What are the challenges when applying the Blue Ocean Strategy (by W. Chankim & R. Mauborgne) into product development process?

Question

What are the challenges when applying the Blue Ocean Strategy (by W. Chankim & R. Mauborgne) into product development process?

Answer

Introduction This approach helps businesses to develop a more flexible strategy and expand their strategic position. The Blue Ocean Strategy (B.O.S.) allows a company to develop a product into an uncontested market space described as a ‘blue ocean’ (Kim and Mauborgne 2005). The Challenges This approach is similar to other strategic theories and can be perceived as simply a way of positioning a product into a niche market (Jussani et. al. 2010). In practice, companies will find it a challenge to find uncontested ‘strategic spaces’ in a market. Niche markets which do exist may be so rare that it will be a challenge to draw consumers into them. There may only be a limited number of consumers who are attracted to a niche product which has been developed. Also, companies which have implemented a BOS do not find empty markets where there are no other competitors. Rather they create “blue ocean markets themselves” through the quality of their product development (Kabukin 2014:44). It is the quality of the product innovation and the ability to deliver consumer value which leads to success rather than finding ‘a blue ocean’. The approach has been criticised for failing to provide a useful “methodology to evaluate the BOS implementation” (Becker 2010). The strategy provides a method to develop ‘space’ for a new product, in a market, but it does not assess the success of the implementation. Conclusion The application of the BOS needs to make sure that there is an emphasis on product development and the implementation of the strategy.

References

Becker, H. (2010), Using Blue Ocean Strategy in performance evaluation. Available at http://www.freepatentsonline.com/article/International-Journal-Strategic-Management/252447368.html. Accessed at 10/10/2016 Jussani, A., Krakauer, P. and Polo, E. (2010), Reflections on Blue Ocean Strategy: A comparison with Ansoff’s, Porter’s and Hax and Wilde’s strategies. Available online at https://www.google.co.uk/?gfe_rd=cr&ei=jhLJU8XWKKzY8geSl4D4AQ&gws_rd=ssl#q=REFLECTIONS+ON+BLUE+OCEAN+STRATEGY%3A+A+COMPARISON. Accessed at 10/10/2016 Kabukin, (2014), Reviewing the Blue Ocean Strategy Is the Blue Ocean Strategy valid and reliable? Dmitrij Kabukin, Master thesis Business Administration Innovation & Entrepreneurship, University of Twente. Available online at http://essay.utwente.nl/65556/1/Kabukin%20Dmitrij_MA_Management%26Governance.pdf. Accessed at 10/10/2016 Kim, W. and Mauborgne R., (2005), Blue Ocean Strategy: From Theory to Practice, California Review of Management, Spring, Vol. 47, No. 3. Available online at http://avidium.com/wp-content/uploads/books/Blue%20ocean%20strategy%20-%20from%20Theory%20to%20Practice.pdf. Accessed at 10/10/2016