W. Chan Kim
W. Chan Kim (born 1951) is a Korean-born business theorist, Professors of Strategy and Management at INSEAD, and co-director of the INSEAD Blue Ocean Strategy Institute in Fontainebleau, France. He is known as co-author of the 2005 book Blue Ocean Strategy.
- The market universe is composed of two types of oceans: red oceans and blue oceans. Red oceans are all the industries in existence today; they are increasingly characterized by intense competition. Blue oceans are all the industries not in existence today; they are untouched and uncontested. To prosper in the future, companies need to go beyond competing; they need to create blue oceans. The issue is how to do so.
- Kim, W. Chan, and Renée Mauborgne. "Blue ocean strategy: from theory to practice." California Management Review 47.3 (2005). p. 105
- Struggling to stay ahead of your rivals? No need. Instead of trying to match or beat them on cost or quality, make the other players irrelevant--by staking out new market space where competitors haven't ventured.
- Kim, W. Chan, and Renée Mauborgne. "Value innovation." Harvard Business Review, January 1997 (2008).
- In a nutshell, Blue Ocean Strategy proposes that strategy can shape industry structure, whereas competitive strategy sees strategy as choosing the right position under given structural constraints. The field of strategy has been long dominated by a structuralist view; in other words, the idea that the industry’s structure is fixed. Strategy, as commonly practiced, tees off with industry analysis and is conventionally about matching a company’s strengths and weaknesses to the opportunities and threats present in the existing industry. Here, strategy becomes a zero-sum game where one company’s gain is another company’s loss, as firms are bound by existing market space.
Blue Ocean Strategy, 2005Edit
W. Chan Kim and Renee Mauborgne, , Blue Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant, Boston: Harvard Business Press, 2005; 2016 extended edition.
- The only way to beat the competition is to stop trying to beat the competition.
- p. 4 (2016 extended edition)
- Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.
- p. 13 (2016 extended edition)
- Value innovation is created in the region where a company's actions favorably affect both its cost structure and its value proposition to buyers. Cost saving are made by eliminating and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economics kick in due to the high sales volumes that superior value generates.
- p. 15
- Value innovation requires companies to orient the whole system toward achieving a leap in value for both buyers. The simultaneous pursuit of differentiation and low cost.
- p. 17-18 (2016 extended edition)
- The document normally kicks off with a lengthy description of current industry conditions and the competitive situation. Next is a discussion of how to increase market share, capture new segments, or cut costs, followed by an outline of numerous goals and initiatives. A full budget is almost invariably attached, as are lavish graphs and a surfeit of spreadsheets. The process usually culminates in the preparation of a large document culled from a mishmash of data provided by people from various parts of the organization who often have conflicting agendas... Executives are paralyzed by the muddle. Few employees deep down in the company even know what the strategy is.
- p. 83-84 (2016 extended edition) As cited in: Paul R. Niven (2010). Balanced Scorecard Step-by-Step. p. 99
- Description of how an average strategic plan is being created. Kim further explains, that "... a closer look reveals that most plans don’t contain a strategy at all but rather a smorgasbord of tactics that individually make sense but collectively don’t add up to a unified, clear direction that sets a company apart—let alone makes the competition irrelevant. [p. 84]"
Quotes about W. Chan KimEdit
- Their recent publication, Blue Ocean Strategy (2005), is a summation of a decade of articles on value innovation, including one in the Harvard Business Review. Kim and Mauborgne have presented themselves as unashamed strategic iconoclasts. The thinking behind most business strategy sees the agents as either individual companies or industries as a whole. The scene for strategic activity is essentially fixed and finite. Analogies were often made with the field of battle or the theater of war. Some strategists went further in borrowing military symbols. They talked about headquarters rather than the corporate head office. The battlefield was fixed in area; no new land could be added to it or created. Any struggles that took place were zero-sum games. These conflicts were intense and bloody (in figurative terms), staining red the ground on which they were fought.
- Ciarán Parker (2006), The Thinkers 50: The World's Most Influential Business Writers and leaders, p. 93