Blue Ocean Strategy Graph: Mapping Your Competition

This article is an excerpt from the Shortform summary of "Blue Ocean Strategy" by W. Chan Kim and Renee Mauborgne. Shortform has the world's best summaries of books you should be reading.

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How do you chart a blue ocean strategy graph? How do you determine whether your product is unique enough to classify as a “blue ocean”?

Kim and Mauborgne present a graphic tool to help you visualize how your product (and the strategy behind it) differs from others in the market. If your curve has a completely different shape from other curves, this implies a unique combination of value, consistent with the blue ocean strategy.

Here is how to use the blue ocean strategy chart to gauge where your business stands against competitors.

The Blue Ocean Strategy Canvas

The blue ocean strategy graph allows you to see at a glance how similar or how different your product’s offerings are from your rivals’. It consists of a two-dimensional line graph:

The horizontal axis lists the characteristics of competition, that is, the attributes of your product and its alternatives that customers consider when making a buying decision. The authors emphasize that it’s important to list only characteristics that customers actually care about.
The vertical axis represents the emphasis a company places on each characteristic—a higher score indicates a company offers more of that characteristic.

For each product, service, or company that you wish to compare, plot the value of each characteristic on the graph as a point. Then connect the points to produce a strategy curve.

For example:

Kim and Mauborgne have developed the blue ocean strategy graph to help you get an idea of how your product offerings differ from your competitors’. If your curve has a completely different shape from other curves, this implies a unique combination of value, consistent with the blue ocean strategy.

Shortform Commentary: Customer Priorities on the Strategy Chart

Kim and Mauborgne emphasize that you should only include characteristics that your customers actually care about on a blue ocean strategy chart. What they don’t mention is that sometimes, customers care more about certain things than others, even when they take them all into consideration. There are a couple of ways you could enhance your blue ocean strategy chart to reflect the priorities that customers put on different characteristics.

One way would be to sort the characteristics from most important to least important. As you interview customers to figure out what characteristics they care about, ask them which characteristics are more important to them than others. Once you determine how your customers prioritize different product characteristics, put the most important one at the left edge of the chart, followed by the others in order of importance from left to right. If the example chart above had been organized this way, it would show that customers care most about price and second-most about reliability, while training is the least important characteristic that they care about.

Another way would be to scale the height of each characteristic on the chart according to how important it is. In this case, the first step would be to talk to your customers and find out how much they value each of the different characteristics of the product. Then, based on their answers, assign a weight factor to each characteristic. The weight factor is a number that indicates how important that characteristic is. When you plot the value that a particular product provides on your chart, multiply the value by the weight factor for each characteristic. The chart below shows the original product strategy curve, the weight factors, and the resulting weighted strategy curve, to illustrate how multiplying by the weight factors visually exaggerates the characteristics that are more important to customers.