

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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Blue Ocean Strategy ends with ten Red Ocean Traps that can deter you from creating blue oceans or that jeopardize your execution. These will be phrased as myths that are then debunked:
Red Ocean Trap #1: Blue ocean strategy is a customer-led strategy focusing on existing customers.
- Reality: Blue oceans are about exploring noncustomers and creating new demand. Focusing on how to make your existing customers happier leads to red ocean thinking.
- Still, though, you need to figure out your potential customers’ pain points and why they refuse to participate in an industry.
Red Ocean Trap #2: To create blue oceans, you must leave your core business.
- Reality: It doesn’t have to be this risky or scary. Use your core competencies to discover new blue oceans, where you have a natural advantage. Redefine your industry’s boundaries instead of leaping to a new industry where you have no expertise.
- Casella wines created [yellow tail], Chrysler created the minivan, Apple created the iMac. All leveraged existing capabilities in new product areas.
Red Ocean Trap #3: Blue ocean strategy requires new technologies.
- Reality: Customers don’t care about new technology as much as they do about new value to their lives – in terms of productivity, simplicity, ease of use, convenience, and fun. Don’t obsess over new technology for its own sake, or worry that your strategy can’t survive without brand new tech.
- Starbucks, Comic Relief, and advertising company JCDecaux didn’t use new technology per se – they created a new method of solving a problem.
- And new technologies like the Segway, Philips CD-I, and the Motorola Iridium satellite phone were all technological innovations, but failed to create substantial customer value.
Red Ocean Trap #4: You must be first to market to have a successful blue ocean strategy.
- Reality: It’s more important to be the first company that makes a huge leap in customer value. Speed alone won’t create a blue ocean, and many first-to-market companies have failed.
- Apple’s iMac wasn’t the first PC, and the iPod wasn’t the first MP3 player. Facebook wasn’t the first social network. Instead, they introduced a new value innovation, then continuously leveraged their strengths to grow to immense sizes.
Red Ocean Trap #5: Blue ocean strategy is the same as differentiation strategy. (Traditionally, differentiation is defined as providing premium value at higher cost to the company and higher prices to the customer – think Mercedes-Benz.)
- Reality: Blue ocean strategy is about defining a new value curve that creates more customer value at lower cost. Rather than trying to maximize all factors, blue oceans focus on the critical value factors and eliminates unnecessary factors.
- Don’t just thinking about dialing up factors across the board – consider what you can eliminate as well.
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Here's what you'll find in our full Blue Ocean Strategy summary :
- What blue oceans are, and how you create one for your business
- Why some businesses succeed in creating blue oceans, and why others fail
- The red ocean traps you have to avoid if you want business growth