A Critique of Blue Ocean’s Strategy
Introduction
The Blue Ocean Strategy is new with its inception in 2004 by W.C. Kim and R. Mauborgne. The theory aspect of the principle is simple but its practice has yet to be fully effective. However, issues arise in the transformation from theory to practice. Certain companies find it hard to apply the strategy. This paper attempts to critically analyze this strategy.
First off, the metaphor of in ‘Blue Ocean’ describes the uncontested market space as a blue ocean with no sharks that would compete for prey (Porter, 2008, 78). Other types of markets are red – red oceans, where the water is red due to the fierce competition one experiences. This metaphor does not bring out a clear picture of what exactly takes place (Kim, & Mauborgne, 2005, 6). Most strategy titles call for more information than the market being free of competition. A metaphor ought to have several impacts that adds value, defines the trend of main factors and gives more details than an unclear description or giving examples.
Contributions and Problems Addressed by Strategy
The book by Kim and Mauborgne offers its users a major advantage in the strategy to use in running companies. This is applicable to managers and entrepreneurs who are keen in creating a special value-adding strategy. One major benefit of the book is that it offers ways that are vital in being creative. It users are able to come up with new ways of enhancing company success.
Kim and Mauborgne’s book is flexible, non-competitive and focused towards meeting the desires of its customers and markets. They present the strategy as being quite effective to the small and medium companies which are brought in to meet the needs of the customers. The strategy has been applied by big companies like Toyota and proved effective (Kim and Mauborgne, 2005, 110). Considering the small companies being the beginners in the industry, they have a great leverage of meeting the needs of the market in addition to setting the price.
The strategy by offers small companies’ exposure to the public (Kim and Mauborgne, 1997, 105). According to Barney (1991, 104; Watanabe, 2007, 74), this will enable it to focus more on clients to grow, builds and acquires the demands of the customers and aligns with the system of company’s operations as it looks for differentiation and affordable cost.
Limitations of the Blue Ocean Strategy
However, the strategy by Kim and Mauborgne has failed to incorporate itself into the mainstream business of several industries. Relatively companies have gone on look for new areas with competitive advantage in direct competition. This may be attributed to the company lacking the needed transformational intelligence which is grounded on regular teaching and learning as well as empathy (Barney, 1991, 114). According to Barney (1991, 114) this helps to facilitate change. Consideration lies on defining change and the related opportunities for effective competition.
The change advocated for is very much necessary. A good example is the small smart car which is good for the environment. This may however affect the needs of the customer and people may not go for this change unless forced. Companies are able to note the need for change in case of an opportunity. This cannot take place if the government does not get involved (David, 2006, 24). The government’s role helps to make the process efficient and effective through formulation of policies and financially.
Assumptions
The main problem in the strategy by Kim and Mauborgne is the absence of a specific variable while analyzing. It is hard to acquire a set of commonality and discriminating factors in the success and failures. This is what takes place in the stock market (Goldenberg, Horowitz, and Marzusky, 2003, 125). These variables leads to the creation of several assumptions in terms of randomness, path dependence elements and sufficient arguments. According to Porter (1996, 65) it may lack of clarity hence ineffective.
The author of the Blue Ocean Strategy does not agree with the Porter’s assumptions for competitive practice. The Porter’s assumption state that an organization can only be successful if they support the cost leadership as he attributes firms aim to be aligned to the generic practices similar to the ‘stuck in the middle’, as he assumes that these companies does not meet any of them (Porter, 2008, 82). Companies like Toyota are seen to be successful when they apply this strategy.
Blind Spots of the Strategy
Kim and Mauborgne’s strategy lacks sufficient answers to vital questions. The company does not offer a way of reinventing the business, it does not offer ideas on reviving a company from a fall and how to impart motivation in the ideas and accept market fears (Chan and Renée, 2005, 26).
Most business articles appreciate the market challenges, the complex nature of the business models, a well-defined nature of work and the challenges of tools used. Disregard to these issues is an ethical sin as opposed to intellectual sin (Porter, 1996, 67). The Blue Ocean Strategy did not appreciate the challenges that arise hence presenting a loop hole to the users of the strategy.
The article lacks in creativity and courage arising from sloppy discussion on the third part of ‘three characteristics of a good strategy’. The first two are common while in the third one the thought acquired as effective promotion is in fact a value proposition. One does not create an old idea and search for a ‘compelling tag-line’ (McNamara, Deephouse, and Luce, 2003, 164). It is only great ideas that are bound to agree on a ‘high concept’ depiction.
Implications and Conclusion
Blue Ocean Strategy has a great impact in companies. It is a global competitive strategy. This shows that it can help several companies thrive. However, in certain elements the strategy fails. The Blue Ocean Strategy lacks in creativity. The strategy has left out vital elements useful in the development of the company. Such tools have the ability to create companies that are strong in competitive environments. The theory aspect of the strategy does not answer a number of practical issues. The strategy offers incomplete paths to creativity hence complexity in application.
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