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant" is also available in a Kindle edition ($17.99).
Buhle, Willis M.
Source Citation (MLA 8th Edition)
Buhle, Willis M. "Blue Ocean Strategy." Reviewer's Bookwatch, May 2015. General OneFile, http://link.galegroup.com/apps/doc/A414960501/ITOF?u=schlager&sid=ITOF&xid=0ef2c538. Accessed 20 Mar. 2018.
Gale Document Number: GALE|A414960501
AUGUST 27, 2012 · 3:05 PM ↓ Jump to Comments
BOOK REVIEW “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne (2006)
Blue Ocean Strategy has been described as a must read for all business students. A lot has been written about it and I would have said practically everything had been said about it until I looked up the book on Amazon to see the current price.
According to the book seller, the people who bought this book also bought “How to Become an Alpha Male – Attract Women and become successful at seduction.” I am still trying to work out the link!
Key words
Strategy, blue ocean, red ocean, competition, market share,
Summary
The central idea of “Blue ocean strategy” has become very prominent since it was written in 2003.
In blue oceans, competition is irrelevant because the rules of the game are waiting to be set
Companies, it claims, spend too much time fighting for the same customers in the same markets, the so called red, ‘bloodied’ oceans. The authors claim that the dominant logic in firms over the past few decades has been competition-based red ocean strategies. They have followed a mainly Porterian logic of cost cutting and taking market share from their competitors. If they really want to succeed they should look for new blue oceans i.e. they should offer new products and services or find new customers. By moving into this “untapped market space” companies can find “opportunity for highly profitable growth.”
Harvard AMP Books
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As the authors say, there is nothing new about this. General Motors, unable to compete with the low cost of the Model T Ford find new customers by differentiating under the slogan ‘A car for every purpose.’
More recently, South West Airlines, Ryan Air and Easy Jet have all created new customers with their low cost model. Cirque du Soleil and Starbucks have grown by offering a different value proposition to their customers. Their message is that companies should focus on the big picture rather than just the numbers and an immediate return on investment.
The book is also nicely summarized in this short video.
So, should you buy the book? Well, it is an excellent study based on 100 years of competition and 30 different industries. It is also quite a nice read. Indeed, their ideas are so clearly put and so logical that it is hardly surprising that it is so often quoted it strategy meetings. It is probably a good idea to at least know what your boss is talking about what he goes in a rant about needing to “get the hell out of the red ocean and into a blue one.” And if you like having books to refer to it is a nice one to have.
To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategic focus from competitors to alternatives, and from customers to non-customers of an industry
However, most of the ideas can be understood from the HBR article of the same name (though the book will give you much more information on strategic execution.) If your business school or university has a search engine such as ABI Proquest or Business Source Completeyou can download it for free. (Don’t worry, your library has paid a small fortune for these search engines, so it in NOT stealing!)
If you really want to buy the book, perhaps you could ostentatiously read it while you’re waiting for a job interview. Take your time before putting in into your bag when you finally get called in. Be careful though, you might just get asked why you haven’t read it before! Still, if you don’t get the job you can always go back to reading “How to Become an Alpha Male – Attract Women and become successful at seduction.”
Interesting quotes from the book:
“The only way to beat the competition is to stop trying to beat the competition.”
“In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.”
“Instead of focusing on beating the competition, they focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.”
“Value innovation is based on the view that market boundaries and industry structure are not ‘given’ and can be reconstructed by the actions and beliefs of industry players.”
“To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategic focus from competitors to alternatives, and from customers to non-customers of an industry.”
Jim Lewcock
September 06, 2016
How long?
2-3 minutes
Book review: Blue Ocean Strategy by Chan Kim and Renee Mauborgne
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Book review: Blue Ocean Strategy
Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant.
By Chan Kim and Renee Mauborgne.
Published by Harvard Business Publishing.
Reviewed by Jim Lewcock, founder and CEO, The Specialist Works.
Buy
This is not a book review. It’s an invitation to change your thinking. Perhaps it’s a cult. Certainly the reinvention we have all been waiting for.
Have you ever wondered what actually caused all this mess of alleged corruption and client distrust in the first place?
A bloody Red Ocean, that’s what. If you operate in shark infested waters pitching against the same people with the same services you eat away at each other’s margin.
This is compounded by our industry obsession for anything automated, wonky reporting systems and gnarling procurement teams.
But there is a way out. And it’s called Blue Ocean Strategy.
A book written by two hugely inspiring INSEAD professors, decorated in global business accolades. Their 10-year research covers 150 strategic moves across 30 industries.
It lists brands such as Apple, IKEA, Amazon and Virgin Atlantic who have created new ways to win customers. And the authors have captured a simple formula behind this apparent disruptive activity.
Instead of trading on price or quality (such is the usual way), this entrepreneurial proposition combines low cost with innovation of the product or service. And this is called the ‘value-innovation’ proposition.
Take the i-Phone. Beyond the phone calls it also gave huge choice and easy access to low cost music, plus a better way to take and store photos. It’s now an infamous presentation by Steve Jobs – he literally launched three products in one night. The masses joined the computer geeks in their love of using Apple products.
This created new market space and new customer demand for Apple, making the competition irrelevant. And this sums up Blue Ocean Strategy.
The process of Blue Ocean Strategy is to create and increase elements of positive customer experience to differ from the competition and to reduce or drop the parts that have been taken for granted but are not deemed necessary in the market sector.
In other words saving money in the "so what" parts and re-investing where you delight through difference. But this cannot be done piecemeal. The whole business must be aligned to deliver value-innovation.
IKEA is a perfect example – bringing Swedish design to the masses and a totally new shopper experience. And as you exit the store you can buy a cheeky hot dog for 60p and with it a reassurance about all those strange bargains literally bagged.
