Blue Ocean Strategy

A strategy can be thought of as "a plan to achieve a specific goal". So if we have plans, then we can create a strategy. But there are many planning tools, so we need to make the time to evaluate those available planning techniques, and to measure their effectiveness. That will give us tools which enable us to work in practical and entrepreneurial ways, and to create a strategy (Mebert & Lowe, 2017, p. 20).

Long time writers and academics in the field of entrepreneurship and strategy, Kim and Mauborgne have proposed many other ideas, but Blue Ocean Strategy (2004) really caught fire. In the first paper on Blue Ocean, they explored what Guy Laliberté, the then CEO of Cirque du Soleil, focused on when creating a new form of circus extravaganza for a new audience, those who were never traditional circus customers. Guy simplified the circus offer: one ring instead of three; having no animals; hiring amazing acrobats; and telling stories through performance... with a more profitable, safer, and repeatable result (Kim & Mauborgne, 2004). The essence of circus was bottled, sold and resold. It meant that Cirque de Soleil was no longer competing - shark against shark - in a red, bloody ocean; they had now created an entirely new ocean which they could dominate (2004). How they did that (by determining the essence of circus; by stripping away extraneous features; by reducing cost) enabled them to be the biggest shark, swimming uncontested in their own blue ocean (Kim & Mauborgne, 2004).

Kim and Mauborgne named this idea - simplification, seeking a new audience - a Blue Ocean Strategy. Nine key insights can be found in Kim and Mauborgne's work by Instaread (2016, p. 7):

1. "The blue ocean strategy empowers organizations to create entirely new markets for themselves instead of battling competitors in increasingly crowded territory"
2. "A red ocean business typically focuses its strategy on beating the competition"
3. "When creating a blue ocean strategy, decision makers must consider four questions, each relating to improvements or eliminations that can be made in comparison to others in the industry"
4. "Blue ocean businesses do not allow themselves to be stymied by industry conventions and structure"
5. "Execution is critical to a successful blue ocean strategy"
6. "A blue ocean strategy can only be successful when optimized for profitability"
7. "Good blue ocean leaders are able to overcome the main obstacles to execution inside their organization"
8. "The ability to construct a blue ocean strategy has never been more important than it is now because users and consumers are increasingly causing industries to shift and change"
9. "No company can permanently remain in the blue ocean without renewing and revising its long-term vision".

Seeking and finding a blue ocean is a very clever strategy. The blue ocean strategy applied by Cirque de Soleil left traditional circus largely dead. While it sounds simple, it requires perception, analysis and accuracy. 

Getting from the essence of something into a full entrepreneurial plan remains incredibly difficult.

Sam

References:

Instaread. (2016). Guide to W. Chan Kim's et al Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Author.

Kim, W. C. & Mauborgne, R. (2004). Blue Ocean Strategy. Harvard Business Review, 82(10), 76-84.

Mebert, A., & Lowe, S. (2017). An Analysis of W. Chan Kim and Renée Mauborgne's Blue Ocean Strategy: How to Create Uncontested Market Space. Routledge.