In 2005, W. Chan Kim and Renée Mauborgne, two professors from INSEAD in France, wrote a best-selling book called Blue Ocean Strategy, based on over 15 years of research. From an entrepreneur’s perspective, what they said did not offer any astounding new insights because, as I said, great entrepreneurs seem to do this intuitively. However, how they presented their argument made you wonder why every business, young or old, doesn’t think in these terms. In Kim and Mauborgne’s view, companies need to strategize around what they call “value innovation,” in short, making the competition irrelevant by “opening up new and uncontested market space.” Their research found that what separated the winners (for example, entertainment giant Cirque du Soleil and blue ocean airline Southwest) from the losers was their ability to align their innovation strategy with utility, price, and cost. In other words, solve the customer’s problem at the right price and at the lowest cost possible. This flies in the face of traditional competition-based strategy , which says that you can't have high value at low cost - it's a trade-off.  But consider this, if you could spend less time thinking about the competition and put lots of time with customers finding unserved needs, wouldn’t that be liberating? Would you really prefer to follow a paranoid, reactive strategy based on what your competitors are doing?

 

If you haven't read the book, please do and let me know if you agree that the best way to create a competitive advantage for your company is to NOT follow the competition. Do your own thing and make them irrelevant.