"Blue Ocean Theory": year of release of the book, authors, concept and translation

2024 Author: Leah Sherlock | [email protected]. Last modified: 2023-12-17 05:25

Blue Ocean Theory is a popular business strategy book that was first published in 2005. Its authors are Rene Mauborn and Kim Chan, employees of the European top business school and the Blue Ocean Strategy Institute. This guide for start-up entrepreneurs and businessmen details how to achieve high profitability and rapid growth of a company that can generate its own actionable business ideas, creating demand in an existing market (called the "blue ocean") that did not exist before. The big advantage is the practical absence of competitors. Companies in this case deliberately refuse to participate in business with a large number of business opponents in low-profit markets, which are called the "red ocean". So let's get started!

About the book

"Blue Ocean Theory" is written on the basis of fifteen years of experience in economic research in business and finance. As illustrative examples, the authors use about one and a half hundred successful strategies, taking about thirty very different industries and a time period of approximately 120 years. With their help, they turn their strategy into reality.

Since its publication in 2005, the book has already been published with a total circulation of about three and a half million copies, during which time it has been translated into 43 languages of the world, including Russian. For our reader, it was adapted by translator Irina Yushchenko. This guide for businessmen became a bestseller according to several reputable publications at once, some even voted it the best business book of 2005.

Kim Chan

One of the authors of the book "The Theory of Blue Oceans" was the South Korean economist Kim Chan. He is a professor and currently chairs the Department of Strategic Management at the French business school INSEAD. He is also an advisor to Malaysia, the European Union and the World Economic Forum in Davos on business and entrepreneurship. Experts include him in the top five most famous and effective thinkers in the world. His articles and publications have appeared in the most popular management publications.

Kim Chan was born in the South Korean city of Jinju in 1951. His father was a famous fighter for the independence of his country, defended her right to liberation from Japan. For these meritsburied at the National Cemetery of the Republic of South Korea.

Sam Kim Chan is a graduate of Seoul National University. He has a Bachelor of Arts degree. After that, he graduated from the Asian Institute of Management in the Philippines, which has existed since 1968 under the auspices of the Harvard Business School. In this educational institution, he received a master's degree in management and business.

After that, the author of Blue Ocean Theory received a PhD in international and strategic management from the Steven Ross School of Business, founded at the University of Michigan. In the same educational institution, he began his teaching career, receiving a professorship in international and strategic management. Actively engaged in advising government agencies and companies.

For Kim Chan, "Blue Ocean Theory" was his most successful book, which sold millions of copies around the world.

Rene Mauborgne

Pictured above is a woman who also runs the Blue Ocean Strategy Institute. In addition, he is a professor at the French business school INSEAD. But for us it is more interesting that she is the second author of the Blue Ocean Theory.

Rene Mauborgne was born in the USA in 1963. She managed to build a successful career, for example, she joined the presidential advisory council on universities and colleges, which historically had a "black" contingent of students. Repeated participant of the World Economic Forum inDavos.

She is the author of a large number of works on management and business development strategy.

Basic concepts

In Blue Ocean Theory, Kim Chan and Rene Mauborgne introduce two key concepts. It is on them that all further research is based. We are talking about blue and scarlet oceans.

Under the blue oceans, scientists understand all industries that can currently be considered non-existent, they are unknown market participants. In contrast to them, there are scarlet oceans, in which the borders of the neighborhood have long been agreed upon and defined, the well-known rules of competition work there. In the red oceans, the main task of the company becomes to establish superiority over the business enemy in order to win over most of the demand to its side. After a while, the market becomes too crowded, the opportunities for profit and growth are rapidly reduced, and most of the production turns into ordinary consumer goods. As the authors of the book "The Blue Ocean Theory" note, market participants are actively "biting each other's throats", filling everything around with scarlet blood. Sounds terrible, but very true.

The blue oceans remain virtually untouched market areas where there is no competition. In these areas, there is an opportunity to grow and develop, making a profit. The main condition for their development is a creative approach.

At the same time, most of the blue oceans arise inside the scarlet ones, as if pushing the boundaries of thator another industry. But what's interesting is that some of the blue oceans are being created outside known boundaries.

