Article critique Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne

ARTICLE CRITIQUE 1

Article critique: Blue Ocean Strategy by W. Chan Kim and ReneeMauborgne

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Article critique: Blue ocean strategy by W. Chan Kim and ReneeMauborgne

The article speaks of Cirque du Soleil’s achievement by using theblue ocean strategy. The company was trying to make a move to make itthe strongest competitor by creating an uncontested market space,which canceled out the competition presented by its rivals. The blueocean strategy is defined as a strategic management move that wascreated by W. Chan Kim and Renee Mauborgne based on a research ofaround 150 strategic moves. According to them, companies are able tosucceed in their respective industries without necessarily competingwith their rivals. They can do this by creating “blue oceans”,which is an open market space. Focus is therefore put on strategicmoves which create value for the company and its stakeholders. Thispaper is a critique of Kim and Mauborgne’s article, Blue OceanStrategy.

Mainissues discussed

Kim and Mauborgne introduce Cirque du Soleil, a group of performerswho achieved great revenues for over a period of a century. However,recently, the company is on the brink of failure, helped by issuessuch as animal rights and other forms of entertainment. Regardless,the company has been able to maintain its competitive force bydrawing crowds of their own terms, which has helped the industry toattract more audiences and increase their profits steadily.

Inorder to achieve such great heights, Kim and Mauborgne say that thecompany aimed at re-creating the circus. This was by avoidingcompetition with their rivals, instead, creating their own openmarket space. This made competition against them irrelevant. This iswhat Kim and Mauborgne terms as the blue ocean strategy. According tothem, in order to understand their achievement, one has to understandthe red and blue ocean strategies. They say that red oceans haveboundaries, hence all competition rules apply. However, the blueocean has no boundaries, hence it is untainted by competition.

Inorder to picture the importance of the strategy, the authors raisethoughts of time travel as relates to the business world. In the next20 years, there are countless industries that will be existent, thatare not there today. Therefore, a company has the capacity ofcreating new industries and re-creating the existent one. As such,they present themselves with opportunities for growth, and doing awaywith the challenge of having to face competition. Therefore, theauthors assert that blue oceans are the answer to future economicgrowth. While building on the blue ocean strategy, the authors saythat blue oceans are not all about technological innovations and thatblue oceans help to create brands. While giving the main differencesbetween blue and red oceans, Kim and Mauborgne say that the mostsignificant aspect of blue ocean strategy is that it does away withthe central principle of conventional strategy, which suggests thatthere is a trade-off between value and cost.

Reaction

Thespirit of the article is that it explains the important terms, whichthe authors build their argument upon. From the reading, it is notedthat the foundation of blue ocean strategy is value innovation.Instead of companies focusing on competing with their rivals, theyhave to prioritize doing away with competition. Additionally,throughout the article, the authors explain how companies canformulate strategic management, first by recreating the marketboundaries, and secondly moving on to focus on the bigger picture,which is a success without competition. The article effectivelydemonstrates how to formulate the blue ocean strategy and executingit. Additionally, it explains how to overcome the majororganizational challenges.

The article positively shares between strategy and execution, anddemonstrates how organizations that are after significant growthought to act in the industry. However, the authors took into theassumption that success comes with taking the path in valueinnovation. This is regarded as a dangerous assumption, given thatvalue alone cannot convince buyers, but also marketing. Additionally,the concept of blue ocean strategy cannot be applied to all types ofproducts and services. There are some stricter regulations that makeit almost impossible for trust department to diversify. This, in thelong run, complicates implementation of the strategy, and changingthe business may turn out to be costly.

Possiblepractical implications of the strategic management issues presented

Cirque du Soleil made a strategic management move by executing theblue ocean strategy. As such, they took action to eliminate thingsthat are taken for granted in the industry, reducing factors belowindustry standards, inventing a niche market and introducing newproducts and services. From the article, it is clearly indicated thatCirque du Soleil avoided clashing with the other industry rivals,instead, concentrated on creating a new market for itself. This isthe essence of the blue ocean strategy as a strategic managementtool, which revolves around creating value and taking its business tothe next level. As such, the company becomes a game changer, andautomatically, and industry leader.

References

Kim, W.C. &amp Mauborgne, R. (2004). Blue Ocean Strategy. HarvardBusiness Review. Retrieved on 20 April 2015 from:https://hbr.org/2004/10/blue-ocean-strategy?cm_sp=Topics-_-Links-_-Read%20These%20First