Blue Ocean Strategy: What is it?
See “Riding the wave of boundless success” (page 13, business)By Jon Fernquest
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For some, the name of this new business strategy “Blue Ocean” may sound like a new brand of detergent for washing clothes or dishes, but the credentials of the authors and publisher are excellent. Insead, Boston Consulting Group, and Harvard Business School are among the best business schools and consulting firms in the world.
The Blue Ocean companies studied “made the competition irrelevant and created an uncontested market space with the limitless potential of a blue ocean.” The Red Ocean companies made the “mistake of battling for success in a bloody red ocean of rivals fighting over a shrinking profit pool. In the red ocean, industry boundaries are defined and accepted, prices are driven lower and the competitive rules of the game are known. As the market space gets increasingly crowded, prospects for profits and growth decline.”
Given these definitions of the red and blue ocean strategies, here are three tasks for helping you systematically read and understand the article:
1. What companies and products do they mention? What was the key to their success?
2. Find the differences between the Red Ocean and Blue Ocean strategies. (Hint: they are in the second column of the article.
3. Think of ways that small business people in Thailand can put these ideas into practice. If you dream up a good idea, won't someone just copy you? Is there really any way to protect your ideas? What happened to The Body Shop's competitors?
Vocabulary (in discussion above)
inspirational - the enthusiasm that someone gives you to search for new and creative ideas.credentials - information about a person that shows that they are qualified, like where they work, their education, and their accomplishments
detergent - liquid or powder for washing things
Vocabulary (in the article)
head-to-head competition – very intense competition (like two horses finishing closely at a horse race)market share – the percentage of a market that a company has, for example a 50% market share
differentiation – product differentiation
come to the fore – become important or popular
signify that – mean that
ripe for growth – ready for growth, growth is likely to happen soon
obsolete – not needed anymore because something better has been invented
unleashing new demand – doing something to make this new demand which is just waiting to happen, actually happen
systematic – done thoroughly and efficiently with a plan
replicate – repeat what someone else has already and get the same results
over-saturated market – market filled with too many competitors
skyrocket – move upwards very quickly like a rocket
Fortune 100 companies – the top 100 companies in the United States (See Wikipedia:Fortune500)
benchmarking the competition – comparing your performance with leading companies to improve your performance.
intimidated – other people frighten you, so you lose confidence
segmenting customers – market segmentation, grouping customers into groups with similar buying habits so you can change your product to meet their needs (See Wikipedia:Market_segment)
unconventional – an unusual and surprising way to do something -
level the playing field - make it easier for everyone to compete, make the competitive situation the same for everyone
landmark work – important work
put ideas into practice – use the ideas that you usually only think about, to actually do something
the big picture – the overall view of something (the opposite of focusing on the details)
More things to do
For further reading check out the online interview with the authors and the presentation (in a pdf file).
Also check out some other relevant sites like WIkipedia:Imagineering and Wikipedia:Mass_customization. Note that the last item on the Mass Customization page is package holidays (or package tours) in the tourism industry which could be a good focus for thinking about Blue Ocean Strategy in Thailand.
