01Oct '08

The Chaotic Blue Ocean

Review of Business Research

Theme: Theoretical exploration of the relationship between Chaos theory and blue ocean strategy.

Summary: This paper explores the relationship between Chaos theory and blue ocean strategy. The author notes that Chaos theory has proliferated into an array of mathematical problems over the last century with implications for a number of real world problems such as mapping ocean currents or evaluating coronary blood flow. The author argues that change is central to Chaos theory and correspondingly, the only constant for businesses and their environments is that they continue to change. Changes can come both from internal and external sources and can lead to opportunity or disaster for an organization. The author argues that blue ocean strategy allows companies to take advantage of chaos, by outlining a systematic approach to searching for and identifying opportunities, and then capturing them for gain. In mathematical and scientific disciplines, chaotic events that initially appear to be vague and random, when studied with the proper tools, prove to have predictable and controllable features that often yield new insights and allow the observer to solve problems. The study suggests that similarly blue ocean strategy brings a sense of order and understandability to working with chaotic business environments. By providing tools and frameworks such as the six paths framework for reconstructing market boundaries; visualizing strategy with big picture tools; reaching beyond existing demand; realizing value innovation and overcoming organizational hurdles, blue ocean strategy essentially provides a methodology whereby chaos from which opportunities are born that can be developed and cultivated into a new product or service.

Reference: Becker, Hilary M. “The Chaotic Blue Ocean.” Review of Business Research 8 (October 2008): 125-131.
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