By. Dharma Leksana, S.Th., M.Si.
Detik-news.com – Jakarta, Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne is one of the most influential business strategy books of the last few decades. It offers a radical perspective that challenges business leaders to stop competing in saturated, bloody markets (red oceans) and instead create new, untouched market spaces (blue oceans), where competition becomes irrelevant.
Here is an in-depth review of its key concepts, followed by a constructive critique of the strategy.
Book Review: Creating Uncontested Market Space
Based on the summary provided, the main strength of “Blue Ocean Strategy” lies in the clear framework and practical tools it offers.
1. Core Concept: Red Ocean vs. Blue Ocean
The central concept of the book is a metaphorical comparison between two types of markets:
- Red Ocean: Represents all industries in existence today. Here, industry boundaries are defined, the rules of the game are understood by all players, and companies fiercely “fight” each other to capture a greater share of existing demand. This intense competition makes the ocean “red” with the blood of competitors.
- Blue Ocean: Represents unexplored market space, created by a company through innovation. In a blue ocean, demand is created rather than fought over. Because the rules have not yet been set, competition is irrelevant, opening up highly profitable growth opportunities.
2. The Foundation of the Strategy: Value Innovation
The book asserts that the cornerstone of creating a blue ocean is Value Innovation. This is not just about technological innovation or a product breakthrough. Value Innovation is the simultaneous pursuit of differentiation and low cost.
- Value without innovation tends to focus on incremental improvements (value creation on a small scale).
- Innovation without value tends to be technology-driven, market-pioneering, or futuristic, often aiming for something the market is not yet ready to accept or consume.
Value Innovation is achieved only when a company’s entire system of activities (product utility, price, and cost structure) is aligned to deliver a leap in value for both the buyers and the company itself.
3. Practical Analytical Tools
To implement this strategy, Kim and Mauborgne provide several highly useful tools:
- Strategy Canvas: A diagnostic tool that maps the current state of competition in a known market space. This tool helps companies understand where the competition is currently focused, what factors are being competed on across products and services, and what customers are getting from the existing competitive offerings.
- Four Actions Framework: To reconstruct buyer value elements, this framework poses four key questions:
- Eliminate: Which factors that the industry has long competed on should be eliminated?
- Reduce: Which factors should be reduced well below the industry’s standard?
- Raise: Which factors should be raised well above the industry’s standard?
- Create: Which factors should be created that the industry has never offered?
- Eliminate-Reduce-Raise-Create (ERRC) Grid: This tool encourages companies to not only ask the four questions in the framework but also to act on them to create a new value curve that diverges from competitors.
Critique of “Blue Ocean Strategy”
Despite its immense popularity and influence, “Blue Ocean Strategy” is not without its critics and has several limitations that should be considered.
1. The Temporary Nature of the “Blue Ocean”
The most common criticism is that no blue ocean is permanent. When a company successfully creates a new, profitable market, that success will quickly attract new competitors (sharks). In a short time, a calm blue ocean can turn into a competitive red ocean. For example, the success of the iPhone in creating the modern smartphone market quickly invited competitors like Samsung (Android), which then created extremely fierce competition.
2. Implementation Difficulty and High Risk
Although tools like the ERRC Grid seem simple, the process of identifying which factors to eliminate, reduce, raise, or create is extremely difficult and subjective. The strategy demands a deep understanding of non-customers and a willingness to take significant risks by abandoning established industry practices. Many companies that attempt to create a blue ocean fail due to poor execution or flawed market assumptions.
3. The Potential for Survivorship Bias
The book highlights spectacular success stories like Cirque du Soleil, Southwest Airlines, or [yellow tail] wines. However, it doesn’t discuss the companies that applied similar logic but failed completely. This creates a survivorship bias, where the framework appears highly effective because we only see the successful “winners,” not those who “drowned” while trying to find their blue ocean.
4. Oversimplification (Red vs. Blue)
The dichotomy between red and blue oceans can oversimplify business reality. Many highly successful companies operate in a “purple ocean,” a market where they simultaneously compete effectively (a red ocean element) while continuously innovating to create uniqueness (a blue ocean element). They don’t completely abandon competition but rather manage it intelligently.
5. Not a “Silver Bullet” for All Problems
Blue Ocean Strategy is a framework for strategic innovation, but it is not a substitute for strong business fundamentals. A brilliant blue ocean idea will still fail if it is not supported by efficient operations, effective marketing, solid financial management, and an adaptive corporate culture.
Final Conclusion
“Blue Ocean Strategy” is a must-read book for every leader and manager. It provides a new lens through which to see opportunities, encourages creative thinking, and offers powerful tools to escape the price competition trap. The concept of Value Innovation is an invaluable contribution to the world of strategy.
However, this strategy is not a magic formula. It must be applied with a critical understanding of the risks, the temporary nature of competitive advantage, and the need for flawless execution. Viewing it as a mindset for continuously seeking new opportunities is more beneficial than treating it as a guaranteed recipe for limitless success.
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