Wednesday, April 15, 2015

Skeptical Blue Ink

In response to “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgue

At first, my response to the “Blue Ocean” article was to write it off as outdated. In past years, incumbents in nearly every industry have learned to adopt new technologies processes, and seek new markets as fast as possible. Companies now invest in R&D teams AND innovation teams which seek out new ways to apply a company’s resources. Small startups are quickly bought out by larger companies like Google. Put simply, companies have adapted a “niche or die” mentality to constantly find blue ocean space, or quickly follow up on another company’s discovery.

“When everyone’s a Hero, nobody is.” Now days companies are able to bloody potential blue oceans before they can take off the ground. Perhaps people took blue ocean’s to heart to strongly. Aside that, advice to create niche markets follows an “easier said than done” frame of mind.

The article recommends removing competitors from the picture, but that’s simply not possible. There are always competitors; money and time come in limited quantity for customers. Cirque du Solei did not create a blue ocean without competitors by targeting an older business market; instead they competed against theatre and opera shows. Given, they created a distinct option from their competitors and have few direct competitors in terms of show style, but the limited pool of hires and lengthy training required for the their style gave them a unique advantage. Even if competitors quickly acted they’d have few hiring options and fall years behind just to train people.

In contrast, companies now specifically look for opening markets to join as they emerge. Furthermore, within the technology industry, mimicking software and intruding market niches can be done much more quickly than in a theatrical one (think of Pandora and Spotify).

However, despite my skepticism, I do think that modern companies could take a certain key point from the blue ocean strategy; to focus on markets and existing technology rather than developing a new market. Companies need to restrain their strategy teams from overzealous pursuits where investment in new ideas and markets might make them overlook a “blue ocean” with what they already have.  By utilizing technology that they have further developed than other entrants, they can at least hope to temporarily enjoy uncharted waters. Moreover, companies can better tie these blue oceans to their brand image, giving them a chance for truly blue waters.

Daniel Johnson
Blog 4



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