Seeing Blue: A New Strategy for Business Success

LMC examines three applications of Blue Ocean Strategy to explain phenomenal business success stories in the fields of family entertainment, computer technology and sports.

Blue Ocean Strategy (BOS) has become an immensely popular framework for systematically creating new market space, capturing new demand and making the old ideas of competition irrelevant.  In this insight article, LMC examines three success stories from very different markets where companies have adopted a Blue Ocean approach to produce dramatic results.

Blue Ocean Strategy was developed from a series of Harvard Business Review articles in the late 1990s and early 2000’s and drawn together in book form in 2005 by Professors W. Chan Kim and Renée Mauborgne. It has now reached global proportions: the book sold faster than any other in Harvard Business Press history, and there is a sizeable institute in Fontainebleau, France dedicated to the subject. 

Cirque Du Soleil: A different circus

Perhaps one of the most well-known and widespread examples of the application of Blue Ocean Strategy, which is also mentioned in Kim and Mauborgne’s book, is the travelling circus ‘Cirque Du Soleil’. 

The circus began in the early 80’s with a simple partnership of two French-Canadian struggling street performers in Quebec, Canada. The government grant they managed to secure was put to extraordinary use when they bypassed their competition by introducing non-circus themes, refining the spectators’ environment, and eliminating animals from the traditional circus repertoire. Blending operatic performances, more traditional ballet, audience participation and outragous stunts, the audiences were captivated without the need for animals and their trainers. This meant that the circus catered for a much wider audience than the traditional circus industry: the elimination of performing animals drew animal rights enthusiasts to enjoy the circus, the addition of operatic and dance elements drew the more artistic crowds, and thrill-seekers were still catered for.

The traditional circus industry was now effectively offering a completely different product - it thus became irrelevant - and the circus was able to exploit its uncontested market to its full potential. The company grew rapidly and is currently thought to support around 3,500 employees and generate an estimated annual revenue exceeding 600 million US dollars (1). 

Nintendo’s Wii: The computer as activity centre

Companies have been trying to distance their products and services from the market competition for years, but what makes BOS different is that it is not simply about distance from the competition, but about making the competition irrelevant. Building new, uncontested markets for a product is the key differential here. Nintendo is another good example of this. 

The Japanese godfather of handheld computer games consoles has always had a different angle on the market compared to its nearest rivals. Its games have purposefully shied away from the well trodden ground of shooting games, sports multi-players and standard platform enterprises of their rivals. However, with the arrival of the Wii, (pronounced ‘we’) in 2006, Nintendo not only left any competition behind, but fully emigrated to their own ocean. 

The games controller, the ‘console’, traditionally a fairly passive user-computer  interface, became an active tool with the opportunity to function as a tennis racquet, bongo drums, a wand, a steering wheel – anything that used heightened human interaction. As the computer games could now cater for such diverse needs as personal training or music practice, Nintendo began attracting large numbers of customers who had never before bought a computer game. As Cammie Dunaway, Nintendo of America Executive Vice President of Sales & Marketing, put it, "much has been reported about the ‘expanded audience’ for games, but what’s really at play is an expanded experience” (2).

When Nintendo shifted their product development from simple ‘games’ into interactive fitness workouts and all round physical involvement, they moved into an all new, uncontested ‘ocean’, where they could not only lead but be the market.