Blue Ocean Strategy - from Theory to Practice

Article Review : Blue Ocean Strategy : From Theory to Practice

Based on this article, the authors basically explained on the theory of blue ocean strategy and how the practice of this theory can give great impact towards the improvement and effective survival of the organization. According to this article, this strategy which focused into ‘no competition market space’ is essential for corporations worldwide as the nature of market nowadays are mainly concentrated towards competition. This is because of with too much cutthroat competition or known as red oceans, market space will become crowded which negatively impact their profits and growth. Therefore, to formulate blue ocean strategy, few methods can be adopted such as strategy canvas, four actions framework and eliminate-reduce-raise-create grid. In examining these framework and tools, authors demonstrate them through looking into U.S wine industry.

In my opinion, strategy canvas is perceived as unclear tool to be used in developing blue ocean strategy. Strategy canvas is a tool used to visualize the value curve of organization against their competitors by analyzing factors affect competition. However, the competing factors identified is merely based on the judgement and intuition of managers rather than based on statistical data (Ng, Lou & Wan Ismail, 2011). This will result in wrongly analysis of exact competing factors which is one of the fundamental component of strategy canvas to create blue ocean strategy. This is further support by Raith, Staak & Wilker, 2007 said that strategy canvass do not clearly defined on how to assess the level of competing factors.

Besides, despite positive outcomes could be gained through practicing blue ocean strategy, there are some issues arise by few other researchers. Firstly, it will impose great challenge for new firm to establish new market demand especially in short term. Consequently, lack of information and past data will lead them to gain lower profits. This is because of, creating good new market demand usually need organization to go through red ocean first to allow them to access new market demand (Burke, Stel & Thurik, 2008). Besides, other criticism is that, blue ocean strategy are not suitable to anticipate future. This is because of some of the tools stated are unsuitable to create something new although they are excellent in providing good result for retrospective analysis (Kampa, Cziulik & Amodio, 2013).

In conclusion, for an organization to effectively embrace blue ocean strategy, the leaders of the organization must equip themselves with sufficient knowledge first before making any judgement and decision. This is indeed useful especially when leaders decided to create the value curve in strategy canvas. Therefore, rather than based on their own intuition, it is best for leaders to mainly depends on statistical data as well since it gives more accurate result. Moreover, role of a leader is also important as they have to ensure their organization is committed to invest in innovation for profitable growth. This can be done by ensuring their organization is well prepared first with sufficient knowledge and data to reconstruct the new market demand especially. Lastly, a well structured strategic planning is essential for organization as they have to effectively create and capture new demand well in order to ensure further growth of their organization. Without a good strategic planning, the organization unable to exploit the opportunity in which affect them to be left behind and consequently result to failure.