Is blue ocean strategy applicable to all types of industries including businesses that are several steps upstream from consumers?
Kim & Mauborgne: Yes, blue ocean strategy applies across all types of industries from the typical suspects of consumer product goods to B2B, industrial, pharmaceutical, financial services, entertainment, IT, and even defense. Blue ocean strategy drives this point home by highlighting a rich array of companies creating blue oceans across diverse, and unexpected, industry domains from NetJets in jet travel, to Cemex in cement, to Cirque du Soleil in entertainment. Our experience further suggests two interesting findings with respect to businesses several steps removed from the final consumer. First, companies in these industries tend to view their businesses as commodity businesses with little room to offer innovative value. This has effectively created a self-fulfilling prophecy in that the more these companies view their businesses as commodities, the more they treat their businesses as such. Secondly, we observed that the more removed companies are from the final customer, the more levers there are to unlock innovative value as every company in that chain can be viewed as a customer. If a company can’t see an opportunity to unlock innovative value for the next direct customer in that chain, there are still opportunities to unlock innovative value for that customer’s customers, and so forth.