Review

An important book that bridges the worlds of business strategy, positioning and product strategy. The book contains a number of practical frameworks and insights that’ll help you assess your relative position in the market and find new ways to provide differentiated value.

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Key Takeaways

The 20% that gave me 80% of the value.

Blue Ocean Strategy provides a systematic way to escape overcrowded industries (“red oceans”) by creating uncontested market space (“blue oceans”). Instead of competing for a bigger slice of existing demand, organisations can expand the market frontier and make rivals irrelevant. This approach hinges on value innovation—the pursuit of both differentiation and low cost—to unlock significant buyer value while reducing cost structures.

Value Innovation: The Core Concept

Blue ocean strategy focuses on value innovation, rejecting the conventional trade-off between higher value and lower cost. By aligning a company’s entire system of activities in pursuit of both, organisations can attract new demand and render competition moot. In practice, value innovation involves:

• Eliminating: Which of the factors that the industry takes for granted should be eliminated?
• Raising: Which factors should be raised well above the industry's standard?
• Reducing: Which factors should be reduced well below the industry's standard?
• Creating: Which factors should be created that the industry has never offered?

This “eliminate-reduce-raise-create” formula shapes a brand-new value curve that offers buyers a leap in utility at a lower cost.

Key Tools and Frameworks

1. The Strategy Canvas

A diagnostic and action framework that shows where current competitors invest and which elements matter to customers. The horizontal axis plots competitive factors, while the vertical axis indicates offering levels. By highlighting a company’s and rivals’ value curves, the strategy canvas pinpoints where the field is crowded and how to stand apart.

2. Four Actions Framework & ERRC Grid

The four actions (Eliminate, Reduce, Raise, Create) encourage companies to rethink deeply held assumptions about what their industry competes on. The complementary ERRC grid (Eliminate-Reduce-Raise-Create) structures these moves, ensuring balanced attention to both cutting costs and adding innovative features.

3. Buyer Utility Map

Explores the full buyer experience cycle (Purchase, Delivery, Use, Supplements, Maintenance, Disposal) across six utility levers (Productivity, Simplicity, Convenience, Risk, Fun/Image, Environmental Friendliness). This helps identify hidden pain points and new angles for delivering unprecedented utility.

4. Pioneer–Migrator–Settler (PMS) Map

Classifies existing and new offerings by their degree of innovativeness.

• Pioneers create unique value curves that can unlock new demand.
• Migrators improve on existing industry offerings but don’t reshape boundaries.
• Settlers stay mired in me-too strategies and offer marginal gains.

The Eight Principles of Blue Ocean Strategy

Blue ocean strategy principles guide both formulation and execution in an integrated way, ensuring minimal risk and maximum opportunity.

Formulation Principles

1. Reconstruct Market Boundaries

Rather than accepting industry conditions as fixed, systematically look beyond conventional boundaries through six paths: alternative industries, strategic groups, the chain of buyers, complementary offerings, functional/emotional appeal, and time-based trends.

2. Focus on the Big Picture, Not the Numbers

Conventional planning often gets lost in data. Instead, use visuals—like the strategy canvas—to see how the current strategy compares and develop a clear picture of your new value curve.

3. Reach Beyond Existing Demand

Don’t just fight over current customers; unlock non-customers. Examine the three tiers of non-customers (“soon-to-be,” “refusing,” and “unexplored”) to identify major commonalities that can spark new demand.

4. Get the Strategic Sequence Right

The strategic sequence flows as follows:

1. Buyer Utility: First, assess if your business idea provides exceptional value to buyers. If no, rethink your concept. If yes, proceed.
2. Price: Determine if your price point is easily accessible to your target mass market. If no, reconsider your pricing strategy. If yes, continue.
3. Cost: Evaluate if you can achieve your cost targets while maintaining profitability at your strategic price. If no, revisit your cost structure. If yes, move forward.
4. Adoption: Identify potential adoption hurdles that might prevent your idea from succeeding in the market and ensure you’re addressing them proactively. If no, rethink your adoption strategy. If yes, you’ve reached the final stage.

Execution Principles

5. Overcome Key Organisational Hurdles

Execution often stalls due to four hurdles:

1. Cognitive: People underestimate the need for change.
2. Resource: Scarce budgets force trade-offs.
3. Motivational: Resistance or foot-dragging in the ranks.
4. Political: Internal or external opposition from vested interests.

