Is Blue Ocean Strategy Risky? Examples & Key Disadvantages

Sep 1, 2021

The blue ocean strategy has one big, gigantic, disadvantage that you might need to hear.

But first, a little pop quiz for ya (hint: I’ve already said the answer)...

What book sold over 3 million copies...

Was translated across 44 languages…

Was written in 2005…

Was written by Detroit-based researchers, Chan Kim and Renee Mauborgne who wanted to understand how American companies could compete against Japanese ones...

The authors ended up consulting for the Malaysian government and multinationals…

Drum roll please...

Blue Ocean Strategy!

...which was followed by Blue Ocean Shift.

The red ocean vs. blue ocean analogy is still popular to this day and is being used by marketers, founders, CEOs, and investors.

Now, I have nothing against the authors. In fact, I have incredible respect for them and their work. To develop such a successful book is one of the hardest things to do in the business world. So, this is nothing against them, but...

How people interpret the blue ocean analogy and put it into practice is often an issue. I've talked about it before when I ranted about the bullshit of category creation.

What’s more, there’s one very critical problem that, if addressed properly, will help you stand the f*ck out.

Blue ocean? More like a gigantic blood bath.

Red ocean strategy versus blue ocean strategy.

The conventional interpretation of the red ocean vs. blue ocean analogy is that:

Each industry has its own red ocean and competitors are sharks hunting down fish (market share) — implying there’s blood, hence the “red” ocean.
In a red ocean, companies vie for market share, exploit existing demand, and try to beat the shit out of the competition.
On the other hand, blue oceans are the industries NOT in existence today, untainted by competition (that’s why it’s blue), where all the little fishes (market share) are there for you to catch. It’s the dream.

The solution sounds simple…

...Just find people who aren’t customers within a given industry, and solve their problem in a new way.

...If you do that, you can end up making billions like Cirque du Soleil, Swatch, Viagra, or the Sony Walkman… riiiiiiiiiiiiight???

Not so fast, skipper.

That’s the problem with the blue ocean… It’s just one big illusion.

That’s why trying to create a blue ocean gives you one big disadvantage.

So, if there’s no blue ocean, that means there’s just a bunch of little red oceans, riiiiiiiiiiiiight???

No.

In reality, the analogy is NOT that there’s one red ocean per industry.

There’s just one red ocean.

Period.

We are all in ONE, GIGANTIC, RED ocean.

Trying to create a blue ocean gives you a disadvantage. In reality, there's only one, gigantic, red ocean.

We’re all after the same fishes, navigating around day after day, exposed to the clutter.

The key is to stop thinking like a shark and to start thinking from the perspective of the fish...

How to think like a fish and turn a blue ocean disadvantage into a red ocean advantage

Example 1: Cirque du Soleil

Cirque du Soleil did not create a blue ocean. They have many competitors.

Probably the most popular example from Blue Ocean Strategy is Cirque du Soleil as a blue ocean alternative to the circus where they remove the animals and focus on freakishly sensational human stunts.

If you think about Cirque du Soleil from the perspective of the shark, you might think you’re swimming in a purely blue, industry-specific ocean with no competition at all, but...

Not so fast, skipper.

Think about it from the perspective of the fish, all of whom have jobs to be done...

Job to be done: Beat boredom.

As a fish, you might try to beat boredom, so you could go to Cirque du Soleil, sure, but you could also go to the cinema, walk the park, visit the zoo, stay inside and read a book, or do anything else that’s fun.

Job to be done: Go on a date.

Sure, you could go to Cirque du Soleil, but you could also go bowling, have a home-cooked dinner, take a golf class, picnic, visit a museum, go to an improv comedy show, go dancing, or do anything else that facilitates growing a romantic connection.

You’re not in a Cirque du Soleil blue ocean. Thinking that way would be a massive risk.

In reality, you’re in ONE, GIGANTIC, RED ocean with lots of competition.

Example 2: Air Fry Maker

Air fry makers are not a blue ocean. There are many competing products and services.

Some consider air fry makers, which use 80% less oil than conventional fry makers, to be a blue ocean.

But again… Think about it from the perspective of the fish.

Job to be done: Give a 10th year wedding anniversary gift.

As a fish, you could give an air fry maker as a gift, but you could also give a gold bracelet, nice clothing, a fun vacation, or surprise your spouse with 10 of their favorite things on the 10 days leading up to the anniversary.

Job to be done: Lose weight while eating what you want.

