Inc. Reporter Darren Dahl recently sat down with the authors of Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne, to discuss their counterintuitive approach to beating the competition.
Inc.: In your book, you say that the only to beat the competition is to stop trying to beat the competition. As a business owner, how can I find a Blue Ocean for my product?
Kim and Mauborgne:Our goal is to encourage entrepreneurs to incorporate strategy into their business models. Entrepreneurs typically have great ideas but they lack systems or methodologies to help them decide which products will be commercially successful. The Blue Ocean Strategy is a framework to help small companies grow into big ones. Our research proves that success in business is not based on just luck, it's about being smart about what you're doing.
Inc.: Does your model work for just start-up companies?
Kim and Mauborgne: No, that is a common misconception. One of the key principles of Blue Ocean Strategy is that established businesses can attract and convert groups of non-customers into paying customers for their product or service. The product or service may already be there, it just hasn't been marketed correctly. For example, Guy Laliberte of Cirque du Soleil created a circus that appealed an entire new group of theatre-going customers while Southwest Airlines changed the way people book their vacations.
Inc.: What happens if a competitor moves into my Blue Ocean?
Kim and Mauborgne: We can learn from The Body Shop about what not to do. The Body Shop revolutionized the personal care industry for over a decade with its focus on environmentally-friendly lotions and perfumes. But rather than continuing to innovate and move in new directions after competitors entered the market, the company settled into Red Ocean behavior like cutting its prices. The Body Shop has been far less successful ever since.
Inc.: Your book is based on research into over 150 examples of corporate innovation, but you've started putting your theories into practice, correct?
Kim and Mauborgne: Yes, we are working with the Singapore Economic Development Board to help them apply Blue Ocean Strategies to promoting new businesses in Singapore. It's a thrill to see our ideas put into practice. This is the next phase of our research. It's now more than theory, it's about executing on a plan.