BLUE OCEAN SHIFT summary
Book Summary & Synopsis
What's it about?
This book summary, 'Blue Ocean Shift', introduces a powerful business strategy that allows organizations to escape fierce competition and create new, uncontested market spaces. It outlines a step-by-step framework and practical tools to make a 'blue ocean shift' – moving from 'red oceans' of overcrowded industries to 'blue oceans' full of opportunity. Readers will learn how to identify hidden pain points, chart customer experiences, and utilize various tools like the Pioneer-Migrator-Settler Map and the Strategy Canvas to innovate and unlock new demand. Real-world examples like Groupe SEB's ActiFry, Comic Relief's Red Nose Day, and the luxury hotel chain citizenM illustrate these concepts.
Who is it for?
- Business leaders and entrepreneurs seeking to innovate beyond traditional competition.
- Strategists and managers looking for practical tools to identify and create new markets.
- Anyone interested in understanding how to foster a mindset that transforms industry conditions and generates new demand.
Meet the author
CHAN KIM & RENÉE MAUBORGNE are world-renowned professors of strategy and co-directors of the INSEAD Blue Ocean Strategy Institute. They are the authors of the global bestseller 'Blue Ocean Strategy' and its follow-up 'Blue Ocean Shift', which provides a practical guide to making a market-creating shift. Their work is based on decades of research and practical experience, offering a proven methodology for achieving innovation and growth by moving beyond competition.
From the Introduction & First Chapter
Introduction and Transcend Competition
Blue Ocean Shift by Chan Kim & Renée Mauborgne What's in it for me? Venture out into the vast blue ocean of new markets. If you're working in a typical organization, you're probably operating in a red ocean of overcrowded, fierce competition. But have you ever thought there could be a way to escape and move into a blue ocean, that is, away from competition?
Based on decades of the authors' practical experience, this summary shows you how to venture out into new waters by making a blue ocean shift that is, a shift from a competitive industry environment to new markets full of opportunities. Start by learning a step by step framework and find out about a series of practical tools that can be used on any kind of organization to navigate into a brand new, wide open market. You'll also discover how the market of french fry makers was revolutionized through a blue ocean shift, how a red clown nose shaped the charity industry, and how the luxury hotel chain citizenM made a blue ocean shift by eliminating the front desk. Chapter one.
Transcend competition with a blue ocean shift. When choosing a business strategy, it's important to decide which direction you want it to take, and most people assume your choices are limited to two, the value driven path, along which your business expands through outstanding quality and service, and the low cost strategy, through which your business endeavors to offer the best price among all its competitors. Those two options are all well and good, but there's a third strategy that can do much more. It's called the blue ocean shift.
The blue ocean shift is about taking your business beyond competition into markets that are entirely untouched. Just take the example of Groupe SEB, a well established French maker of small appliances like those that make french fries. One of the basic assumptions in this industry was that making french fries involved deep frying and using a great deal of oil. Nobody ever thought to challenge this idea, even though cooking in liters of oil is expensive, dangerous, messy and, of course, unhealthy.
But in two thousand six, Groupe SEB came out with the ActiFry, introducing a whole new way of making french fries that requires no frying and employs just a tablespoon of oil. ActiFry brought in new customers, opened up a brand new market and positioned Groupe SEB as a global leader. In other words, the essence of a blue ocean shift is moving from a market that's pervaded by fierce competition, a so called red ocean, into a blue ocean, a market that's wide open and full of opportunity. Such a move might seem like a magic trick, but there's a straightforward method behind it that abides by three key components.
First, you need a new blue ocean perspective that expands the horizon of your thinking, second, you need humanness along the way to motivate people into helping you make the shift of perspective, and third, you have to have the market creating tools to transform that perspective into an attractive product. However, these concepts are all very abstract. In the following chapters, you'll learn all the nitty gritty details of how this process works and how you can put it into action.
Creating New Markets
There are specific ways in which new markets are created. So, a blue ocean strategy can transform your business. Before we dive into the new perspective, humanness, and market creating tools of applying one, though, it's useful to learn a bit of market creation theory.
This way, you'll understand why making such a shift works. For instance, you might assume that markets are established when new ideas arise that are fundamentally better or new. But there are actually three more specific market creating strategies. The majority of business leaders and entrepreneurs are familiar with the first one, an approach now known as disruptive innovation.
This tactic is what the twentieth century Austrian economist Joseph Schumpeter dubbed creative destruction, and it occurs when a new innovation overcomes earlier technology, thereby disrupting the industry. Just think of the Kodak company and the photographic film industry over which it reigned. Both were fundamentally disrupted by the invention of digital photography. Then there's non disruptive creation, in which markets are neither destroyed or replaced.
A new market is simply created without any change to existing ones. A good example here is Pfizer's creation of Viagra. This new drug didn't disrupt the existing drug market. Instead, it forged a whole new market by solving a previously unaddressed problem among men erectile dysfunction.
And finally, in between these two strategies is a third, often overlooked middle way. This strategy comes into play when an existing problem is redefined, and Groupe SEB's ActiFry, the french fry maker mentioned in the last summary, falls into this category. In this example, both non disruptive and disruptive forces are involved. The existing industry wasn't displaced, but it was certainly turned on its head.
In simple terms, you can either create a breakthrough product that replaces existing ones, identify and solve a brand new problem or redefine your approach to an existing one. Next up, we'll learn about the three key components of facilitating a blue ocean shift.
Table of Contents
- 1 Introduction and Transcend Competition 3:46
- 2 Creating New Markets 2:27
- 3 Blue Ocean Perspective 2:46
- 4 The Human Element 2:11
- 5 Assessing Your Situation 2:17
- 6 Plotting Value Curves 2:15
- 7 Customer Experience Map 1:09
- 8 Uncovering Opportunities 2:33
- 9 Developing Blue Ocean Options 2:38
- 10 Selecting Markets and Launching 2:11
- 11 Final Summary 1:00
