Review: Blue Ocean Strategy–How to Create Uncontested Market Space and Make Competition Irrelevant

5 Star, Best Practices in Management, Strategy

Blue OceanMisses Long-Term, Green, and Bottom of Pyramid, Superb Otherwise

June 22, 2007

W. Chan Kim

I am not deducting one star for the gaps listed above, because on balance the book is one of a handful of business books that is serious as opposed to the pap that one generally sees.

There are other in-depth reviews, so I will summarize only what mattered to me. The bottom line here is create new markets and woo new customers, rather than compete. With this in mind, I am stunned that they do not examine more carefully C.K. Prahalad’s wisdom as communicated in The Fortune at the Bottom of the Pyramid. He teaches us that capitalism (never mind the immoral predatory part) focuses on the billion at the top who can afford new sub-zero refrigerators and disposable goods. He teaches us that unlike this group, worth one trillion a year, the five billion at the bottom of the pyramid represent four trillion a year, but their refrigerator needs are different: for $2, an African “refrigerator” is two ceramic vases with broad bases and necks, one inside the other. Buried in the ground, they keep meat fresh for five days.

Their key principles:

1) Reconstruct/cross market boundaries

2) Focus on big picture not numbers

3) Reach beyond existing (and I would add, illiterate) demand

4) Get the strategic sequence right

The heart of their book is “first to market” and “create new markets.”

They address three customer groups for study:

1) Soon to be customers (e.g. young, international)

2) Refusing customers

3) Non-customers for whom new attractive value can be created

I especially like the discussion, two thirds of the way through the book, on six blocks to buyers utility:

1) Customer Productivity

2) Simplicity

3) Convenience

4) Risk (reduction)

5) Fun and image

6) Environmental friendliness (a scant mention).

This is a seriously useful book, a fast read, and worthy of note. The books below will provide additional context and insight as we all begin to demand an end to corporate “personality” and a restoration of public ownership and public accountability and utility.

The Corporation
Manufacture of Evil: Ethics, Evolution, and the Industrial System
The Soul of Capitalism: Opening Paths to a Moral Economy
Confessions of an Economic Hit Man
The Global Class War: How America’s Bipartisan Elite Lost Our Future – and What It Will Take to Win It Back
The Politics of Fortune: A New Agenda For Business [[ASIN:0865475873 Cradle to Cradle: Remaking the Way We Make ThingsLeaders]] Natural Capitalism: Creating the Next Industrial Revolution
Capitalism 3.0: A Guide to Reclaiming the Commons (Bk Currents)
Ecological Economics: Principles And Applications

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