The sustainability and renewal of Blue Ocean Strategy

Shifting to the next segment in our Blue Ocean Strategy Basics series, in parallel with the book’s sequence, we will focus on the sustainability and renewal of Blue Ocean Strategy in the coming weeks.  Once featured, each facet in this series is made accessible through the Blue Ocean Strategy Basics archive of this site.  For our introduction to this topic, we turn to pages 185 — 186 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).

Barriers to Imitation

A blue ocean strategy brings with it considerable barriers to imitation. Some of these are operational, and others are cognitive. More often than not, a blue ocean strategy will go without credible challenges for ten to fifteen years, as was the case with Cirque du Soleil, Southwest Airlines, Federal Express, The Home Depot, Bloomberg, and CNN, for starters. This sustainability can be traced to the following imitation barriers rooted in blue ocean strategy:

• Value innovation does not make sense to a company’s conventional logic.
• Blue ocean strategy may conflict with other companies’ brand image.
• Natural monopoly:  The market often cannot support a second player.
• Patents or legal permits block imitation.
• High volume leads to rapid cost advantage for the value innovator, discouraging followers from entering the market.
• Network externalities discourage imitation.
• Imitation often requires significant political, operational, and cultural changes.
• Companies that value-innovate earn brand buzz and a loyal customer following that tends to shun imitators.

[Image via Senex Prime.]