Substantiation of the main idea

The main thesis of Blue Ocean Theory is that the only way to beat the competition is to stop trying.

The authors note that the comparison of market competition with military confrontation is already firmly rooted in the mass consciousness. Blue oceans stand out in this respect. No competition threatens anyone on this field, and the rules of the game are still being established.

To illustrate the blue ocean theory, the authors take as an example the circus industry, which has recently lost its relevance among children due to the emergence of a large number of more modern hobbies.

In this regard, Cirque du Soleil has become a real breakthrough. She managed to achieve success in an industry that many considered completely unpromising. After all, the management decided not to follow the known path, refusing to use the classic elements of the circus, such as performances of clowns and animals, round arenas. Instead, the project has absorbed the most spectacular and popular elements of the circus that exist. These are conceptual performances, acrobatics of the highest level. But he got rid of everything that did not fit into the framework of the concept.

Moreover, the company has changed the target audience, focusing not on children, but on we althy adults. With an original approacha unique niche has opened up that was previously unoccupied by anyone.

Creating a blue ocean

Thanks to the book Blue Ocean Strategy in Russian, now you can also learn that it is not necessary to open a new industry to create a blue ocean. It is necessary to push the boundaries of the already existing scarlet oceans. At the heart of this strategy is value innovation.

Under this concept, the book "The Theory of Blue Oceans" describes what makes competition simply unnecessary due to the company's reaching a fundamentally new level.

Strategy

The strategic canvas becomes the main tool. It represents the most simplified model of the industry, which is clearly reflected in the form of a graph. With its help, you can evaluate the differences and similarities of your own strategy with those of competitors.

To build such a canvas, you must first highlight the key factors of the industry. Then evaluate the scope of the proposal and the estimated costs. Finally, it is important to connect the resulting points on the graph for each company separately. The result should be the so-called value curves, which are visual representations of the strategy for a particular company.

To create a blue ocean, it is important to shift from competitive struggle to the search for alternatives, not trying to satisfy the average customers of this industry, but to make customers who had nothing to do with it before.

Four Action Model

This is another strategically important concept in the content of Blue Ocean Theory. In fact, it is a logical continuation of the strategy canvas.

After analyzing the current market situation, you need to ask yourself the question: "Which factors of competition can be eliminated, which should be reduced compared to accepted standards in a certain sulfur, and which should be increased." For example, new factors are needed that have never been offered by this industry before.

Principles

Six principles are needed to create a blue ocean. The first concerns the revision of the boundaries of the existing market. It can be implemented in several ways:

• analyze alternative industries;
• consider companies with similar strategies;
• pay attention to consumers;
• develop opportunities to introduce additional services and products;
• evaluate the emotional and functional appeal of the product;
• try to look into the future by analyzing how the industry will develop.

The second principle is based on focusing not on numbers, but on the whole picture. This is what is required to plot the strategy canvas.

The third principle is to go beyond the current demand.

The fourth principle is based on the correct strategic sequence. Its essence is to test the commercial viability of an idea, to determine whether it iscrafted offering of real value innovation.

The fifth principle is to overcome organizational contradictions.

The sixth principle is the ability to embed the implementation process itself into an existing strategy.

What can get in the way?

At the same time, the authors pay attention to the contradictions that may hinder the implementation of the blue ocean strategy.

Firstly, this is the internal resistance to everything new on the part of employees. It is important to convince them of the need to change the strategy. To do this, you need to use focused leadership that allows you to make fundamental changes as quickly as possible.

Secondly, it is limited resources. We are talking about the widespread belief that global changes require large expenditures.

Third, the need to properly motivate key employees to take action that will contribute to success.

Finally, fourthly, the danger of political intrigues, that is, the emergence of opposition from the forces whose interests will be affected by these transformations.

Life cycle

Each blue ocean has its own life cycle, you need to be prepared for the fact that your competitors are not asleep, the blue ocean you created may soon turn scarlet again.

To prevent this, you need to constantly monitor changes in the value curve. As soon as it starts to merge with the curves of competitors, something urgently needs to be changed.