Blue Ocean Strategy: How to create uncontested market space and make competition irrelevant
By W. Chan Kim and Renee Mauborgne
Harvard Business School Press (February 3, 2005)

Summary

Presents a method, called a Strategy Canvas, of looking at an opportunity space. This strategy canvas lets strategists depict the most relevant similarities and differences between businesses and identifies areas for strategic differentiation. The authors present the strategy canvas, and methods to create and use the canvas, as a powerful means to create business value by finding the 'Blue Ocean' where you can set the terms of the competition.

Rating and opinion

It would be an interesting study to determine what makes a business book so popular, which Blue Ocean Strategy certainly is. It is the quality of the insight and analysis? Is it quality and reputation of the authors, or the quality of the writing? Is it coming up with a simple, powerful easily remembered phrase? The success of Blue Ocean Strategy would certainly indicate that it's this last element that is most important.

While BOS presents some interesting concepts, and, to its benefit, makes a strong case for thinking really hard about your strategy, it is hard to take it as serious when one of the three characteristics of a good (their term - why not great?) strategy is 'have a compelling tagline'. One immediately thinks - are they serious?

There are many lapses in logic. For example, on page 42 when they define an 'incoherent strategy' as one that zig-zags "low-high-low-high ...". What is apparently not realized is that this pattern is totally determined by the arbitrary order of the labels on the X axis of their strategy canvas. The most overriding question one has in reading this book is if the companies they describe really used their method? It is hard to imagine that Cirque du Soleil's founder, a street performer who had a 'aha' insight and built the business through determination and force of personality and will, would really sit down and take the time to follow the prescriptions of this book.

And this indicates the biggest problem with Blue Ocean Strategy. The type of post-hoc analysis of successful businesses that BOS promotes suffers from extreme survivorship bias. When you retroactively evaluate successful businesses and determine that they really did discover a new 'value curve' you ignore the thousand other businesses that thought just as hard and came up with what they believed was their differentiating strategy - their Blue Ocean - and failed. It's not enough to say that it's important to build a strategy canvas with new value attributes and a new value curve. The most important aspect is to determine what these new value attributes should be should be. This is the hard part! While BOS lists some general 'things to pay attention to' and gives their 'Four Actions Framework', there are no real insights into how to create these new, different attributes (that no one else has ever though of). More importantly, how do you know that you have them right?

These flaws make this book not only inaccurate and irrelevant but also counter-factual. It's hard to recommend a book with these flaws no matter how popular it is.

Related

Read as Well:

Read Instead: The Strategy Paradox; Fooled by Randomness; The Black Swan

Footprint

256 pages
Time to Read: 1.5 nights
Content Density: 10% (poor)
Interest Factor: Low