Critique Blue Ocean Shift book

Author: W CHAN AND RENNE MAUBORGNE

First publication: 21 September 2017

Jacket design by Amanda Kain

Jacket photograph © Marta Nardini / Getty Images

Cover copyright ©2017by Hachette Book Group, Inc.

The following is an article that outlines the shorting comings of the book; Blue ocean shift; beyond competing, basing on my own thoughts and my research on the evolution of business market since the publication of the book in 2017.

Introduction

Blue Ocean Strategy (BOS) is a strategy concept which was introduced in the mid-2000s by W. Chan Kim and Renée Mauborgne (KM), professors at the well-regarded business school INSEAD (Kim and Mauborgne 2004, 2005b). The BOS concept was presented as a radical shift from the conventional paradigm and ways of thinking in the field of strategic management over the last few decades. According to Denning (2017a), KM started a “revolution” in the field of strategy. The main idea behind BOS is rather simple. Instead of trying to outcompete competitors in established and crowded market spaces (“red oceans” where shark-like competitors bloody the waters), KM suggest that organizations should seek out uncontested market spaces, so-called “blue oceans” where they can “swim” freely. Since its introduction a bit more than a decade ago, BOS has attracted enormous attention in the business world.

Now is it true that by moving away from a highly competitive market will make a business thrive? My answer is no, business requires more than just moving away from a competitive market to the “blue oceans”.

Part one: Blue Ocean Shift

The authors define the blue ocean shift as a progressive transformation or transfer of a business or an organization from a highly competitive market or environment to a less competitive environment or new markets with an aim of avoiding competition, in a way that brings your loyal consumers or customers with you. (pg. 7) Following their approach, you will have the possibility of advancing your business.

My view is that a lot has transformed on the business market for the past 2 years, due economic competition between the world’s super economy states, making business a more critical part that requires more than just shifting from a competitive area to more of systematic analysis of the market trend in any area that one has the business or wants to set up the business. Business opportunities are everywhere in any economy but the market trend has more effects on the development of a business just like other factors in the environment.

Poor understanding of the market trend has high chances of affecting the thriving of any business even if there is no competition. And the truth is there is no area where a business will fail to have competition.

The book outlines three key components for a successful "blue ocean shift" (pg. 23).

I. Expand your horizon and shift your understanding of where opportunities reside.

II. Apply appropriate and practical tools

III. Having a "humanness" process that uses small steps and firsthand discovery. This means to "allow people to see things that they never saw before and realize the need for change themselves" (pg. 72) and apply a fair process in the entire journey. Even though these three components are essential for establishment of a business, applying them does give a guarantee that a business will thrive in a less competitive area or in “blue ocean” Sometimes it is much easier to identify and solve a brand-new problem or to seize a brand-new opportunity. This means creating a new market space without disrupting an existing one.

PART TWO: Review of chapters and the shortcomings

1. Step One - Get Started (Chapters 5 and 6): here the writers guide an entrepreneur in targeting the areas where he/she can have the most to profit by the blue ocean shift. For this transformation project, it is critical to employ the best team possible. The best team includes the right mix of skills, the level of function and hierarchy, and the appropriate characters needed.

My point of view is that understanding the environment is fundamental in more than skills, if the environment is not conducive, then its automatic that the skills will not play any role in developing the business. The environment in this perspective includes political, social, economic, Technological environment

2. Step Two - Understand Where You Are Now (Chapter 7): the authors try to outline the importance of understanding the current situation or environment in which the business is operating.

In a business setup and development, you have to start by understanding your previous achievements and failure, your current situation may fail to give you a clear picture if you don’t evaluate the market trend in general as per the global statistics and a country statistics after each financial year, the weaknesses in this chapter are that the authors haven’t outlined clearly how understanding your current situation helps in predicting the future market trend. Basing on my research that I carried out on the importance of gradual market analysis, February 2019, many entrepreneurs even though they understand their current business situations, they are unable to evaluate and predict the future market trend. This proving my point that understanding you where you are may fail to help you improve your business even if you transfer it to a less competitive market.

3. Step three: try to figure out where you could be. (Chapter 8-9): through the buyer utility criteria outlined on page 155 of this book, the authors say that one is able to understand the buyers imposed on the market by the industry. They have outlined the key buying cycle according to their knowledge. Their outlined points play a good role improving a business to some extend.