Only catch, you have to build the IKEA products yourself and be the keeper of odd shaped keys for eternity. So Blue Ocean!
The appeal of this book is that you can quickly grasp the vivid red and blue metaphors and apply this to your own experience.
Premier Inn lost the jazzy reception desk, gave you the best night’s sleep of your life and breakfast fit for a king. Blue Ocean.
AirBnB. Achingly Blue Ocean.
So what about the advertising world we live in? Surely the principles of Blue Ocean Strategy are already engrained in our people? Value-innovation (or bang for buck) is after all the key to advertising.
Not so! It’s a big fat red ocean. We chase the wrong things that don’t deliver true value. When demand outstrips supply how can it? Beware the sexy channels and seek value-innovation in different channels and services.
I took a few leaves from this book – followed the client tills (of performance) and not the media trends and focused on creating new value-innovation propositions.
Now, in part thanks to this book, the make up of our agency model looks very different.
How do I know that? Because we sell over half our services to other agencies. To all those clients or agencies stuck in Red Oceans and lacking difference, you must read this book. Reinvent yourself. Align your whole company to the pursuit of delivering true value-innovation.
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Read more at https://www.campaignlive.co.uk/article/book-review-blue-ocean-strategy-chan-kim-renee-mauborgne/1405565#EpKG2zEcSZISbjP5.99
Book Review: ‘Blue Ocean Shift: Beyond Competing’ by W. Chan Kim and Renée Mauborgne
By Barbara Danza, Epoch Times
March 17, 2018 10:47 am Last Updated: March 17, 2018 10:50 am
‘Blue Ocean Shift—Beyond Competing’ by W. Chan Kim and Renée Mauborgne. (Hachette Books)
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The authors that penned one of the most popular business books of recent times—“Blue Ocean Strategy”—are back on bookshelves with “Blue Ocean Shift: Beyond Competing, Proven Steps to Inspire Confidence and Seize New Growth.”
In their groundbreaking original, strategy professors W. Chan Kim and Renée Mauborgne taught businesses how to “make the competition irrelevant” and coined a now commonly used marketing term, “blue ocean,” that is a market free of “bloody” competition. (A highly competitive marketplace is referred to as a “red ocean.”)
Kim and Mauborgne taught leaders how to create uncontested market space for their businesses. “The only way to beat the competition,” they explained, “is to stop trying to beat the competition.”
This refreshing concept turned business axioms on their heads and encouraged innovation and creativity among start-up entrepreneurs and Fortune 500 executives alike.
“Shift,” while lacking the groundbreaking nature of its predecessor, goes deeper, providing a thorough review of the original blue ocean philosophy and then shifts to the application of the strategy. The latter is where the new book shines.
Through numerous inspiring examples and detailed, practical steps, “Shift” explains the “how” that the original “Blue Ocean Strategy” may have been missing.
To make a blue ocean shift, the authors outline the following five steps:
Get started by choosing your target and constructing your team
Get clear about the current state of play
Imagine where you could be
Find how you get there (using their provided analytical tools)
Make your move
A valuable read for a variety of business people, from small business owners to corporate executives, from nonprofit volunteers to solopreneurs, “Blue Ocean Shift” offers a detailed framework through which to analyze efforts.
At times a bit cumbersome, the book may make readers scan pages to get to those elements that apply to them, and fans of the original may find this a lackluster sequel, but useful.
Regardless, the overall philosophy and practical analysis provide fundamental thinking for any individual working to make an impact in their space. Someone looking for a comprehensive understanding of marketing strategy would do well to start with “Blue Ocean Shift.”
‘Blue Ocean Shift’
W. Chan Kim and Renée Mauborgne
Hachette Books
432 pages; hardcover, $34
MAY 22, 2015 BY ALISON VIDOTTO
Book Review – Blue Ocean Strategy, W. Chan Kim & Renée Mauborgne
2015.05.22_Blue Ocean Strategy
The tag line of this book says it all; How to Create Uncontested Market Space and Make the Competition Irrelevant.
This book talks about using innovation rather than aggression to compete in the market place. It is full of fresh and interesting ways to look at your business strategy.
Many small business owners shy away from competition, this book encourages you to think a little outside the box in your approach to building the business.
Let me briefly explain the Blue Ocean Strategy:
When business owners are looking for customers they tend to compete in the familiar market. When times are tough or as the number of competitors grow the business owners’ compete harder against each other for a share of the market. If you use the analogy of sharks fighting over the same fish, the surrounding ocean is soon red with blood.
Now if the sharks were to move away from that section of ocean where the fish are few and the competition is fierce, they would soon enter a fresh patch of Blue Ocean that is filled with lots of fish and little to no competition.2015.05.22_Blue Ocean Strategy_1
Like the shark, the business owner can leave the highly competitive pool and create their own patch of Blue Ocean.
I’m sure you’re like me and thinking ‘that sounds great, but easier said than done’. The authors have also taken this into account, the book gives you lots of information based on years of research.
Blue Ocean Strategy also give great examples of how a business can find their own blue ocean. The best example is the amazing Cirque du Soleil. In the times of Ringling and Barnum & Bailey the animal filled circuses were struggling and competing heavily with each other. Cirque du Soleil completely turned around the customer experience of circus by combining it with theatre and removing the animals. It was uncharted waters and was an enormous hit.2015.05.22_Blue Ocean Strategy_2
The keys to building a Blue Ocean Strategy are outlined in the book along with frameworks and other guidelines to change the mindset from fierce competition to expansion and innovation that gives great value to the customer.
The main take away from this book is how to change your mindset and view the much bigger picture when you are facing challenging times as most businesses owners do at some point.
Not only is this book an interesting read, it a valuable tool for business owners who would like to grow their business. logo_amazon