Tipping point leadership helps tackle these by focusing on the few key influencers, using fishbowl management for transparency, and neutralising detractors while building coalitions of support.

6. Build Execution into Strategy

Integrate fair process to earn trust and voluntary cooperation:

1. Engagement in decisions that affect people
2. Explanation of why decisions are made
3. Expectation Clarity on roles, goals, and performance measures

Fair process ensures buy-in, speeding and improving execution quality.

7. Align the Value, Profit, and People Propositions

A compelling offering (value proposition) is not enough; you also need a solid profit proposition (achieving target costs and margins) and a people proposition (motivations, incentives, credibility). When all three align around differentiation and low cost, imitation becomes harder and sustainability improves.

8. Renew Blue Oceans

Over time, copycats emerge and erode your unique market space, turning the ocean red. Monitor your value curve for convergence with competitors. When it converges, it’s time to pivot or launch another blue ocean move. Multi-business firms can use the dynamic PMS map to keep an optimal mix of settlers (cash now), migrators, and pioneers (growth and renewal).

Ten Common Red Ocean Traps

1. Customer-Led Focus: Fixating on current customers rather than non-customers stifles new demand.
2. Leaving the Core: Believing you must enter far-flung businesses overshoots simpler in-core opportunities.
3. Equating Technology with Value: Technology is only a means; it must link to clear buyer utility.
4. Pushing First-Mover Advantage: Speed matters, but tying innovation to value matters more.
5. Confusing Blue Ocean with Pure Differentiation: Blue oceans pursue both differentiation and low cost, not just one.
6. Equating Blue Ocean with Low Cost Alone: Both buyer value and cost savings must be addressed.
7. Treating Innovation as Inherently Blue: An innovation that fails to offer a leap in value won’t create a new market.
8. Reducing Strategy to Marketing or Niche: Blue ocean moves require holistic alignment, not mere segmentation or marketing.
9. Competition Always Good: Excessive competition can erode profit; blue oceans avoid this trap.
10. Conflating Blue Ocean with Disruption: Blue ocean strategies can create new demand without necessarily displacing existing offerings.

Blue Ocean Strategy moves beyond fighting rivals. It is about redefining market boundaries to make competition irrelevant. By linking innovation to value and focusing on non-customers, organisations can simultaneously pursue differentiation and low cost. Through its eight principles—four for formulation and four for execution—leaders learn to systematically create, deliver, and sustain blue oceans. The ultimate objective is robust, profitable growth driven by true leaps in buyer value, not by incremental enhancements or price slashing. By embracing these tools and avoiding the common red ocean traps, companies can repeatedly sail out of bloody waters and into the clear horizons of new market space.

Deep Summary

Longer form notes, typically condensed, reworded and de-duplicated.

Part One: Blue Ocean Strategy

Chapter 1: Creating Blue Oceans

Companies thrive by creating new market space rather than battling rivals in existing markets. The only way to beat the competition is to stop trying to beat the competition altogether. This means shifting focus from competing head-on to pursuing untapped opportunities that make rivals irrelevant.

Red oceans represent existing industries with defined boundaries and fierce competition for limited demand. As competition intensifies, profits shrink, products commoditise, and the waters turn “bloody.” Blue oceans, on the other hand, are undiscovered or newly created market spaces with fresh demand. They offer high profit and growth potential because rules and boundaries have yet to be set, making competition irrelevant.

History shows that industries continually evolve, expand, and even emerge anew. Companies can create entirely new industries or transform existing ones by looking beyond conventional assumptions, leading to innovative offerings that unlock new demand.

Research indicates that most product launches stay in red oceans and yield modest returns. However, a smaller portion focused on creating blue oceans can produce disproportionately large profits and revenue growth. By pioneering new market space, firms can escape price wars and commoditisation.

Globalisation, technological advances, and saturated markets have intensified competition and driven down profit margins in many sectors. Creating uncontested market space has become essential to avoid competing solely on price and to sustain profitable growth.

The best unit of analysis for understanding how to create new market space is the strategic move, not the company or industry. A strategic move involves the set of actions and decisions that gives birth to a new value proposition. High-performing firms use these moves to break market boundaries and capture new demand.