Understanding this factors doesn’t entirely imply that your business will grow, the growth of a business starts more from an intrinsic framework, if you have failed to understand your current business operational environment, there is no way you can picture out where you could be in the business field. The authors have also failed to outline clearly the importance of picturing where you could be of your future business achievements. To my point of view, imaginations in business may fail to work in favor of your business to dynamic structure of the business economy.

4. Step Four - Find How You Get There (Chapters 10 and 11): In these two chapters have tried to outline the criteria one can follow so as to get where he imaged to be or figured his business to be. They have indeed outline techniques or approaches that one can follow"(pg. 193), you investigate the following strategic paths:

1. Look across other industries,

2. Look at other strategic groups within which your business operates.

3. Look at the consumer chain and re-outline the industry consumer group,

4. Look across complementary product and service offerings,

5. Rethink the functional-emotional orientation of your industry,

6. Take part in modifying the market development over time.

As a result, you develop other strategic options that achieve differentiation and low cost. This is as per "The Four Actions Framework" (pg. 220)which helps to decide which factors of your offering needs to be increased, changed or not. This makes it possible to replan your approach with the new target.

My point of view: the above factors make sense yes but;

i. Looking across other industries calls for proper re-view of you marketing strategy.

ii. You look at other strategic groups within which your business operates but fail to understand their dynamic secretes of operation, given that growth of any business starts by internal understanding of the market.

iii. To a high extend government regulations are bond to change as the economic market trend changes and as the forex exchange varies.

iv. The consumer chain also changes on the market, the authors haven’t outlined possible solutions that one can use in case of such changes on the market. This being a great to young entrepreneurs.

v. It is good to take part in modifying the market development over time, but it is also important have an outlined progressive plan to approach market development challenges.

In general moving from one step to another in a business requires more than just dreaming. 5Step Five - Make Your Move (Chapters 12 and 13): the authors talk about taking the last move of moving or establishing your business in a less competitive environment (the blue ocean) as they put it. (pg. 242), by conducting rapid market tests, and iteratively refine your move. This includes formalizing your big-picture business model that delivers a win for both buyers and you. The initiative is completed with a Launch and Roll Out.

With all the shortcomings that I have listed above withstanding, there is no way one is able to shift his/her business to a new environment even if the competition is less, one has to keenly evaluate various factors affecting business basing on annual analysis of the market simply because the consumers rate of consumption changes at the economic factors change. Since 2017, a lot has changed on the economic market, if someone is setting up a business or moving a business for example from a first world country to a third world country just because there is no competition, the a lot will have to be evaluated starting from the political environment of that particular are of re-location.

One must also evaluate the key reasons that are making the business not to thrive in its current location starting with the business set up and structure, Cash flow within the business, and changes on the resource market. Business growth start from proper planning, correct outline of the objective and the may source for generating cash flow for the business. Any good entrepreneur should not always think about shifting the business to a more competitive environment as the solution for your business to thrive, but formulate strategies that he/she can use to improve the business by looking at:

i. Customer relation and how it is affecting the business

ii. Gradual changes that have taken place on the economic market and how they have affected the advancement of the business,

iii. Political changes and how they are affecting the economy iv. Evaluating the management structure and how it has affected the daily developments of the business.

v. Proper analysis of the work staff within the business, sometime people may have skills but personal virtue such as integrity of the staff play a key role in determining whether a business will stay on the market or not.

CONCLUSION

Personally I can say that this book even though it talks about moving a business from a more competitive market or environment to less competitive environment, it does offer lasting solution for proper business sustainability. Shifting from one area to another infarct may lead to the collapse of the business given that every time one will have to do a fresh market research in the new areas of operation.

It is not an adequate guide to young entrepreneurs or those who are already on the market but are facing problems. Business is a key economic activity that requires proper establishment and once you gain roots on the market, even if other firms come up in the same area, one will understand how to play around with the global market trends.

Frequent business re-location due to stiff market competition leads to business failure, according to my own point of view, the success of any business goes along way more than just looking the “blue ocean” as the authors of this book suggest, this is because every year there is a gradual change on the global market that requires gradual and systematic market analysis and inter organization evaluation of all the key players in the firm sating from the management down to the staff.