Masterspeak

"Whenever a blue ocean is created, competition is rendered irrelevant"

W Chan Kim & Renee Mauborgne, professors of strategy, INSEAD

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Published 8 years ago on Feb 02, 2013 12 minutes Read

South Korean rapper Psy may have become a YouTube sensation, but W Chan Kim still remains the most recognised business personality to emerge from Korea. If you have any doubts, try naming the chief executives of either Samsung, Hyundai or LG? In all likelihood, we would have a much bigger show of hands if we asked a random collection of management jocks if they are familiar with the term Blue Ocean. In South Korea, not to mention Japan, collective effort is much prized over individual daredevilry. That is why there is no Richard Branson in Japan and SoftBank’s Masayoshi Son is an exception. Therefore, the rise to eminence of Korean born Kim and US born co-author Renee Mauborgne in 2005 was a big surprise. There is another achievement to Kim and Mauborgne’s credit that the Korean rapper will find hard to match. Their bestselling book, Blue Ocean Strategy, has been translated into 42 languages. Like all good story tellers, the duo is working on a sequel but wouldn’t give away anything at the moment.

How did Blue Ocean Strategy come about? Why did you decide to use the term Red and Blue Ocean?

Mauborgne and I have worked together for the past 30 years. From the beginning, we have shared an intellectual curiosity to understand what it takes to stand apart and create strong profitable growth. In search of an answer, we looked back more than 100 years and across 30 industries. Contrary to common thought, we did not find any permanently excellent companies or permanently excellent industries in our research. What we did find, however, were smart strategic moves. And the strategic move that we found matters centrally is to create blue oceans. Blue oceans allow companies to create strong profitable growth. This led to our book, Blue Ocean Strategy.

We use the terms red and blue oceans to describe the market universe. Red oceans are all the industries in existence today — the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here, companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities and cutthroat competition turns the ocean bloody. Therefore, the term “red” oceans. 

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