Value innovation lies at the core of blue ocean strategy. It rejects the traditional assumption that companies must choose either differentiation or low cost. Instead, firms achieve both simultaneously by driving costs down and delivering a leap in value (through differentiation). This approach calls for realigning a company’s entire system of activities (utility, price, cost, and the people involved) to open up new demand.

Comparing Red and Blue Ocean Strategies

• Market Space: Red oceans work within known boundaries; blue oceans create new ones.
• Competition: Red oceans try to outperform rivals; blue oceans make the competition irrelevant.
• Demand: Red oceans exploit existing demand; blue oceans create and capture new demand.
• Value-Cost Trade-Off: Red oceans accept the trade-off; blue oceans break it by pursuing both low cost and differentiation.
• Strategic Alignment: Red oceans force a choice—either cost leadership or differentiation; blue oceans align the entire business system to offer both.

The Eight Principles of Blue Ocean Strategy and Associated Risks

Formulation principles:

1. Reconstruct Market Boundaries (search risk)
2. Focus on the Big Picture, Not the Numbers (planning risk)
3. Reach Beyond Existing Demand (scale risk)
4. Get the Strategic Sequence Right (business model risk)

Execution principles:

5. Overcome Key Organisational Hurdles (organisational risk)
6. Build Execution into Strategy (management risk)
7. Align Value, Profit, and People Propositions (sustainability risk)
8. Renew Blue Oceans (renewal risk)

These principles guide how to systematically formulate and execute blue ocean moves while balancing opportunity and risk. They help leaders identify new market frontiers, shape effective strategies, mobilise their organisations, and ensure long-term success beyond overcrowded red oceans.

Chapter 2: Analytical Tools and Frameworks

The strategy canvas is both a diagnostic and action framework that helps companies visualise their current position in known market space and identify opportunities for creating new, uncontested market territory. On the canvas, the horizontal axis reflects the factors on which an industry competes (price, product features, marketing channels, etc.), while the vertical axis indicates the levels at which companies deliver on those factors. Plotting these factors reveals each company’s value curve—its unique blend of strategic investments.

To break away from the industry’s common assumptions, the four actions framework (eliminate, reduce, raise, create) guides companies in reconstructing buyer value:

• Eliminate: targets long-standing factors that no longer add value. Which of the factors that the industry takes for granted should be eliminated?
• Reduce: re-examines elements that are overdesigned. Which factors should be reduced well below the industry's standard?
• Raise: pushes up elements that are undervalued. Which factors should be raised well above the industry's standard?
• Create: adds new elements that the industry never offered.Which factors should be created that the industry has never offered?

This systematic process moves companies beyond the usual trade-off between differentiation and low cost.

The eliminate-reduce-raise-create (ERRC) grid is a simple but powerful way to ensure action on all four of those levers. It prevents companies from merely adding features (which can drive costs up) and forces equal attention on which factors can be dropped, which can be dialed down, and which new sources of value can be introduced. The grid thereby keeps strategies focused on both cost savings and increased buyer value.

Good blue ocean strategies share three common characteristics:

• Focus: concentrating on the factors that truly matter rather than spreading effort across every possible dimension
• Divergence: signals that a company’s value curve clearly sets it apart from rivals.
• A compelling tagline: a strategic message to connect quickly with customers, ensuring the offering is both understandable and appealing.

Value curves, once plotted, can reveal important insights: potential red ocean traps where a company simply mimics competitors; overdelivery or overspending that adds no real value; and strategic contradictions—areas where a company claims to excel in one dimension but undermines it with poor execution in others. The language used on the strategy canvas (technical or customer-centric) also reveals whether a strategy is driven by internal assumptions or genuine buyer needs.

By applying the strategy canvas, the four actions framework, and the ERRC grid, companies can avoid head-on competition and instead reorient toward new demand. These tools minimize risks by prompting a thorough challenge to industry norms and systematically guiding strategic choices that lift both buyer value and cost efficiency.

Part Two: Formulating Blue Ocean Strategy

Chapter 3: Reconstruct Market Boundaries

Reconstructing market boundaries is about escaping head-to-head rivalries by looking beyond conventional definitions of how an industry competes. Rather than guessing or following intuition, managers systematically search across industry and market limits to identify new opportunities for value creation—pursuing both differentiation and low cost at once.

6 Patterns for creating blue oceans

1. Look Across Alternative Industries

Companies often overlook that buyers trade across fundamentally different industries to fulfill the same objective. By identifying and combining the decisive advantages that cause customers to switch and eliminating or reducing everything else, firms can break free from competition.

