Executive Interviews: Interview with W Chan Kim & Renee Mauborgne on Blue Ocean Strategy
December 2008 - By Dr. Nagendra V Chowdary

W Chan Kim & Renee Mauborgne
Co-Founders and Co-Directors of the INSEAD Blue Ocean Strategy Institute.

Each of the six principles in Blue Ocean Strategy expressly addresses how to mitigate each of these risks. The first blue ocean principle reconstruct market boundaries addresses the search risk of how to successfully identify, out of the haystack of possibilities that exist, commercially compelling blue ocean opportunities. The second principle focus on the big picture, not the numbers tackles how to mitigate the planning risk of investing lots of effort and lots of time but delivering only tactical red ocean moves. The third principle reach beyond existing demand addresses the scope risk of aggregating the greatest demand for a new offering. The fourth principle get the strategic sequence right addresses how to build a robust business model to ensure that you make a healthy profit on your blue ocean idea,thereby mitigating business model risk. The fifth principle overcome key organizational hurdles tackle how to knock over organizational hurdles in executing a blue ocean strategy addressing organizational risk. The sixth principle build execution into strategy tackles how to motivate people to execute blue ocean strategy to the best of their abilities, overcoming management risk.

Hence, asmuch as blue ocean strategy is about maximizing opportunities it is also about minimizing risk. That is why blue ocean strategy speaks the language of executives. Executives cannot afford to be riverboat gamblers. Our book aims to help balance the scales so that formulating and executing blue ocean strategy can become as systematic and actionable as competing in the red oceans of the known market space.

• Do you see a possibility of implementing Blue Ocean Strategies in old economy industries...?
  Absolutely, Blue Ocean Strategy is imperative in mature industries as they are most often characterized by commoditization, intense competition, market share battles, and declining profit margins. Unfortunately most firms in these red oceans resign themselves to the industry conditions presented to them, asleep to the imperative and opportunity to break away from the competition and create uncontested market space that makes the competition irrelevant. Another example where Blue Ocean Strategy has particular relevance is where established industry players are facing an onslaught of new low-cost competitors from countries with less expensive labor. To continue to have strong profitable growth without outsourcing all operations to lower cost countries, value innovation is essential to guide companies towards simultaneously achieving both differentiation and low cost even in higher cost countries. Blue ocean strategy provides not only the inspiration but the practical guidelines and analytic frameworks that companies can act on to revitalize entire industries and earn strong, profitable growth while growing demand.

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