Critique of Blue Ocean’s Strategy
Introduction
Blue Ocean strategy was introduced by Harvard Business Review in 2004. The strategy was formulated by W. Chan Kim and Renee Mauborgne where it came to be amongst the most popular articles in history. The article has received much praise from several scholars, it however lacks in a number of areas.
Kim and Mauborgne analyzed close to 150 positions created from 1880 to 2000 in several companies. They assessed the most pertinent businesses in these industries. This analysis focused on the most and less successful businesses. These industries range from hotels, cinemas, retail stores, airlines and automotive industries among others (Kim, & Mauborgne, 2005, 15). They looked for where the most and less effective players intersect. Additionally, they looked into the players’ area of divergence to note the common factors resulting to robust growth and development and the contrast in the winners from the survivors and the losers. Kim and Mauborgne described a gradual and similar tendency in all of the distinctive accomplishment.
The Research was published in 1997 in an article by Harvard Business Review. The article was called “Value Innovation: he Strategic Logic of High Growth” (Kim and Mauborgne, 1997, 106). The methods and tools used were tested and improved with time in several continents and issued with other articles called “blue ocean strategy” in 2004.
Article Critique
Blue Ocean 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. Maybe since the company does not have the much needed transformational intelligence which is grounded on regular teaching and learning as well as empathy (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 he 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.
Blue Ocean offers an excellent way for companies to look at the environment so as to connect with the competitive edge. However, most companies comprise of marketing and strategic departments that are in search of platforms to motivate them and replicate new platforms (Watanabe, 2007, 74). Improving the standards means that they have courage with the experiment while still hard to acquire.
The Metaphor
First off, the metaphor of the title ‘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). The main issue is that it calls for additionally information than the market being free of competition or an emerging market. 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. The title ‘blue ocean’ gives one an unclear picture of the prevalent situation.
The flaw in analysis
The main problem that arises in analyzing 150 industries is set of variables available. There rises a probability of getting a set of commonality and discriminating factors in the success and failures. This is what takes place in the stock market. However, the main problem lies in analyzing several industries in described in the blue ocean strategy (Goldenberg, Horowitz, and Marzusky, 2003, 125). The analysis calls for additional information than what the blue ocean strategy gives. Several assumptions arise with regard the variables used, randomness, path dependence elements and sufficient arguments.
Lastly, the trends discussed in the blue ocean’s strategy do not appeal sufficiently to call for additional explanation: re-making market boundaries, focus on the main thing, going above the demands of the market, manage company challenges and use of the correct strategic sequence (Porter, 2008, 82).
False Security
Any business article has to appreciate the challenges in the market, the complex nature of the business models, a well-defined nature of work and the challenges in the tools used. Disregard to these issues can be attributed as 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 authors 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. Companies like Toyota are seen to be successful when they apply this strategy.
Ignorance to the real problem
The blue oceans 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).
Blue Oceans limits ideas on creativity and courage to sloppy discussion on the third part of ‘three characteristics of a good strategy’, divergence and appealing aspect. 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.
However, there are no complete solutions to varied issues. The Blue Oceans has gone to leave a number of issues unattended effectively. The main issue that it tries to explain but does not do it effectively is on creativity. The strategy has ignored the element on creativity making the lack in this vial factor.
Conclusion
Blue Ocean Strategy has helped in many ways a companies. The strategy has grown has grown to be a global competitive strategy. These are the signs the strategy 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 most competitive environments. This would lead to internal and external success for the companies.
Reference
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
David F. R. 2006. Strategic Management, Prentice Hall: New York
Goldenberg, J. R. Horowitz, A. L. and Marzusky, D. 2003. Finding Your Innovation Sweet Spot, Harvard Business Review, 81(3): 120-129.
Kim, W. C., and Mauborgne, R. 1997. Value Innovation: The Strategic Logic of High Growth. Harvard Business Review. July. 103-112.
Kim, W. C. & Mauborgne, R. 2005. Blue Ocean Strategy: From theory to practice. California Management Review, 47(3), 105-121
McNamara, G., Deephouse, D. L. and Luce, R. A. 2003. Competitive Positioning within and across Strategic Group Structure, Strategic Management Journal, 24:161-181.
Porter, M. E. 1996. What is strategy? Harvard Business Review, 74(6), 61-78
Porter, M. E. 2008. The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78-93.
- Chan Kim, Renée Mauborgne, 2005. “Value innovation: a leap into the blue ocean”, Journal of Business Strategy, Vol. 26 Issue: 4, pp.22 – 28.
Watanabe, K. 2007. Lessons from Toyota Long Drive, Harvard Business Review, 85(7/8); 74-83.
