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January 24, 2005

Jack Covert Selects: Jack Covert Selects--Blue Ocean Strategy

By: Jack @ 8:08 PM – Filed under: Management & Workplace Culture

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renee Mauborgne, Harvard Business School Press, 256 Pages, $27.95, Hardcover, February 2005, ISBN 1591396190
Blue Ocean Strategy is another book in the sea of business strategy books. Sorry, bad pun. There are plenty of books that deal with developing strategy for competing in your existing markets, but what caught my attention with this book was Blue Ocean Strategy's focus on developing strategy in new, nonexistent markets.
The book starts with a descriptive approach and details a series of cases. Many of these companies found seams between markets to create new ones. Some examples include NetJets, NABI (Hungry), QB House (Japan), and Curves. For Curves, it was finding room between the do-it-yourself exercise market of books and videos and traditional health and fitness clubs:
"Since franchising began in 1995, Curves has grown like wildfire, acquiring more than two million customers, in more than six thousand locations, with total revenues exceeding the $1 billion mark...Curves built its blue ocean strategy by drawing on the distinctive strengths of these two strategic groups, eliminating and reducing everything else. Curves has eliminated all the aspects of the traditional health club that are of little interest to the broad mass of women. Gone are the profusion of special machines, food, spa, pool and even locker rooms, which have been replaced by a few curtained-off changing rooms."
You will find an equal amount of prescriptive how-to advice in the latter half of the book. Kim and Maubornge are big fans of the strategy canvas tool (a graphical tool for comparing customer-defined attributes among companies). You'll find out how to leverage the six types of buyer utility and understand the price corridor of the mass. They also spend time telling you how to talk to your employees, your shareholders, and your customers about blue ocean changes.
I don't recommend very many hard-core strategy titles, so that should give you some idea of what I think about the book. If you want to read an excerpt from Blue Ocean Strategy, visit http://www.800ceoread.com/excerpts. (Coming Soon)
BTW, IF YOU ARE INTERESTED IN GETTING THE FREE MONTHLY REVIEWS I DO, JUST EMAIL ME AT JACK AT 800CEOREAD DOT COM AND I'LL PUT YOU ON THE LIST.