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Handling contest efficaciously to get appreciable market share and achieve profitability has always been a great challenge to most companies. This is why I want us to thoroughly and closely question or examine this book entitled “Blue Ocean Strategy”. It is co-authored by Chan Kim and Renee Mauborgne. Kim is the Boston Consulting Group Bruce D. Henderson chair professor of Strategy and International Management at INSEAD; while Renee Mauborgne is the INSEAD distinguished fellow and professor of Strategy and Management. According to Kim and Mauborgne, companies have long engaged in head-to-head contest in search of sustained and profitable growth. They add that companies have fought for competitory advantage, battled over market part and was struggling for differentiation. The writers say yet in today’s overcrowded industries, competing head-on results in not one thing but a “red ocean” of rivals fighting over a shrinking net profit pool. Kim and Mauborgne challenge everything one may recognise when it comes to the necessaries for strategic success and contend that while most companies compete within such red oceans, the scheme is growingly improbable to formulate profitable growth in the future. These writers say based on a study of 150 strategic moves spanning more than a hundred and thirty industries, tomorrow’s leading companies will succeed not by battling competitors, but by creating “blue oceans” of uncontested market space ripe for growth. Kim and Mauborgne submit that such strategic moves tagged “Value innovation”, give rise to powerful leaps in value for both a firm and it is buyers, and unleash new demand. These writers make sure that this text offers you a systematic approach to staying in front of competition. They present a proven analytical framework and the tools for with great success creating and capturing blue oceans. The text highlights the six principles that each company may adopt to with great success invent and carry out blue ocean strategies. Kim and Mauborgne say these six principles guide on how to reconstruct market boundaries, focus on the huge picture, reach beyond existent demand, get the strategic right, win a victory over organisational hurdles and build execution into strategy. The text has three elements of nine chapters. Part one is entitled “Blue ocean strategy” and holds two chapters. Chapter one is tagged “Creating blue oceans”. According to Kim and Mauborgne here, it will always be important to swim with great success in the red ocean by out-competing rivals. They expatiate that red oceans will always matter and will always be a fact of business life. These writers say but with supply exceeding demand in more industries, competing for a part of contracting markets, while necessary, will not be sufficient to sustain high performance. In their words, “Companies need to go beyond competing. To seize new net profit and growth opportunities, they also need to invent blue oceans. Unfortunately, blue oceans are for the most part uncharted.” These writers say altho the term “Blue ocean” is new, it is existence is not and it is a feature of business life, past and present. Kim and Mauborgne educate that in spite of the fact that economic conditions indicate the rising of the utmost importance of blue oceans, there is a usual faith that the odds of success are lower when companies effort beyond existent industry space. They add that the issue now is how to succeed in blue oceans, stressing that if one lacks understanding of the opportunity-maximising and risk-minimising principles driving the creation and capturing of blue oceans, the odds will be lengthened versus one’s blue ocean initiative. Chapter two is based on the subject matter of analytical tools and frameworks. These writers say we have expended the past decade developing a set of analytical tools and frameworks in an undertake to make the formulation and execution of blue ocean system as systematic and actionable as competing in the red waters of known market space. Kim and Mauborgne stress that these analytics fill a central void in the field of scheme that has devised an impressive array of tools and frameworks to compete in red oceans, but has remained nearly silent on practical tools to excel in blue oceans. “Instead, executives have received calls to be brave and entrepreneurial, to learn from failure, and to seek out revolutionaries. Although thought-provoking, these are not substitutes for analytics to navigate with great success in blue waters,” disclose these authors. Kim and Mauborgne add that in the absence of analytics, executives can not be expected to act on the call to break out of existent competition. They stress that effective blue ocean scheme will have to be in regards to risk minimisation and not risk-taking. Part two is summarily tagged “Formulating blue ocean strategy” and covers four chapters, that is, chapters three to six. Chapter three is entitled “Reconstruct market boundaries”. According to these experts here, the primary principle of blue ocean scheme is to reconstruct market boundaries to break from the contest and fabricate blue oceans. They say this principle addresses the search danger a lot of companies struggle with. Kim and Mauborgne submit that the challenge is to with great success identify, out of the haystack of possiblenesses that exist, commercially-compelling blue ocean opportunities. In chapters four to six, these writers talk about the conceptions of focusing on the big picture, not the numbers; reaching beyond existent demand; and getting the strategic sequence right. Part three is generically christened “Executing blue ocean strategy” and holds three chapters. According to these writers in chapter seven entitled “Overcome key organisational hurdles”, once a company has developed a blue ocean system with a profitable business model, it will have to carry out it. They add that the challenge of execution exists, of course, for any strategy. Kim and Mauborgne assert that companies, like individuals, ofttimes have a tough time translating thought into action whether in red or blue oceans. The writers say but equated with red ocean strategy, blue ocean system represents a significant departure from the status quo as it hinges on a shift from convergence in value curves at lower costs. They add that this raises the execution bar. In chapters eight and nine, Kim and Mauborgne analytically X-ray the conceptions of building execution into scheme and the sustainability and renewal of blue ocean strategy. Stylistically, the text is a success. For instance, the choice of words employed in this text is very comprehensive and the well-researched concepts, brilliantly articulated. The creative thinking of these writers is confirmed by the highly suggestive and visually communicative cover design reinforcing the major subject matter of blue ocean strategy. Kim and Mauborgne meticulously use graphics for the aim of visually heightening understanding of readers. The title of the text is metaphoric and appealing. Also worthy of note is the use of paradox in the text to tax readers mentally. For instance, these writers say companies must stop competing with each other, peculiarly that the only way to beat contest is to stop attempting to beat the competition, amidst other things. However, a good deal of ideas seem repetitious in the text. Probably Kim and Mauborgne deliberately utilize this style to invent special importance and significance and reinforce readers’ understanding. On the whole, the text is good for every one and organisations that are prepared for enduring success through strategic cognition of how to take extra steps to achieve business growth and profitability. |
Value Innovation – scheme book of the year 2005?