Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant?

Book Review of Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renee Mauborgne
The book proposes a new strategy to succeed in the market place by simultaneously pursuing the twin objectives of differentiation and low cost which the authors have christened Blue Ocean Strategy. The authors are of the opinion that the established existing market places are crowded with incumbent players who are battling each other and making the whole market place bloodied and red. They use the term ‘Red Ocean’ to describe the heavily crowded and intensely competitive existing market places in the business universe. The term ‘Blue Ocean’ is used to describe market places that are uncontested or
The rules of the game are well established, and the competition is largely based on low cost as the margins and avenues for innovation and differentiation would already have been largely exploited over a long period of time. There would hence be overall limited prospects for growth and profitability. The market is crowded with numerous players and the products on offer don’t have a lot of differentiation between them and would have in most instances turned into commodities.
Blue oceans denote future market potential and opportunities that have not been exploited so far. It is the unknown market space that is not polluted and bloodied by competition. New demand is created which naturally gives opportunities for higher profit margins and new innovations and product differentiations. Blue oceans are created in two ways: companies either give rise to completely new industries; an example cited is the online auction company e-bay which introduced an altogether new business model and became immensely successful. The second way is to alter existing boundaries of the bloodied
The video game industry had been dominated by Sony's Playstation and Microsoft's Xbox; to compete with them, Nintendo re-invented video gaming, making it more social, more intuitive and physically engaging. The Wii was revolutionary, and it was the device that made video gaming as widely enjoyed as board or card games. The feature that set the Wii apart from both its competitors and its ancestors was the Wii remote, the device’s control pad. Instead of the traditional bulky, button-studded joystick, Nintendo came out with a sleek wand that resembled a television remote control. It was connected to the console wirelessly, and more importantly, it was equipped with an innovative motion sensor that detected movement and rotation in three dimensions. Wii also managed to reduce costs by eliminating high end graphics and CPU power which enabled the company to sell the product at a very competitive price. A brilliant example of differentiation and low cost as espoused by blue ocean