Blue Ocean Chapters 10 and 11 - Renewing Blue Ocean and Common Red Ocean Traps

Blue Oceans once captured can be sustained for some time due to barriers to imitation. The barriers could be economic, cognitive, brand or alignment. Economic is of course scale needed to be viable - imitators have to bleed till they scale up. Cognitive is about going against conventional wisdom - even after seeing someone succeed imitators refuse to believe it. Brand - of course takes consistency over time to imitate. And finally alignment of value, profit and people - it may take some time to get the interlocks right. So while others are getting these right, the company can earn good profits. And once competition gets in, companies have to start looking for the next blue ocean. Which also brings us to the question of who are those companies entering next and what is their strategy. For if they do not enter it will always remain a blue ocean. Guess we need to look at other books to deal with that.

Then the authors move on from product level to portfolio level talking of settlers, migrants and pioneers. I realized this is similar to the BCG Matrix. Settlers can be viewed as the cash cows - making money now but not growing, the migrants the stars - making money and growing fast and pioneers the question marks - small but growing. So basically the idea is to ensure we have enough pioneers continuously becoming migrants and then settlers.  And guess the cash cows will eventually contract and become dogs. So you need to have replacements ready. I guess BCG matrix approach is a bit different. But definitely parallels are there.

And in the following chapters, authors caution against applying blue ocean strategy the wrong way. Three of the pitfalls are equating to the three traditional strategies - cost leader, product differentiation or finding niches. This strategy seeks to achieve best of all 3 worlds through innovation, differentiated product at a lower cost for a wide band of customers. And at the same time it should not be equated to other forms of  innovation such as tech innovation which may not be value focused. And it is also not a disruptor - totally replacing an existing product. What he calls destructive creation. That way even Christensen's disruptive innovations don't work that way - they don't replace the main product all at once. It only works its way up. This strategy doesn't follow that approach though. Instead it captures a wide enough market and retains - doesn't go extending the market continuously. Though it can be argued each next step is spawning a new blue ocean. Anyways moving on, he says it is not just a marketing strategy. That is six of them. He says it does not necessarily need a company to be the first mover in the sense the first to come up with an idea. But still has to be the first to make an idea work. And it is obviously not about technology. And just the opposite of being customer led - it is actually non customer led. Also that blue ocean is not against competition - just that beyond a point it can become unproductive and one has to move on.

So by saying what all it is not, we become clearer what it is. While I have tried to draw parallels with disruptive innovation, it definitely is different in key aspects. Next I would be looking at a book talking of a company's success and see if any of the principles from these two books apply to the success.    



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