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The authors, W Chan Kim and Renee Mauborgne, of the international best seller—Blue Ocean Strategy—have made a rare but very appealing, entreaty and, of course, a challenging statement in the preface of their book: "We believe passionately in the ideas in this book. These ideas are not for those whose ambition in life is to get by or merely to survive…. If you can be satisfied with that, do not read on. But if you want to make a difference, to create … and society win, read on. We are not saying it is easy, but it is worthwhile." At first it makes one wonder, if the authors are making use of the very strategy that they are advocating through the book to make a reader's indifference irrelevant. But a second look at it makes one wonder if there is more in it than meets the eye.
And indeed there is a lot! For, the book offers corporates a new mantra for success: "creating and capturing uncontested market space and thereby making the competition irrelevant." One may wonder: what is so new about it? Aren't marketing outfits of companies meant for creating market space? True, that is what they are essentially meant for, but according to the authors, too many companies are today fighting in the same waters—in the defined market—for their market share, as a result of which, one company's rise in market share is becoming the loss of the other company. And, obviously, the outcome of such zero-sum game—fight for increased market share by the companies within the existing market—can at best be incremental, that too, for some alone, while a few others are sure to bleed making waters red. This competition-based strategy—which the authors preferred to name "Red Ocean strategy" —is more due to the corporates' belief that an industry's structural conditions are given and firms are forced to compete within them. Driven by this belief, companies, the authors say, tend to focus on building advantages over the competition—usually by assessing what competitors in the market are doing and striving to do better than them. It is because of this simple practice, competition becomes the defining variable of strategy. Under this strategy, cost and value become the tradeoffs, and a company chooses either a distinctive cost or differentiation position. And, as the profits of the industry are also defined exogenously by the external factors, firms end up in redistributing the given wealth rather than creating fresh wealth. Another insightful advice that the authors offer to a firm is not to benchmark with the competitors, for it makes it look similar to them—this simply makes it a `me-too' firm. All this cumulatively, makes growth limited in the red ocean.
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