“What are the alternative industries to your industry? Why do customers trade across them? By focusing on the key factors that lead buyers to trade across alternative industries and eliminating or reducing everything else, you can create a blue ocean of new market space.”

2. Look Across Strategic Groups within Industries

Within any industry, there are strategic groups separated by price and performance. By understanding why buyers trade up or down between these groups and combining the best elements of each, companies can create an unprecedented offering.

“What are the strategic groups in your industry? Why do customers trade up for the higher group, and why do they trade down for the lower one?”

3. Look Across the Chain of Buyers

Purchasers, users, and influencers can be distinct groups with different definitions of value. Shifting focus to another group in the chain—from the user to the purchaser, or vice versa—can unlock hidden demand.

“What is the chain of buyers in your industry? Which buyer group does your industry typically focus on? If you shifted the buyer group of your industry, how could you unlock new value?”

4. Look Across Complementary Product and Service Offerings

Buyers often confront obstacles before, during, or after using your product or service. By identifying and solving these pain points, companies can significantly raise buyer value and open up new demand.

“What is the context in which your product or service is used? What happens before, during, and after? How can you eliminate these pain points through a complementary product or service offering?”

5. Look Across Functional or Emotional Appeal to Buyers

Industries usually compete on either functional features or emotional appeal. Challenging that orientation—by stripping away extras to create a simpler, lower-cost offering or by adding emotion to spark new demand—can open uncontested market space.

“Does your industry compete on functionality or emotional appeal? If you compete on emotional appeal, what elements can you strip out to make it functional? If you compete on functionality, what elements can be added to make it emotional?”

6. Look Across Time

Instead of reacting to trends, companies can actively shape them by envisioning how they will change future buyer value. Identifying decisive, irreversible trends with clear trajectories offers a way to form strategies that leap ahead of the competition.

“What trends have a high probability of impacting your industry, are irreversible, and are evolving in a clear trajectory? How will these trends impact your industry? Given this, how can you open up unprecedented customer utility?”

From Head-to-Head Competition to Blue Ocean Creation

• Industry: Focus on rivals within industry → Look across alternative industries
• Strategic Group: Focus on position within group → Look across groups within industry
• Buyer Group: Better serve existing buyers → Redefine the industry buyer group
• Offering Scope: Maximise value within industry bounds → Look across to complementary offerings
• Orientation: Improve price within industry orientation → Rethink functional-emotional orientation
• Time: Adapt to external trends → Shape external trends over time

Chapter 4: Focus on the Big Picture, Not the Numbers

Focusing on the big picture, rather than drowning in spreadsheets and tactical details, helps organisations conceive strategies that break from the competition and steer clear of red oceans. Traditional strategic planning often yields a jumble of initiatives and budgets instead of a clear path forward. By centering on a concise visual representation, managers can develop a unified direction that unlocks fresh value for both customers and the company.

Drawing a strategy canvas highlights how a firm’s current and potential offerings compare with competitors on the factors that matter. It reveals whether a strategy is focused, distinct from rivals, and simple to communicate. It also clarifies where resources can be better allocated by showing which elements can be eliminated or raised to move toward a compelling new value curve.

Step 1: Visual Awakening

Begin by drawing a picture of where you and your rivals currently invest. Label the competing factors and score how well each player, including your own firm, delivers on those factors. This wake-up call reveals hidden assumptions and contradictions. Teams often see they are spread thin, copying rivals, or emphasising issues customers don’t value.

Step 2: Visual Exploration

Send teams into the field to observe customers, non-customers, and other key players. Never outsource your eyes: by personally watching how people use or avoid your product or service, you see fresh opportunities. This phase challenges entrenched thinking and highlights features that matter most (and least) to buyers.

Step 3: Visual Strategy Fair

Have teams propose new strategy canvases and present them to a diverse group of employees, customers, and non-customers. Use simple visuals and limit each pitch to a few minutes. Attendees vote on their favourite ideas, explaining why they resonate or why they fail. This immediate feedback helps refine the best blue ocean moves.

Step 4: Visual Communication

Once the future strategy is chosen, distill it into a clear, one-page picture that compares your old and new positions. Make sure all employees understand what gets eliminated, reduced, raised, and created. This visual guide aligns decisions and investments behind the chosen curve, creating shared ownership and streamlining execution.

