Book Review: Blue Ocean Strategy

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant This book has got to be one of the best business books I’ve ever read, and I’ve read quite a few in the past few years.

Is it because it’s exciting, thrilling, and make you sit at the edge of your Starbucks lounge-lizard-by-the-fireplace seat? Nope. Is it filled with witty euphimisms, or witty anything? Hardly. Does it make me want to be a better man, business- or otherwise? Um… no.

Why is it, perhaps, the best business book on the planet, then?

Because it tells you, analytically, without apology, when your “great idea” either stinks or has the potential to rule the world (for a short time anyway).

Kim Mauborgne writes this book like a textbook from college. It’s not that difficult to read, it’s just really REALLY dry. The thing is, that kind of stuff gets me going. I was the kid in school who wanted to read those big thick strategy textbooks. So, after the first few chapters, this thing really hit me.

By the time I wrote all my notes, made drafts which I will now fill out when I come up with my “brilliant ideas” prior to running with them, and analyzed all my previous projects, businesses, and companies I worked for, I hadn’t even hit the good stuff yet.

Want the juice? Read Appendix B. “Value Innovation, A Reconstructionist View of Strategy”.

Let me just give you a snippit to whet your appetite.

… To reconstructionist eyes, however, the strategic challenge looks very different. Recognizing that structure and market boundaries exist only in managers’ minds, practitioners who hold this view do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. The crux of the problem is how to create it. This, in turn, requires a shift of attention from supply to demand, from a focus on competing to a focus on value innovation — that is, the creation of innovative value to unlock new demand. ….

We have seeen in the example of Cirque du Soleil a focus on the demand side, whereas recombination is about recombining existing technologies or productive means, often focusing on the supply side. The basic building blocks for reconstruction are buyer value elements that reside across existing industry boundaries. They are not technologies nor methods of production.

By focusing on the supply side, recombination tends to seek an innovative solution to the existing problem. Looking at the demand side, in contrast, reconstruction breaks away from the cognitive bounds set by existing rules of competition. It focuses on redefining the existing problem itself. Cirque du Soleil, for example, is not about offering a better circus by recombining existing knowledge or technologies about acts and performances. Rather, it is about reconstructing existing buyer value elements to create a new form of entertainment that offers the fun and thrill of the circus with the intellectual sophistication of the theater. Redefining the problem usually leads to changes in the entire system and hence a shift in strategy, whereas recombination may end up finding new solutiosn to subsystem activities that serve to reinforce an existing strategic position.

(bold emphasis all mine)

If you’re still with me, congratulate yourself (and please comment on this post, because I want to know you and be your friend).

To throw some gun powder on the fire (is this exciting or what!!!?), reading Appendix A, which is really a shortened summary of the entire book using witty examples and stories, solidifies the necessity to put the freaking book down and go do something about your ideas.

Now go already! Buy the book. Read it. And, make blue oceans! (Not yellow ones.)

[tags]business, strategy, web 2.0, blue ocean strategy, havard business, competition[/tags]

Nate Ritter lives in the Pacific Northwest (U.S.), popularized the #hashtag and creates web applications for a living. He also does miles and point hacking to enable cheap travel for his family. More here →

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