Sun Tzu & Business: Quote of the Week
“Be where your enemy is not.”Sun Tzu, The Art of War
A Quick Revisit to Blue Ocean Strategy.
One of the most interesting books I have read on strategy was “Blue Ocean Strategy” by W. Chan Kim. I routinely reread sections and refresh my memory on this creative and insightful way too approach the markets and competition. Our Sun Tzu quote of the week sums up this unique market strategy, and below is a summary.
What Exactly Is Blue Ocean?
The term “blue ocean” was coined in the entrepreneurship industry in 2005 to describe a view of new markets with little competition or barriers. When a new or unknown industry or innovation appears, it creates a vast “open ocean” of market options and opportunities for creative innovators.
In their book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, INSEAD business school professors W. Chan Kim and Renee Mauborgne coined the term “blue ocean” (2005). Blue oceans, according to the authors, are markets with high potential profits and with the overall strategy, entrepreneurs can find uncontested voids where their businesses can prosper.
Key Points on Blue Oceans
- A blue ocean is defined as an untapped or uncontested market space in marketing terms.
- W. Chan Kim and Renee Mauborgne coined the term in their book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.
- Blue ocean firms are often leaders in their fields.
- Blue oceans are distinguished from “red oceans,” which are characterized by fierce competition and crowded markets.
- Kim and Mauborgne wrote about 150 blue ocean strategies implemented by companies
How Does a Blue Ocean Work?
Companies in an established industry compete for every available piece of market share. The competition is often so fierce that some businesses cannot survive. This industry type depicts a red ocean, a saturated market bloodied by competition, where organizations fight for small slices of the overall revenue share.
Blue oceans provide the inverse. Many businesses decide to innovate or expand in the hope of finding a blue ocean market with no competition. Blue ocean markets are also very appealing to entrepreneurs, and typically the creative innovators find great success within “The Blue”..
Blue ocean markets have several characteristics that attract visionaries. There are no competitors in a pure blue ocean market. A business leader in a blue ocean market has first-mover advantages, cost advantages in marketing without competition, the ability to set prices without competitive constraints, and the flexibility to take its offering in various directions.
Business leaders who can identify blue ocean markets and develop innovative products and services have limitless opportunities.
You can read more about Blue Ocean Strategy at their website here: What is Blue Ocean Strategy?