Why Blue Ocean Strategy Doesn’t Work

In 2005, a little book called Blue Ocean Strategy grew into a global bestseller.

With over 4 million copies sold and industry recognition as “one of the most iconic and impactful strategy books ever written,” Blue Ocean Strategy changed the way many people thought about business. We tip our hats to the title, and the framing of the idea, because it is a legendary example of Languaging. More than 15 years later, and you will still hear people in business meetings referencing “blue oceans” and “red oceans.”

But…

There are a few problems.

The book assumes the ocean.

The book assumes incumbents are the ones that create new categories.

The book assumes blue oceans are not about technology innovation.

The book assumes Superconsumers and data-flywheels play a limited role in category domination.

The book assumes category leadership is about product and company design, not the ability to create and design categories.

Wait, Don’t Pirates Like Blue Oceans?

First of all, Pirates reject the premise! They don’t just blindly accept the way it is.

(Allows for unconstrained thinking.)

We know a lot of our fellow pirates like Blue Ocean Strategy and may be confused as to why we are writing this. We get asked about it from time to time, so we thought we’d respond with a letter to make clear the difference between Category Design and BOS — specifically where we overlap and where we meaningfully disagree. The truth is, Category Design and Blue Oceans do align nicely on a few important themes.

• Corporate strategy is rooted in military strategy and thus overly focused on competing. We totally agree! Competition is a race to the bottom. Competition is for people who make products that are undifferentiated and rely on “make the logo bigger” strategies to eke out their next quarter’s numbers. Those executives should rightly prepare three envelopes. Category creators force a choice, not a comparison.
• Companies and industries are the wrong ways to frame the world. Yes! Too many executives, analysts, and investors overly attribute a…