One thing I know about myself is that I am better when I have a full plate. To stay busy, I enrolled in the Evening MBA program at University of Washington’s Foster School of Business last fall. I have been impressed with the curriculum and faculty.
The Blue Ocean Strategy was a recent assignment. The concept is about value innovation. “Red” oceans are known industries and markets. The competition is constantly trying to outperform rivals and the waters bloody. “Blue” oceans are industries and markets that are unknown today. Demand is created rather than fought over with ample opportunity for growth and profit. Blue oceans are often created from red oceans. A competitor finds an opening to create value and finds their blue ocean. Several examples are cited.
The authors, Kim and Mauborgne, are too dismissive of red ocean companies. They state that corporate strategy is heavily influenced by its roots in military strategy. Competition, confronting the opponent and driving him from the battlefield are listed; however this is not military strategy. It is the goal of a direct attack. It made me think how the blue ocean strategy would compare to Sun Tzu’s The Art of War, one of the oldest and most successful books on military strategy.
Here are some select passages from The Art of War that conflict with the red ocean view of corporate/military strategy:
1) All warfare is based on deception.
2) In all history, there is no instance of a country having benefited from prolonged warfare.
3) Supreme excellence consists in breaking the enemy’s resistance without fighting.
Clearly, Sun Tzu would not advocate a red ocean. In contrast, The Art of War is blue ocean:
You can only be sure of succeeding in your attacks is you only attack places that are undefended.
Pretty clear talk of finding uncontested market space, capturing new demand and making the competition irrelevant. In contrast, red oceans are prolonged fights exploiting differentiation or cost. These are commodity markets, not drivers of innovation. Blue oceans are value innovators and clearly have roots in military strategy from the 6th century BC.