It is often the words of management that surprise or make people smile, but in this game, the “blue ocean” strategy wins the prize: thank you for specifying this, but don’t we already know that the ocean is blue? And what does this have to do with business management?
This is obviously a metaphor: to understand it, you have to know that there are red oceans. The Red Ocean (not to be confused with the Red Sea) is that battleground crowded with the most dangerous sharks, stained with the blood of corporate competition. The “blue ocean” strategy therefore consists in getting away from all this mayhem, and steering your boat intelligently to quietly catch big fish.
This method of strategic management has been the subject of a successful book (4 million copies sold): Blue ocean strategy (Pearson, 2005), by W. Chan Kim and Renée Mauborgne, two professors of strategy at the European Institute of Business Administration (Insead). The authors speak of a “new business strategy paradigm”where decision makers innovate by finding an empty space of competition, in order to realize very important profits.
Everything starts with a diagnosis: the market for such and such a company is saturated, there is no longer any natural growth. Companies then always act according to competitors, seeking to preserve their market share by reducing costs, for example. These stabs in the water hardly pay off in the long run. Following this observation, it is necessary to start from scratch to move towards calmer waters.
Success is dangerous
The visionary leaders did not wait for the publication of the book to change the ocean: in addition to the story of Apple with its iPhone to telephone differently, or Blablacar and its carpooling to travel cheaper, the parents of this strategy mobilized lesser known examples. Take the Actifry electric fryer, from the SEB group, born in 2006: it is not more powerful or less expensive than the others, but it has chosen to produce better fries, since a kilo of fries only costs a single spoon. ‘oil. This “healthy deep fryer” has helped reach new customers.
This art of making waves by revolutionizing the market is intended to be slightly different from “disruption”, or “breakthrough innovation”: Renée Mauborgne judges that innovation is not necessarily a source of destruction of competitors. “Non-disruptive creation is about creating new markets where there were none before, so that there is no displacement of existing markets or painful social trade-offs”she told the magazine Forbes, in 2020.
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