Wednesday, April 13, 2016

Blue Ocean Strategy

Blue Ocean Strategy

The Blue Ocean strategy is certainly compelling and thought provoking, and having attended a few Cirque du Soleil performances myself it is easy to relate the strategy to this successful Blue Ocean example.  The Blue Ocean strategy does bring a few questions to mind such as; are there correlations between successful Blue Ocean creations and factors of rapid expansion, and do service oriented creations fair better than product creations?  Also, is the frequency of service or product innovation greater in Blue or Red oceans?

I would expect that the ability of a Blue Ocean creation to rapidly expand and overwhelm a market could be a key to whether a Blue Ocean creation succeeds (the authors did not mention a failure rate of incumbents in Red Oceans that attempt to create Blue Oceans but never fully succeed).  The ability to rapidly expand a Blue Ocean creation would equally rapidly create barriers to entry by competitors attempting to copy.  I assume that Starbucks is considered a Blue Ocean creation, and another example of what I would consider a service oriented Blue Ocean.  An amazing success story and equally impressive history of expansion – a Starbucks on every corner (well almost).  At this point it would seem impossible for another coffee house to take over Starbucks market share, a Blue Ocean that will last much longer than the authors suggested ten to fifteen-year term for Blue Oceans.

It would be interesting to know the success rates of Blue Ocean creations that are services compared to products.  With the Cirque du Soleil example it seems some additional unique entry barriers may be assisting the longevity of Cirque du Soleil in a Blue Ocean, such as the unique artistic creativity that was first conceived and crafted into a formula, not to mention the extremely talented performers having their own unique artistic performance talents.  So what happened to one hugely successful product, the first iPhone?  The first pocket sized smartphone, the iPhone, was introduced in 2007 followed by the first Samsung Galaxy android smartphone in 2009, a very short Blue Ocean period.  Perhaps such a short Blue Ocean period because the IBM Simon in 1992 is considered to be the first smartphone, thus providing for a long period of competitive research and development for pocket sized smartphones?

Lastly, is there a correlation between the rate of service or product innovation for Blue Oceans?  My first impression is that competition would likely foster a higher rate of innovation (more of benefit to consumers).  Few would refute that Starbucks after all these years still brews one of the best consistent quality cups of coffee, but then again the in store Starbucks experience is fairly unchanged, and many consumers would say that is fine, and to others the same coffee house experience year after year, and city after city could get a little boring.

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