Pioneer–Migrator–Settler Map

A useful exercise for a corporate management team pursuing profitable growth is to plot the company’s current and planned portfolios on a pioneer-migrator-settler (PMS) map:

• Pioneers offer unprecedented value through blue ocean strategies, creating the most profitable growth through unique value curves that diverge from competition.
• Migrators provide better-than-average offerings by giving customers more for less, but don't fundamentally change the industry.
• Settlers are me-too businesses that follow industry norms, contributing little to growth and remaining stuck in red oceans.

Pioneers create the greatest profitable growth, so actively shift your balance toward them. The map forces companies to push beyond competing on minor improvements and to focus on genuine breakthroughs that redefine market boundaries.

Chapter 5: Reach Beyond Existing Demand

Reaching beyond existing demand is about unlocking a vast pool of non-customers rather than narrowly competing over the same segment of current buyers. By discovering what keeps people away from an industry, companies can find new ways to aggregate demand and significantly expand their market. This principle emphasises de-segmentation instead of over-segmentation and pushes companies to focus first on non-customers before optimising offerings for existing ones.

Two common strategy practices stand in the way of reaching beyond existing demand. The first is the almost exclusive focus on winning over current customers. The second is pursuing ever-finer segmentation that fragments markets into smaller niches. By questioning these practices, companies avoid playing in tiny slivers of the market and instead create larger growth opportunities.

Companies need to ask themselves where they place their attention—on taking market share from current customers, or on converting non-customers who have been overlooked. Focusing on the commonalities among people who avoid an industry often reveals untapped demand. Understanding these overlaps is more powerful than trying to cater to myriad small differences within the existing market.

Three Tiers of Non-customers

• First-Tier Non-customers
• These are “soon-to-be” non-customers who use an offering minimally but are ready to leave if they see a better alternative. They stay in the market out of necessity, not loyalty, creating the potential for a rapid jump in demand if their basic frustrations are addressed.
• “What are the key reasons first-tier non-customers want to jump ship and leave your industry? Look for the commonalities across their responses. Focus on these, and not on the differences between them. You will glean insight into how to desegment buyers and unleash an ocean of latent untapped demand.”
• Second-Tier Non-customers
• These “refusing” non-customers have considered an offering but rejected it. The product or service may be too costly, inconvenient, or fail to provide decisive value. By identifying the core barriers and eliminating or reducing them, companies can convert these reluctant outsiders into active buyers.
• “What are the key reasons second-tier noncustomers refuse to use the products or services of your industry? Look for the commonalities across their responses. Focus on these, and not on their differences. You will glean insight into how to unleash an ocean of latent untapped demand.”
• Third-Tier Non-customers
• These are “unexplored” non-customers who have never seriously considered the market’s offering. Often assumed to lie outside an industry’s boundaries, they can represent a large latent pool of demand if core needs are addressed in a new way.
• “What are the key reasons third-tier non-customers have never considered your industry’s offerings as an option? Look for the commonalities across their responses. Focus on these, and not on the differences. You will glean insight into how to unleash an ocean of latent untapped demand.”

When pursuing these tiers of non-customers, go for the “biggest catchment”—the group or groups where the company’s capabilities can have the strongest impact. This larger, consolidated target can yield a new mass market instead of competing for tiny slices of existing segments. By shifting attention outward, companies can build demand from new sources and capture a broader market than if they competed solely for existing buyers.

Chapter 6: Get the Strategic Sequence Right

The strategic sequence of blue ocean strategy ensures that a company’s new offering is both desirable and profitable, reducing the risk of launching a concept that fails commercially. The sequence moves systematically through four steps—buyer utility, price, cost, and adoption—so organisations can refine their ideas early, saving time and resources while maximising success.

The strategic sequence flows as follows:

1. Buyer Utility: First, assess if your business idea provides exceptional value to buyers. If no, rethink your concept. If yes, proceed.
2. Price: Determine if your price point is easily accessible to your target mass market. If no, reconsider your pricing strategy. If yes, continue.
3. Cost: Evaluate if you can achieve your cost targets while maintaining profitability at your strategic price. If no, revisit your cost structure. If yes, move forward.
4. Adoption: Identify potential adoption hurdles that might prevent your idea from succeeding in the market and ensure you’re addressing them proactively. If no, rethink your adoption strategy. If yes, you’ve reached the final stage.

