[Kingpins] are people inside the organization who are natural leaders, who are well respected and persuasive, or who have the ability to unlock or block access to key resources.Blue Ocean Strategy, pg. 161
My Top 5 Takeaways From The Book ‘Blue Ocean Strategy’
First, What Is A Blue Ocean Versus A Red Ocean?
A Blue Ocean characterizes a business environment where your company essentially has no competition and unfettered access to customers interested in your product or service.
A Red Ocean characterizes a business environment fraught with competition and business leaders/management are entrenched in decision making surrounding tactically outmaneuvering competition.
Second, There Is Good And Bad In Both Blue And Red Oceans
Red Ocean business environments put stress and pressure on business organizations causing them to work to innovate and improve to survive (or not). But Red Ocean competition is not ideal or comfortable for businesses.
Blue Ocean business environments are ideal, highly profitable environments for a business to be in, but they can lead to stagnation and apathy quickly resulting in a Red Ocean business environment.
Reality is a mix of both type of environments for most businesses.
Third, What Are Some Blue Ocean Examples
Appendix A of this book has some colorful examples of businesses able to create a Blue Ocean business environment. One of my favorite examples is Henry Ford and the Model T.
In 1908 there were 500 automakers trying to bring the new, innovative combustion engine technology to market by focusing on the high-end, luxury market . This resulted in a ‘red ocean’ of competition as these automakers struggled to out-maneuver each other to sell to the burgeoning market of people willing to forgo horse-and-buggy transportation in favor of the combustion engine. When Henry Ford entered the business, he was able to create a ‘blue ocean’ of opportunity, one characterized by no competition, by innovating on simple product offerings, assembly line optimizations, and cost innovations all reducing price to a point where choosing a Model T over horse-and-buggy was almost a no-brainer. Ford Motor Company had created a blue ocean market opportunity worth billions of dollars.
Fourth, Blue Ocean Can Be Realized By Any Business Following A Framework
Don’t gamble your business on a strategy you think will benefit your company. Follow the framework defined in this book to derive your blue ocean strategy.
- Reconstruct Market Boundaries
- Focus On The Big Picture, Not Numbers
- Reach Beyond Existing Demand
- Get The Strategic Sequence Right
Fifth, Knowledge About The F-35 Program
The F-35, part of the Joint Strike Fighter (JSF) Program, is an aircraft built using a blue ocean idea - define common next generation aircraft requirements from the US Navy, Marine Corps, and Air Force, and build a common aircraft platform that all can benefit from. This idea is opposed to the one where a next generation aircraft would be defined and built for each individual branch of the service. The idea was brilliant, but the execution has been fraught with obvious difficulties, which in the end resulted in base F-35 aircraft with variants built for each service.
Ideas are welcomed, execution is worshipped.Jeff Hoffman
Successfully defining and executing a blue ocean strategy for your business can be immensely profitable. Great examples of this that Cindy and I look to are: Henry Ford and the Model T, and Marvel Comics and their sale to Disney.
With regard to the automotive industry today, I have these thoughts:
- Given the ridiculous transportation costs in 2022, the horse-and-buggy needs to be reconsidered as a primary means of cost-effective and sustainable transportation. Amish for the win.
- I personally will not consider driving an electric vehicle until the price-point gets down to around $20-$30k.
- With all of the innovation happening in the automobile industry in 1908, I am continually surprised that we do not have cars and trucks that can do better than 100 mpg today.
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