BLUE OCEAN STRATEGY by W Chan Kim & Renee Mauborgne
“Large R & D Budgets are not the key to creating new market space. The key is making the right strategic moves.”

The article “Blue Ocean Strategy” by W Chan Kim and Renee Mauborgne published in the year 2005 talks about creating an uncontested market space through intelligent strategic moves. By analyzing thirty different industries across a century the writers opined that sustaining high performance standards in an overcrowded industry might not be enough for being a leader or having the major chunk of the market pie. It is possible only by altering boundaries of the currently existing industries.

Red ocean strategies as referred by the authors represent all the industries today where each and every company fights fiercely to gain the market space. The process of outperforming the competitors incurs huge cost and hence plummet the margins. The products turn into commodities leading to heavy competition and hence the market space turns bloody. On the other hand, Blue Ocean strategy demand is generated from boundaries outside the domain of the industry. Sometimes this might lead to generation of altogether new industry.

The authors have lucidly explained in the article how Cirque Du Soleil was able to create its own market space in a dying Circus industry whose performances were marred by people’s concerns for animals. Cirque was able to tweak the boundaries of both theater and circus industry and rejuvenated the Circus business by merging good points of both the industries.

Several examples of companies cited in the article belonging to various industries were indeed able to change the dynamics of the industry. Few of them were new entrants and few incumbents who overhauled its system to adopt blue ocean strategy. Moreover, these were not mere new innovations as adopted strategies were prevalent in