Saturday, January 9, 2010

The Blue Ocean Strategy

Wild Wadi Dubai

I have to admit that this picture brings back some good memories, for that I will be using it today in my post about the Blue Ocean Strategy.

The Blue Ocean Strategy is a book by W. Chan Kim and Renée Mauborgne. In our picture, the open sea is full of opportunities and surrounded by the borders of the present. Similarly The Blue Ocean Strategy is about new opportunities that are yet to be discovered.

According to the book,the market is divided into two parts:
  • Red Ocean: Current market, many players and competition is all about lowering cost to earn more revenue, this leads to -cut throat- low prices; hence the ocean is full of blood (Red).
  • Blue Ocean: New market space, value innovation, breaking the quality-cost trade off and competition is irrelevant because the rules of the game are waiting to be set.
The Blue Ocean Strategy was the fruit of an intensive research through unconventional success stories across many industries to look for common factors in their success stories. The authors tried to summarize these common factors as a number of systematic tools and methods that focus on creating new customers and new opportunities. Four key words are to be used; Create, Raise, Reduce and Eliminate. The good part I like about The Blue Ocean Strategy is that it is unrelated to the type of the industry, for example it can be utilized even in a circus!

A Blue Ocean example that really impressed me is CNN:
It was in 1980 when Turner created the first real time news station in this world, at that time he was trying to focus on making something different and he decided to launch a 24/7 news channel. Many people made jokes about Turner and CNN, betting he will loose very soon.
Turner said with words that are full of passion:
"We won't be signing off until the world ends. We'll be on, and we will cover the end of the world, live, and that will be our last event... and when the end of the world comes, we'll play 'Nearer, My God, to Thee' before we sign off."
CNN continues its success story till this day, it even inspired others to launch competing 24/7 news channels.

We now know where to start, google Blue Ocean Strategy and try to utilize it in your upcoming business.

* Bonus: You can use this website to order any book (including The Blue Ocean Strategy) FREE shipping to any place in the world!
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