Chan Kim was a professor and Renée Mauborgne was a student. Instead, we need to escape the red ocean of bloody competition altogether… by sailing towards pristine blue oceans of open market space.īy following Blue Ocean Strategy, we can break established market boundaries to create breakthrough products like the Ford Model T, Nintendo Wii or Apple iTunes. So what’s the solution to these modern problems? Most business strategy tries to help us compete harder, but the authors of Blue Ocean Strategy say that is not the answer. Yet today the smartphone market is crammed with options, from $100 budget phones to $1000 premium devices. For example, when the iPhone was first released, it was a brand new concept with no direct competition.
This causes customers to shop based on price and dramatically shrinks profit margins. As an industry matures, competing products become more and more similar to each other. This leads to a few large winners like Amazon. Today we are often competing against the whole world. 50 years ago most companies needed to compete with other local or domestic companies. This means big companies can quickly release more and more products into the market. Improved technology allows companies to streamline their research, design and manufacturing. The authors of Blue Ocean Strategy say there are 3 reasons for this trend: It’s no secret the business world is getting more competitive each year. Have you ever thought of an exciting new business idea… only to look online and discover 12 other people have already done it? D’oh!
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