I read Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne last month. It is a marketing book. It argues that it is not possible to beat the competition by competing and that a marketer should find new markets (blue oceans) instead competing in the (currently) saturated markets (the red oceans).

Blue Ocean Strategy suggests to find new line of customers. Competing with many other competitors in a market only reduces the profit for all parties. The only way a company can have long term success is to be open to change and consistently try to find new markets. For example if your products main target is certain gender (let’s say males) try to find a way to make that product to appeal to women instead. You can keep selling to the male customers, but you should invest your marketing resources mostly into the new blue oceans. This way you will be first to that blue ocean and therefore will have substantial advantages over the competitors.

The books gives many examples such as NetJets. NetJets is a company that offers fractional jet ownership. The idea is that people who need/like to travel by jets do so for saving time, comfort, and productivity. However, jets are expensive and therefore targeted toward very wealthy people and corporations. NetJets opened new blue ocean market by allowing its members to have fractional membership of the jets. This way instead of competing with other jet companies on selling to limited number of wealthy people NetJets opened up a whole new uncontested market.

The book also gives tools and suggestions as how to go about finding blue ocean markets and make the necessary changes in the business plan.

I don’t completely agree with the book as I believe competing can prove successful and you can’t always find new markets. However, it is a very good read as it helped me look at marketing with better understanding of it and can give myself more options when making business marketing decisions.

In terms of internet entreprenuership and online businesss, here is an absolutely great example of what blue ocean strategy is: an article by Shoemoney on making money online.