Book Review (sort of): Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne

Autodesk is conducting a pilot of the getAbstract service, so I am trying it out. I have posted two blog articles so far:

• Book Review (sort of): The Corporation by Joel Bakan
• getAbstract: a side by side comparison

As part of our pilot I have read the summary of another book: Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renée Mauborgne. The book gets its title from markets where businesses compete. A crowded market can be considered red because it contains the blood shed by the throes of fierce competition. In contrast, a business can operate in a blue ocean, free from the blood of such competition, if it can recognize an untapped market and get there before others do.

Here is the list of Take-Aways from the getAbstract summary.

• Most corporate strategies grew from military models featuring direct confrontations.
• When businesses directly compete, the battlefield becomes over-crowded so all participants suffer from reduced market share, growth, and profits.
• The blue ocean strategy builds new businesses where none existed, giving innovative entries clear sailing. For example, businesses, such as cell phones and biotechnology, barely existed 30 years ago.
• Blue ocean industries are more profitable than fields with head-to-head competitors.
• Businesses that pursue this course should offer their customers a blue ocean "value innovation," that is, tangible product advancements accompanied by demonstrable savings.
• Blue ocean practitioners need to be prepared to wear life jackets. The six steps of blue ocean implementation each carry a risk. The six steps are:
  1. Reconstruct market boundaries
  2. Focus on the big picture
  3. Reach beyond existing demand
  4. Get the strategic sequence right
  5. Overcome key organizational hurdles
  6. Build execution into strategy
• When plotting a blue ocean course, practitioners use a "strategy canvas" to chart the competition and exploit their shortcomings. A strategy canvas is a graph where the horizontal axis captures the range of factors that the industry competes on and invests in, and the vertical axis captures the offering level that buyers receive across all these key competing factors.
• Developing a blue ocean strategy requires all hands on deck.

Based on what I have read and what we practice at Autodesk, I believe strategy needs to be based on something that:

• customers value,
• is unique, and
• cannot be easily copied by competitors.

So do you consider the Autodesk strategy to move to the cloud a red ocean or blue ocean strategy? We will continue to sell desktop applications but augment them with cloud-based services for analysis, collaboration, and ease of access to design data. We welcome your feedback at [email protected].

"Stategory" is alive in the lab.