Why the strengths are interesting?
• Kim and Mauborgne (2004a) developed their BOS model, which provides a series of tools and
Formulation
Reordering market realities in a
fundamentally new way
Implementation
Leveraging brand recognition in new
segments
It builds execution into strategy
Monitoring
Advantages of the being “first”
frameworks as guidance for companies to create unique strategies to create and generate their
own uncontested markets.
• Blue Ocean has been successfully applied to organizations like VIAT (Value Innovation Action Tank)
of Singaporean non-profit organization, IKEA-furniture industry, Starbucks, Phillips that found to be
good organizational performance (Basri, Ghadzali, & Ismail, 2011).
• Poor Process Can Ruin Strategy Execution
• The Power of Fair Process - builds execution into strategy by creating people’s buy-in up front.
• The Three E Principles of Fair Process - engagement, explanation, and clarity of expectation.
• By organizing the strategy formulation process around the principles of fair process, you can build
execution into strategy making from the start.
• This sustainability can be traced to the following imitation barriers rooted in blue ocean strategy:
• A value innovation move does not make sense based on conventional strategic logic.
• Blue ocean strategy may conflict with other companies’ brand image.
• Natural monopoly: The market often cannot support a second player.
• Patents or legal permits block imitation.
 Examples of
Implementing the
Strategy

• Leading companies that created their

own blue oceans by pursuing
high product differentiation at a low
cost, which raised the cost of
competition.
 Ford Motor Company

In 1908, it introduced the At the time, the automobile The Model T's market share
Ford created a new
Model T as the car for the industry was still in its infancy, jumped from 9% in 1908 to
manufacturing process for
masses. It only came in one but there were around 500 61% 1921 when it officially
mass-producing standardized
colour and one model, but it automakers producing replaced the horse-drawn
cars at a fraction of the price
was reliable, durable and custom-made cars that were carriage as the principal mode
of other cars.
affordable. expensive and unreliable. of transportation

Allen, Nathen. "'Blue Ocean Strategy' Surges in Schools". Poets & Quants for Executives.
 It found a blue ocean with its iTunes music download service.

Although billions of music files were being downloaded illegally each

month, Apple created the first legal format for downloading music in
2003.

It was easy to use, providing users with the ability to buy individual
songs at a reasonable price.

Apple Inc. Apple won over millions of music listeners who had been pirating music
by offering higher-quality sound along with search and navigation
functions.

Apple made iTunes a win-win-win for the music producers, music

listeners and Apple by creating a new stream of revenue from a new
market while providing more convenient access to music.

Apple iTunes accounts for 60% of the global digital music market.
 • Allen, Nathen. "'Blue Ocean Strategy' Surges in
Schools". Poets & Quants for Executives
• Hassan Basri, J., Pisol Ghadzali, M., & Ismail, M.
(2011). Blue Ocean Strategy: Application in
Universiti Sains Malaysia Library (Vol. 5).
• Kim, W. C. and R. Mauborgne (2004a). Blue Ocean
Strategy. Harvard Business Review, 82(10), 76–84.
References • Kim, W. C. and R. Mauborgne (2004b). Value
Innovation: The Strategic Logic of High Growth.
Harvard Business Review, 82(7/8), 172–180.
• Schnaars, Steven P. 1994. Managing Imitation
Strategies: How Later Entrants Seize Markets from
Pioneers. New York: Free Press