Saturday, October 23, 2004

Blue and Red Ocean S.

W. Chan Kim and Renée Mauborgne in HBR of Oct 2004 don't deny that competition matters. But they do say that by focusing on competition and "competitive advantage" markets have become crowded and bloody and are looking like 'Red Oceans' as Kim and Mauborgne call them. Indeed they have a point if they claim that scholars, companies, and consultants have somewhat over-focused on 'competitive edge' and in doing so ignored 'Blue Ocean strategy':

"So why the dramatic imbalance in favor of red oceans? Part of the explanation is that CS is heavily influenced by its roots in military S. The very language of S. is deeply imbued with military references—chief executive “officers” in “headquarters,” “troops” on the “front lines.” Described this way, S. is all about red ocean competition. It is about confronting an opponent and driving him off a battlefield of limited territory. Blue ocean S, by contrast, is about doing business where there is no competitor. It is about creating new land, not dividing up existing land. Focusing on the red ocean therefore means accepting the key constraining factors of war—limited terrain and the need to beat an enemy to succeed".

Unfortunately the authors do not give much specific tools on how we can create and develop such Blue Oceans. We'll have to wait for their forthcoming book. If you don't want to wait you can find such tools plus a further review of the article here: Blue Ocean S.