Do you believe in Blue Ocean Strategy?

It is a nice book to read, but I always have a problem with these kinds of books (there are a lot of them). It analyzes success stories and based on this analysis a set of rules are formed. The message is then to follow these rules and you automatically end up with a great business. Unfortunately, this is not true.

Other examples include:

• Copying the Toyota Production System in any type of process
• Have an enemy (because Apple and Google had one too)
• Some will tell you not to finish high school, because they didn't and they are successful
• The Long Tail, i.e. create a niche market where bigger companies can't go to because it is not profitable

And some others. These examples worked for them, not for everybody.

I'd say it is much more useful to concentrate on providing a product which is extremely useful for customers. They will buy it then, no matter whether it's in the "red" or "blue" ocean.

If you have a product that has no competitors then you need to ask why no one else has been in that space.

You may have such a unique idea, such as when Tesla tried to build a tower that would have enabled pagers, that you will have a hard time convincing people that they need this product.

You may be better off going with an incremental approach.

Look at where you want to end up, then look at how you can improve on what people are using, and slowly, through upgrades, move them toward your ideal.

For example, look at Apple. If they had come out with the Ipad 4 years ago it would have failed, much as tablets have in the past, but, through the iphone they created a marketplace for applications, then released a larger screen for a successful product, and continue to push people into a new area.

So, I would suggest you look at the blue oceans, and see how you can slowly move people from a red ocean to swim in a new ocean, with nicer beaches, better weather and no hurricanes. :)

I agree with @philobus that creating a product that is worthwhile is the path to a blue ocean.

Some blue oceans are so niche that the market is smaller, and so is the potential revenue. I tend to hit these smaller niches because I can build the startup myself and reap the reward, and smaller niche traffic is easier to scale for. But a larger company would not build for it because it's not worthwhile to them.

When a company successfully creates a blue ocean of uncontested market space it will face operational and cognitive barriers. Other companies will eventually jump in as the company and Blue Ocean continue to expand.

Inevitably imitators attempt to grab a piece of the market share and become competition. So when should a company reach out to create another Blue Ocean? Professors W. Chan Kim and Renee Mauborgne’s (co-authors of Blue Ocean Strategy) research depicts that companies like Cirque du Soleil, Southwest Airlines, Federal Express, The Home Depot, Bloomberg and CNN went without credible challenges for ten to fifteen years.

Imitation barriers rooted in Blue Ocean Strategy have contributed to the sustainability of blue ocean strategy success stories. Natural monopolies, patents or legal permits and network externalities make it hard for competitors to imitate. Furthermore, a value innovation move may not make sense to a company based on conventional logic and imitation requires substantial changes to existing business practices.

There was a good post recently on SvN that addressed some big problems with the blue ocean approach. The blue ocean practically requires a "swing for the fences" approach. It necessitates high risk taking, deep pockets and long commitments. While it can be done and the rewards can be great, the risks may overtake the rewards.