Book Review: Blue Ocean Strategy

Management Gurus W. Chan Kim and Renee Mauborgne have presented a critical strategic management approach for today’s global competitive environment in their international bestseller, Blue Ocean Strategy: How to Create Uncontested Marketspace and Make the Competition Irrelevant. The book, which debuted in 2005, is a must read for any corporation today. Resting upon four “formulation principles” and two “execution principles,” Blue Ocean Strategy teaches the reader to create uncontested market space and break away from bloody competition by strategically moving into the area the authors call the “Blue Ocean.”

An example of its application to put the book/ strategy in context is the Nintendo’s newest game console Wii which unlocked a ‘blue ocean’ of new market space of whole new mass buyers – Adults including senior citizens that never before played video games. This enabled it to bypass the bitter competitive rivalry with the Sony Playstation and Microsoft Xbox. As many of the world’s leading growth companies showcase their success in exploring Blue Oceans (eg. Apple, Google etc), such examples are far and few in between in Muslim world economies. However, an example to note would be, Bangladesh based Grameen Bank which has created a blue ocean in finance industry by focusing on once non-customers of banking and finance – the poor. Another one would be Malaysia based AirAsia who has successfully implemented a business model to capture an untapped budget travel market in the travel industry.

Challenging the focus on Market Share wars

Management strategies, corporate strategies and marketing strategies: any strategy crafted by a corporation traditionally focuses on profit-maximization. Increasing the wealth of a firm is strongly related to capturing revenue through market share. The golden rule of business denotes that the higher the market share, the larger the revenue stream – consequently, the greater the wealth of the firm (provided there is constancy of market prices). Blue Ocean Strategy challenges this notion by forcing firms to create new a market space and in many cases, work parallel to the competition.

Obviously, this overhaul of ideas would entice strong resistance to change by corporations who have become accustomed to their practices (as they comfortably match their competitors’ ideals) and continue to contest for market share. Such a strategy would only serve to increase costs, cause conflict amongst staff and diverge from the corporation’s vision.

In the introduction to Blue Ocean Strategy, readers will find that this is hardly the case, and though there would be hurdles to overcome when executing the “Blue Ocean Strategy” (as hurdles would be inherent in any strategy), appropriate sub-strategies would have to be implemented for the successful creation of demands for new products or services.

Most importantly, the book highlights that the “Blue Ocean Strategy” is not a new concept. The growth of unique industries and the ever-changing lifestyles that are enjoyed by various communities around the world is proof that many corporations have successfully adopted and implemented “Blue Ocean Strategies” in the past and that the potential of creating uncontested market space in the future is most certain, provided corporations follow the intricate formulation and execution principles. The book talks about the business world 30 years prior to its publication and forecasts the growth of the “Blue Ocean Strategy” as an integral part of corporate reform for the next 3 decades.

Four Actions Framework


How to Create Uncontested Market Space and Make the Competition Irrelevant

The book is intricately designed to walk through the process of its six principles and teaches the reader how each principle is able to reduce risks inherent in any new strategy. Blue Ocean Strategy is not only a book to read but a strategy to adopt and implement for corporations that are determined to succeed in the long-run.

The six principles that fall under the formulation and execution building blocks are designed to reduce various risks in adopting a new approach to business. Even for the most risk-averse business owner, a well-formulated “Blue Ocean Strategy” cannot be ignored.

To fortify this understanding, the authors wove in various case studies and true success stories to reinforce several points. First, they these cases create a familiarity within the reader who, as a consumer, is able to relate to certain cases such as of Cirque du Soleil®, Starbucks® and Curves®, and observe how consumers are affected by the “Blue Ocean Strategy.” Second, the reader is able to visualize the strategy as it is crafted in “opposition” of competition, by using its suggested managerial tools such as “The Strategy Canvas” and “The Four Actions Framework.” Lastly, the Book substantiates proof that Blue Ocean Strategy has existed since the 30s and that it is an ongoing process for the firm rather than a one-time strategy that will outlast competition.

The Waves of Blue Ocean Strategy

Kim and Mauborgne present Blue Ocean Strategy as part of strategic management, being a long-term focus rather than an intermediate route at a problematic juncture. The strategy is comprehensive and takes a macro approach towards how the strategy should be formulated, implemented and nurtured to its success. At the same time however, the authors present cases endorsing that corporations who ride the Blue Ocean wave will succeed in a shorter time-frame compared to those who continue to battle with competition in the shark-infested red waters. They do not discount the macro approach to Blue Ocean and assert that a misinterpretation of the formula or a miscalculation during its implementation will inevitably lead to failure.

The strategy concentrates on value innovation, which reduces costs for corporations. Instead of focusing on outdoing competition, the book advises corporations to use managerial tools such as “The Strategy Canvas” to identify voids in customer values. The book presents multiple cases validating how companies easily overlook opportunities to cater for valuable services concerning their existing and potential clients. This usually happens because decision makers in a company are absorbed with battling head-on with competitors rather than shifting their focus on clientele-oriented values. To be better acquainted with existing and potential clients and their values, the authors strongly advocate that top management descend to the grass-roots of their industries to blend in with their consumers and understand their trends. Furthermore, many corporations tend to outsource their marketing research to specialist marketing intelligence. This, according to Blue Ocean Strategy, is a detrimental approach to understanding the market and creating uncontested market space.

The Strategy Canva


Besides challenging the norm of competing with rivals, Blue Ocean Strategy also challenges several other perceptions of new business strategies. Increase in product value and services do not necessarily require technological advancements. A successful “Blue Ocean Strategy” is seen to rely on existing resources and in many cases, allow companies to cut down on further resources.

Finally, Blue Ocean Strategy emphasizes the importance of interpersonal office skills in executing a successful new strategy. Employees are often sidelined during decision making and are generally not treated with the appropriate respect and humanity deserving of employers.. The authors caution the reader that employees and office politics are not only strong determinants of the strategy’s success but can also lead to failure even before the strategy takes off.

Although written in simplified English, the book retains a text-book feel because of its technical terminology. The authors provide numerous examples and case studies to ensure the understanding of readers who are not necessarily familiar with managerial terms. Additionally, their multiple illustrations and steps under each principle allow readers to observe and learn the different phases of crafting a strategy.

A Must have Tool for the Next Generation of Business Leaders

Blue Ocean Strategy has already benefited numerous companies and has received stellar reviews. Its authors have already been listed amongst the top 10 most influential thinkers of 2007 (The Thinkers 50 biennial poll of business thinkers.) The Strategy has emerged as one of the most important business strategy in the new globally competitive markets. An evidence of that is the acknowledgement of this business strategy by senior executives in China as a ‘Top 10 China Management Practices’ (source: Chief Executive China, the largest-circulation management magazine in mainland China’s ‘Fourth Annual Top 10 China Management Practices.’)

Business leaders in the Muslim world economies seeking global/ regional competitiveness cannot afford to ignore the ‘Blue Ocean Strategy.’ There are some encouraging signs certainly. Deputy Prime Minister of Malaysia Datuk Seri Najib Tun Razak is known to be a big supporter of the Blue Ocean Strategy. In an interview in Malaysia Star newspaper it was noted that he liked the book so much that he ordered 30 copies for members of his staff. We hope this and other such support will lead to many Blue Ocean Strategy successes from the Muslim World.