To test for exceptional buyer utility, firms look at the buyer experience cycle—the six stages of Purchase, Delivery, Use, Supplements, Maintenance, and Disposal—and see how their offering removes the biggest pain points at each stage.

They then consider which stage of the experience cycle are the biggest roadblocks for each of the of six utility levers (Customer Productivity, Simplicity, Convenience, Risk Reduction, Fun and Image, and Environmental Friendliness). This creates a matrix of cycle stages and utility levers, And you can mark where to focus. Mapping these factors clarifies whether the idea solves core problems in a new, compelling way or merely offers slight improvements on existing solutions.

If an offering passes the buyer utility test, the next step is finding a strategic price that attracts the mass of buyers. Instead of pricing against industry rivals, companies examine substitute products and alternative solutions to locate a “price corridor” that captures the largest potential demand. This corridor suggests whether to set a price at the upper, middle, or lower boundary, guided by the level of patent or asset protection and by cost structures benefiting from economies of scale.

Once a price is set, the company arrives at its target cost by subtracting the desired profit margin from the strategic price. If the resulting cost is too high, firms must eliminate and reduce noncritical factors, partner to share expertise, or change the industry’s pricing model to meet cost targets profitably. Achieving this balance of utility, price, and cost leads to value innovation.

Even a promising business model can face adoption challenges from employees, partners, or the general public. Firms must proactively address fears or resistance, making the case for how the new idea benefits all stakeholders. Failing to do so can delay or derail an otherwise strong blue ocean move.

These steps—utility, price, cost, and adoption—are captured in the Blue Ocean Idea (BOI) Index, a simple test of whether an offering delivers real buyer value at an accessible price, meets cost targets, and overcomes hurdles to acceptance. By satisfying each element in sequence, companies maximise their chances of creating commercially viable blue oceans.

For each idea - mark it +, - or +/- against these questions:

• Utility - Is there exceptional utility? are there compelling reasons to buy your offering?
• Price - is your price easily accessible to the target mass of buyers?
• Cost - Does your cost structure meet the target cost?
• Adoption - Have you addressed adoption hurdles up front?

Part Three: Executing Blue Ocean Strategy

Chapter 7: Overcome Key Organisational Hurdles

Organisations pursuing a blue ocean strategy face four major hurdles in turning their vision into action: cognitive, resource, motivational, and political. Each hurdle threatens to keep the firm locked in status quo behaviours, undermining attempts to realise a bold new strategic direction.

1. Cognitive Hurdle: People must see and emotionally grasp the need for change. Because standard metrics and data can feel abstract, leaders should bring employees face-to-face with the starkest realities and the most disgruntled customers. By directly encountering operational problems and hearing frontline complaints, staff awaken to why existing routines must shift.
• Ride the “electric sewer”: Bring key individuals to witness severe operational failures firsthand.
• Meet with disgruntled customers: Listen to them directly and see the shortcomings up close.
2. Resource Hurdle: Typically, strategic change is assumed to require proportional increases in budget or headcount. Instead, leaders should concentrate resources on “hot spots” (areas that require few inputs yet yield high impact) and cut back on “cold spots” (areas with high inputs but low impact). They can also trade underused resources with other units to free up capacity.
• Hot spots and cold spots: Reallocate resources from areas with low impact to those with high impact.
• Horse trading: Exchange surplus resources for capabilities the team lacks.
3. Motivational Hurdle: Leaders often try to push change through big visions and mass mobilisation, which can be slow and expensive. Instead, “kingpins” (key influencers) should be singled out, placed in transparent “fishbowl” evaluations, and given small, achievable targets that build momentum. This approach makes high-impact achievements visible and ignites broader employee engagement.
• Kingpins: Focus on influential individuals who can drive broad change.
• Fishbowl management: Make performance transparent, shining a spotlight on actions and outcomes.
• Atomisation: Break big goals into manageable pieces so each level can see exactly what to do.
4. Political Hurdle: Whenever power structures are threatened, entrenched interests resist. Leaders must identify “angels” (those who benefit most from the new strategy) and “devils” (those who stand to lose), and they should form coalitions with angels to isolate opposition. Having a respected “consigliere” on the top team helps navigate internal politics and remove obstacles.
• Consigliere: Add a politically adept insider to the leadership team to advise on potential land mines.
• Angels vs. devils: Build alliances with supporters while neutralising or isolating opposition.

