W. Chan Kim

Leading Strategy and Management Expert

"Don't Compete with Rivals-Make Them Irrelevant"

Companies have long engaged in head-to-head competition in search of sustained, profitable growth. They have fought for competitive advantage, battled over market share, and struggled for differentiation.

Yet, in today's overcrowded industries, competing head-on results in nothing but a bloody "red ocean" of rivals fighting over a shrinking profit pool. In a book that challenges everything you thought you knew about the requirements for strategic success, W. Chan Kim and Renée Mauborgne contend that while most companies compete within such red oceans, this strategy is increasingly unlikely to create profitable growth in the future.

Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that tomorrow's leading companies will succeed not by battling competitors, but by creating "blue oceans" of uncontested market space ripe for growth . Such strategic moves-termed "value innovation"-create powerful leaps in value for both the firm and its buyers, rendering rivals obsolete and unleashing new demand.

BLUE OCEAN STRATEGY provides a systematic approach to making the competition irrelevant. In this frame-changing book, Kim and Mauborgne present a proven analytical framework and the tools for successfully creating and capturing blue oceans. Examining a wide range of strategic moves across a host of industries, BLUE OCEAN STRATEGY highlights the six principles that every company can use to successfully formulate and execute blue ocean strategies. The six principles show how to reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome organizational hurdles, and build execution into strategy.

• Selected as one of the Top Ten Business Books of 2005 by Amazon.com
• Selected as #1 Strategy Book of 2005 by Strategy + Business, Booz Allen & Hamilton's leading business magazine
• Best Business Book, 2005 at Frankfurt Book Fair
• #1 Management Book of the Year, Jyllands-Posten (Denmark)
• Wall Street Journal Bestseller
• BusinessWeek Bestseller

W. Chan Kim is The Boston Consulting Group Bruce D. Henderson Chair Professor of Strategy and International Management at INSEAD, France (the world's second largest business school). Prior to joining INSEAD, he was a professor at the University of Michigan Business School, USA. He has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and Pacific Asia. He is an advisory member for the European Union. He was born in Korea.

Kim is a fellow of the World Economic Forum. His Harvard Business Review articles, co-authored with Renée Mauborgne, are worldwide bestsellers and have sold over half a million reprints. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review. They have co--authored articles in The Wall Street Journal, The Wall Street Journal Europe, The New York Times, The Financial Times, The Asian Wall Street Journal, and numerous journals.

Kim has published numerous articles on strategy and managing the multinational which can be found in: Academy of Management Journal, Management Science, Organization Science, Strategic Management Journal, Administrative Science Quarterly, Journal of International Business Studies, Harvard Business Review, Sloan Management Review, and others. He is the co-author of Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant (Harvard Business School Press, 2005). Blue Ocean Strategy has become an "International Bestseller," after reaching the "Wall Street Journal Bestseller," "BusinessWeek Bestseller," and "National (American) Bestseller" status. It is being published in 30 languages, breaking HBSP's historical record of most foreign language translations ever achieved. Blue Ocean Strategy won the Best Business Book of 2005 Prize at the Frankfurt Book Fair. It was also selected as the number one Strategy Book of 2005 by Strategy + Business, Booz Allen & Hamilton's leading business magazine, and as a Top Ten Business Book of 2005 by Amazon.com.

Kim is a winner of the Eldridge Haynes Prize, awarded by the Academy of International Business and the Eldridge Haynes Memorial Trust of Business International, for the best original paper in the field of international business. He was selected for Thinkers 50, the global ranking of business thinkers, and was named along with his colleague Renée Mauborgne, as "the number one gurus of the future" by L'Expansion, one of France's leading business magazines. The Sunday Times (London) called them "two of Europe's brightest business thinkers. Kim and Mauborgne provide a sizeable challenge to the way managers think about and practice strategy." The Observer called Kim and Mauborgne, "the next big gurus to hit the business world."

Kim and Mauborgne co-founded the Value Innovation Network (VIN), a global community of practice on the Value Innovation family of concepts that they created. VIN embraces academics, consultants, executives, and government officers. Kim is also a board member of the Value Innovation Action Tank (VIAT), a non-profit organization, which has 15 Singapore government ministeries and agencies as founding partners. VIAT was established in March 2004 to bring Value Innovation to the country's private, public and people sectors. The Times (London) said, "the ultimate centre of excellence is one which does not cost the business school any money, but which positions its faculty as leaders in its field, creator of practical ideas, and direct influencer of governments. In this, Singapore's Value Innovation Action Tank (VIAT) is probably the benchmark. VIAT aims to convert Kim and Mauborgne's ideas into reality by using a variety of frameworks, processes, tools and educational programmes."

Summary: The primary concept is simple: Blue Oceans represent unknown, uncreated market space. They become wide open opportunities once discovered and executed. Red Oceans, on the other hand, represent known markets. These are highly competitive, segmented, bloody, shark-infested waters with shrinking opportunities. Throughout history, markets are born as blue oceans and evolve to red through competition, commoditization and over supply. The goals of a blue ocean strategy:

Create uncontested space

Make competition irrelevant

Create and capture new demand

Break the value-cost trade-off

Align your entire system in pursuit of low cost, high margin

Red ocean strategies are self focused, obsessed with their organization’s internal perception of the industry condition, size of opportunities, competition, consumers and timing.

Blue oceans are about creating new opportunities, not creating new varieties of existing products, services or processes. Patterns can be identified and applied to generate innovative thinking. Based on research that included hotels, cinema, retail, airline, industry, computer, home construction, software, cosmetics, steel, auto and energy, common paths were identified for blue ocean strategies.

Innovation comes from seeing across industries, not competing within them. Using Southwest Airlines as one example, Mauborgne cited how they recreated the experience/expectation of auto travel in the air. Expectations included speed, low cost and high convenience. These are the points that Southwest focused on to differentiate their service and break away from the pack. In the process, a number of services that were industry standard were revealed to be unnecessary or a willing trade-off for a large number of fliers.

What you can learn:

• Why designated ways of building brands, doing publicity and running promotions do not work as they did before
• How customers changed their buying habits
  
• The revolution of the last ten years
• Goodbye to the social stratification of consumption: The global middle class buys for everyone everywhere
• Marketing at point of sale: The new architecture of information
• Why customer service expectations continue to change, and how
• E-commerce and its impact on consumer behaviour