One afternoon as my friend and I talked business strategy he told me a bit about Blue Ocean Strategy. I decided do more research in the internet on what it is all about. The strategy is embodied in the book entitled “Blue Ocean Strategy” by Professors W. Chan Kim and Renee Mauborgne and Published by Harvard Business School Press. According to the book, Blue Ocean strategy is a corporate strategy that aims to tap unclaimed markets making competition irrelevant.

In the book, “Blue Ocean” refers to an untapped market, a market wherein there is only little or no competition at all enabling anyone to claim the market for his own since it is not yet too crowded. In contrast, “Red Ocean” refers to a market where competition is very high. The market is considered as very crowded already since almost everybody is producing the same type of service and the same kind of goods.

To put it simply, Blue Ocean Strategy means to innovate something; something that makes people gives a higher value for a certain product or service. The additional cost for this innovation is reduced by eliminating product or service features that the market does not really care about.

In order that this can be understood well, a Philippine based or a “local” application must be cited. According to my friend a classic example of how the Blue Ocean Strategy was used here in the Philippines is the strategic moves of the Gokongwei group. As we all know, the Gokongwei group owns Mobile phone company, Sun Cellular and airline Cebu Pacific among other companies.

A new untapped market was opened by Sun Cellular by adding value to products already found in existing markets. They achieved this by making calls within their network free. This is a very wise move considering that the market for mobile phones has already been saturated by both Smart and Globe. As a result, people are buying into this “new market.” This is evidenced by the fact that most people in the country have a sim card and a cellphone for Sun Cellular and another sim card and a phone for other networks. Others have two sim cards in a dual sim phone.

In the airline industry, Cebu Pacific has managed to apply the Blue Ocean Strategy by adding “value” to what people really want, which is to “fly.” People don’t care about a newspaper, a hot meal or a fancily dressed flight stewardess. What people care about is that they can “fly.” In order to do this airline fares must go down since this is what people care about. Cebu Pacific did exactly just that. This forced people to buy into this “new market.”

Blue Ocean Strategist resort to “Strategic thinking” rather than “Strategic planning.” Adding “value” to products and services to claim an untapped market is what is resorted to instead of referring to it as “cutting prices” to capture a market. Its not about “crushing the competition” but rather its about “Creating new markets with little or no competition.”

Critiques may say that the Strategy has already existed a long time ago and that principles that are said to be unique to the strategy can be found in other traditional business strategies as well.

However this line of thinking is not justified. A new theory is always built upon something that has already been accepted for a long time as a scientific principle or even theory. (As similarly as the theory of relativity rest upon the foundations of the principles of electricity, gravity, thermodynamics etc.) Our way of discovering something is built upon the knowledge that has been universally accepted by the majority. No matter what the critics say, it is certain that Blue Ocean Strategy is here to stay. In the years to come, it will surely have an effect on the way future entrepreneurs, managers and leaders will think and do business.