By concentrating on high-impact levers—rather than pursuing massive, across-the-board initiatives—leaders can tip an entire organisation toward rapid execution of a new strategy.

Chapter 8: Build Execution into Strategy

Poor process undermines strategy execution. When employees and stakeholders don't understand the reasons behind major changes—or feel ignored—trust evaporates, and they can actively resist or sabotage the new strategy. Even brilliant strategic moves can fail if the process used to implement them is heavy-handed, opaque, or disregards employees' knowledge and feelings.

Fair process has the power to build commitment and trust at all levels of an organisation. It goes beyond mere carrots and sticks, ensuring that people voluntarily cooperate because they feel respected, engaged, and valued. This voluntary cooperation can lead to higher-quality decisions and fast, consistent execution, especially vital when a company must venture into new, untested territory.

Fair process shapes people's attitudes and behaviours by addressing both intellectual and emotional needs. Intellectually, people need to know their ideas and expertise matter; emotionally, they want respect and dignity. When these needs are met, individuals share knowledge and go "beyond the call of duty," fuelling stronger execution.

The Three E Principles of Fair Process

• Engagement: Involve those affected by decisions. Solicit input, encourage debate, and incorporate feedback.
• Explanation: Communicate why decisions are made. Show how options were considered and how final choices serve the organisation's best interests.
• Expectation Clarity: State clear performance goals, roles, and responsibilities so that everyone understands what is expected and how success will be measured.

By observing the three E principles, companies demonstrate both intellectual and emotional recognition of their people. This recognition inspires a sense of ownership, leading to the trust, commitment, and voluntary cooperation necessary for effective strategy execution. Conversely, a lack of fair process breeds resentment and lowers morale—even good strategies can be derailed when people believe their input was ignored or their motives misunderstood.

Intellectual and recognition theory underscores why fair process matters. People want their ideas valued and their worth as individuals respected. When these conditions are met, they willingly share knowledge and devote their energy to organisational goals. But if they feel dismissed, they withhold effort and information—or actively resist. Thus, fair process builds vital intangible capital that is key to successful and sustainable strategy execution.

Chapter 9: Align Value, Profit, and People Propositions

Three distinct yet interlocking propositions underlie every successful strategy: the value proposition, the profit proposition, and the people proposition. The value proposition addresses how an offering attracts buyers; the profit proposition focuses on how the company makes money; and the people proposition explains why those involved—both employees and external partners—would support and carry out the strategy. Only when all three align in pursuit of both differentiation and low cost can a company achieve a high-performing and sustainable strategy.

The value proposition reflects the benefit buyers receive minus the price they pay. A compelling value proposition should unlock new demand and excite consumers by offering a leap in utility at a price they can afford. Differentiation does not mean overengineering offerings; rather, it focuses on what truly matters to buyers, eliminating nonessential features and costs.

The profit proposition covers how the company's business model converts sales into profits. Achieving both differentiation and low cost often requires cost innovations—from simplifying designs to collaborating with partners who bring needed capabilities. This ensures that the strategic price still yields a healthy margin, making the offering profitable to produce and deliver.

The people proposition targets employees, partners, or suppliers whose buy-in is critical to implement the strategy. Effective people propositions foster enthusiasm, reward the right behaviours, and build a culture of voluntary cooperation. Externally, it may entail fair revenue-sharing or strategic collaboration with key stakeholders, so they see clear incentives to support the new direction.

Consistency across all three propositions is essential. A brilliant new product (value proposition) is doomed if partners have no motivation to support it (people proposition) or if the cost structure makes profits impossible (profit proposition). Likewise, even a well-designed business model will fail without enthusiastic support from employees and stakeholders.

When strategies lack alignment, they often enjoy initial excitement but can't sustain results. By contrast, when value, profit, and people propositions reinforce each other, they create a robust, hard-to-imitate system. This holistic approach to strategy formulation and execution expands demand, yields healthy profits, and inspires the people and partners needed to bring the strategy to life.

Chapter 10: Renew Blue Oceans

Blue oceans do not remain uncontested indefinitely; eventually, imitators arrive to challenge a firm’s new market space. At first, well-aligned blue ocean strategies are naturally shielded by several imitation barriers. Over time, however, competition intensifies, and a once-blue ocean can gradually turn red. Knowing when and how to renew a blue ocean strategy ensures that it remains a repeatable process rather than a one-time success.