Sure, you could get an air fry maker, but you could also hire a personal trainer, hire a nutritionist, read educational materials, or stop eating fried food altogether.

Once again, you’re not in an air fry maker ocean, and thinking that way would be a massive risk.

In reality, you’re in ONE, GIGANTIC, RED ocean with lots of competition.

The takeaway: there’s always competition

All the fish you’re “hunting” are in ONE, GIGANTIC, RED ocean. We are all after the same fish even if we are in completely different industries.

Specifically, the only thing that matters to fish is getting the job done, which means you always have competition to satisfy the job to be done.

As the shark, you’re competing for mental and physical availability to trigger the fish to buy from you when they have a job to be done.

Mental availability means that when there’s a specific job to be done, your brand comes to mind. This is the only situation where your brand can be truly uncontested in the mind of an individual buyer.

Physical availability means that your product/service is available where people are at. For example, if Cirque du Soleil isn’t in your city, then you probably won’t even consider it as an option for your romantic date.

4 steps to solve the blue ocean problem and thrive in bloody waters

Step 1

‍You’ll need to identify the jobs to be done, what triggers customers to buy, and alternative solutions people are considering.

How do you do that?

My best advice is to interview existing customers, either those who bought from you or a similar solution.

Adele Revella, CEO of the Buyer Persona Institute, gives us the step-by-step:

“The principle is this. You want to have a conversation with someone. No survey, no scripted questions. The only scripted question I want you to ask them is this one: take me back to the day when you first decided that you needed to solve this kind of problem or achieve this kind of a goal. Not to buy my product, that’s not the day. We want to go back to the day that when you thought it was urgent and compelling to go spend money to solve a particular problem or achieve a goal. Just tell me what happened.

The key to this interview is a conversation now. Without a script, we ask people to reflect back on that moment, and to go as deep as they can into what changed at that moment. I’ll just pick one since we’re approaching the end of the year, in January just about everybody wants to lose weight. We eat too much at the holidays and now it’s time to lose weight. Take me back to the day when you first decided that you needed to lose 5 pounds or 10 pounds or that you needed to become more fit and tell me what happened.

People will talk about how they want to be in better shape or they want to be healthier or they want to look nicer. But what we do after people give us that answer is we get them to go deep like, “Okay, why didn’t you do it sooner? What really changed to have you decide that now is the time to lose weight, or now is the time to secure your internet infrastructure, or now is the time to go on a big vacation, or remodel your home?” It’s really getting people to talk at length about what changed at that moment. And then just very gradually, walk them through every single thing they didn’t think about as they went through that real decision.”

Step 2

‍As always, use your own experience, common sense, and observations to understand the jobs to be done, the triggers, and what potential alternatives people are using.

Step 3

‍Be where the buying triggers happen when they happen to help customers satisfy their job to be done.

Step 4

‍Differentiate yourself from competing alternatives.

Something I love about Blue Ocean Strategy is their six path framework for how to differentiate.

Blue Ocean Strategy's six path framework to differentiate in the marketplace

The industry path: Instead of focusing on rivals within your industry, look across alternatives doing the same job. For example, you might determine that Christmas is a buying trigger for your air fry maker product, so you position your air fry maker as a gift.

Strategic group: Instead of competing after the same generic group of customers, you could look at underserved folks. You can try to slice and dice the data to understand if there are differences in the market that you could take advantage of or if a certain group of people are in a lot of pain.

Buyer group: Take a look at the chain of buyers. Who is really using the product? Who is influencing the decision to buy the product? Innovate to make sure that the entire chain of buyers is getting the value they need.

Scope of product or service offering: Take a look at how you can complement existing offerings. For example, if traditional circus goers tend to go to a restaurant after a show, you might want to offer some food inside your Cirque du Soleil venue.

Functional-emotional orientation: Functional use isn’t the only reason people buy.

The value pyramid reveals that people buy for many different reasons

For example, high heel shoes have no functional benefit. They’re linked to status and to feeling good. So, look beyond functional benefits to help you develop something that people love more.

To summarize

There are no blue oceans, only ONE, GIGANTIC, RED ocean
Trying to create a blue ocean gives you a massive disadvantage because doing so ignores the reality of the situation, which is that...
It’s never uncontested. Your products/services might compete with alternatives you may have never considered.
To understand your market, look from their perspective at their jobs to be done, their buying triggers, and what they consider to be competing alternatives, and use the six path framework to differentiate