Book review: Blue Ocean Strategy by Chan Kim and Renee Mauborgne

Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant.
By Chan Kim and Renee Mauborgne.
Published by Harvard Business Publishing.
Reviewed by Jim Lewcock, founder and CEO, The Specialist Works.


This is not a book review. It’s an invitation to change your thinking. Perhaps it’s a cult. Certainly the reinvention we have all been waiting for.

Have you ever wondered what actually caused all this mess of alleged corruption and client distrust in the first place?

A bloody Red Ocean, that’s what. If you operate in shark infested waters pitching against the same people with the same services you eat away at each other’s margin.

This is compounded by our industry obsession for anything automated, wonky reporting systems and gnarling procurement teams.

But there is a way out. And it’s called Blue Ocean Strategy.

A book written by two hugely inspiring INSEAD professors, decorated in global business accolades. Their 10-year research covers 150 strategic moves across 30 industries.

It lists brands such as Apple, IKEA, Amazon and Virgin Atlantic who have created new ways to win customers. And the authors have captured a simple formula behind this apparent disruptive activity.

Instead of trading on price or quality (such is the usual way), this entrepreneurial proposition combines low cost with innovation of the product or service. And this is called the ‘value-innovation’ proposition.

Take the i-Phone. Beyond the phone calls it also gave huge choice and easy access to low cost music, plus a better way to take and store photos. It’s now an infamous presentation by Steve Jobs – he literally launched three products in one night. The masses joined the computer geeks in their love of using Apple products.

This created new market space and new customer demand for Apple, making the competition irrelevant. And this sums up Blue Ocean Strategy.

The process of Blue Ocean Strategy is to create and increase elements of positive customer experience to differ from the competition and to reduce or drop the parts that have been taken for granted but are not deemed necessary in the market sector.

In other words saving money in the "so what" parts and re-investing where you delight through difference. But this cannot be done piecemeal. The whole business must be aligned to deliver value-innovation.

IKEA is a perfect example – bringing Swedish design to the masses and a totally new shopper experience. And as you exit the store you can buy a cheeky hot dog for 60p and with it a reassurance about all those strange bargains literally bagged.

Only catch, you have to build the IKEA products yourself and be the keeper of odd shaped keys for eternity. So Blue Ocean!

The appeal of this book is that you can quickly grasp the vivid red and blue metaphors and apply this to your own experience.

Premier Inn lost the jazzy reception desk, gave you the best night’s sleep of your life and breakfast fit for a king. Blue Ocean.

AirBnB. Achingly Blue Ocean.

So what about the advertising world we live in? Surely the principles of Blue Ocean Strategy are already engrained in our people? Value-innovation (or bang for buck) is after all the key to advertising.

Not so! It’s a big fat red ocean. We chase the wrong things that don’t deliver true value. When demand outstrips supply how can it? Beware the sexy channels and seek value-innovation in different channels and services.

I took a few leaves from this book – followed the client tills (of performance) and not the media trends and focused on creating new value-innovation propositions.

Now, in part thanks to this book, the make up of our agency model looks very different.

How do I know that? Because we sell over half our services to other agencies. To all those clients or agencies stuck in Red Oceans and lacking difference, you must read this book. Reinvent yourself. Align your whole company to the pursuit of delivering true value-innovation.



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