Barriers to Imitation

1. Alignment Barrier: Companies that align their value, profit, and people propositions around both differentiation and low cost create a formidable system that is hard for competitors to replicate quickly.
2. Cognitive and Organisational Barrier: Imitation requires companies to break from their conventional logic, redesign current practices, and overcome internal politics—major hurdles that slow or deter copying.
3. Brand Barrier: Blue oceans may conflict with competitors’ established brands. The original pioneer also enjoys “brand buzz” that strong marketing budgets alone rarely overcome.
4. Economic and Legal Barrier: Natural monopolies arise when the market cannot support a second player. High volumes and patents or network externalities discourage potential followers, who face perpetual cost disadvantages and legal roadblocks.

Once competing businesses realise the success of a blue ocean idea, they may still face these barriers, which buy the original creator valuable time. Eventually, though, if rivals persist—or if market conditions evolve—the blue ocean may grow crowded, and renewal becomes critical. Without renewal, a firm risks slipping back into red ocean competition focused on beating rivals rather than creating new value for buyers.

Renewal at the individual business level starts with monitoring one’s strategic profile on the strategy canvas. As soon as the company’s value curve converges with those of competitors, it should reach for another blue ocean move. However, if a firm’s value curve still diverges and shows focus, it can continue to profit from its existing blue ocean, broadening reach and deepening margins without launching a new offering prematurely.

For multi-business corporations, the pioneer–migrator–settler (PMS) map can guide portfolio renewal. Executives plot each business to see which ones are settlers, migrators, or pioneering blue oceans. Settlers generate cash today but have limited growth potential. Pioneers drive future growth but often require up-front investment. Over time, pioneers become migrators and eventually turn into settlers, so companies must regularly create new pioneers to sustain profitable growth across the portfolio.

Monitoring convergence in the marketplace and ensuring a balance of current and future growth businesses enable a firm to renew its blue ocean strategies before they become irrelevant. This renewal preserves the benefits of differentiation, low cost, and robust demand creation, allowing organisations to repeat the cycle of creating and capturing uncontested market space in a dynamic and ever-changing environment.

Chapter 11: Avoid Red Ocean Traps

Many organisations want to move out of fiercely competitive red oceans into uncontested blue oceans, yet they often misuse or misunderstand blue ocean concepts, accidentally remaining in the red ocean. Ten common traps drive these misunderstandings, anchoring organisations in traditional thinking even as they set out to break away.

Below are the ten red ocean traps and why they derail attempts to create new market space:

1. Customer-Led Focus: Mistakenly placing all focus on current customers and their preferences, rather than non-customers who reveal how to unlock fresh demand.
2. Straying Beyond the Core: Believing a leap in value must come from non-core businesses, when abundant opportunities to create blue oceans often lie at a company’s core.
3. Technology = Blue Ocean: Confusing cutting-edge technology for value innovation. Novelty alone fails if it doesn’t offer a leap in utility at an accessible price.
4. First-to-Market Obsession: Emphasising speed over linking innovation to value. Arriving first doesn’t guarantee success unless the offering resonates strongly with buyers.
5. Equaling Differentiation Strategy: Treating blue ocean strategy as pure differentiation with higher costs. Instead, it rejects the trade-off to pursue both differentiation and low cost.
6. Focusing on Low Cost Alone: Conflating blue ocean strategy with bargain-basement moves. Instead, it simultaneously raises buyer value and lowers costs.
7. Innovation = Blue Ocean: Thinking any innovation automatically leads to new market space. Without focusing on value innovation, original ideas can remain niche or unprofitable.
8. Niche or Marketing Theory: Limiting blue ocean strategy to segmentation and marketing tactics. True blue ocean moves integrate value, profit, and people propositions for sustainability.
9. Competition Is Always Good: Overlooking that beyond a certain point, intense competition destroys profit. Blue ocean strategy aims to create uncontested space and new demand.
10. Blue Ocean = Disruption: Equating new market creation with displacement of existing products. Blue ocean moves can complement rather than replace older offerings, generating nondestructive creation.

By recognising and avoiding these traps, companies can properly apply blue ocean frameworks—focusing on non-customers, balancing differentiation and low cost, and aligning value, profit, and people propositions—to chart uncontested market space that offers significant and sustainable growth.