Seven Sins Of Blue Ocean Strategy

　　 Blue ocean The strategy provides a new strategic logic for our enterprises to get rid of the price war: value innovation. Some new tools such as value curves. But the blue ocean strategy has seven sins:

The first crime: the incomplete path of value innovation

Price war is the Red Sea. What is the way to get rid of the price war and enter the blue ocean? The blue ocean strategy has not been explained. According to its case analysis, we can conclude it into two categories, one is intra industry innovation, the other is inter industry innovation. But there is a lack of path, that is, innovation outside the industry. Many people think that it is about innovation outside the industry, which is not in line with its logic. Its value curve can prove this. The value curve is based on the key success factors of the existing industry, without taking into account the possibility of innovation outside the industry.

The second sin: the question of value curve

　　 Value curve Not a new thing. A person with a slightly strategic management base knows the key to success. In a sense, the value curve is a replica of the key success factor of the industry. The most important thing is that it can not be applied to the newly created industry, because the newly created industry simply can not find out the key factors of the success of the existing industry. Such as Tencent QQ.

The third crime: the concept of value innovation

In the blue ocean strategy, the author defines value innovation as the difference between buyer's value and cost. This is a misunderstanding of the concept of value: "the price is how much the customer pays, and the value is how much the customer gets". This is the definition of Buffett, but reveals that value is customer value, interest point or combination. Value is for customers. The value of any enterprise's product or service is expressed at the price of its customers. This is what Marx's theory says: price is the form of value. Because of this, Liao Xiao believes that value innovation should be a combination of value and interest points. Different permutations and combinations are different value innovations. That is to say, the difference in customer value and interest point in any behavior of an enterprise means value innovation. For example, Southwest Airlines is obviously different from other airlines by reducing customer consumption, increasing branch flights and other customers' value points. This is value innovation. We often say, who is valuable to you, that is, whether he can bring benefits or combinations to you. Of course, this point of interest is not just money, but also spiritual level.

Fourth sins: value innovate Source problem

Value innovation is not water without a source of value. Where does value innovation come from? According to the book, through collective discussion and expert discussion, these are biased. The definition of value has told us that customers are the source of value innovation. Only by analyzing the interests of customers, can we get new value and innovative inspiration. Even the new industry is no exception. Because that is based on the analysis of the potential value and interests of the customers, otherwise the customers' interests will not be there. Customers will certainly not be willing to pay for the purchase of your products or services.

The fifth crime: the relationship between value innovation and market structure

The blue ocean strategy does not reveal when the value innovation is, nor does it explain the relationship between market structure and value innovation. It does not elaborate on the need for different strategic choices under different market structures. This is a theoretical defect.

Sixth sins: myth of differentiation

The most fascinating aspect of the blue ocean strategy is to introduce the most fascinating idea (from the Red Sea to the blue sea) at the most appropriate time (price war). This embodies a principle of differentiation. Differentiation has long been regarded as a treasure by strategic management gurus. In fact, differentiation is only a necessary condition for strategic success rather than a necessary and sufficient condition. Differentiation is not a myth. Most differentiation can be replicated very quickly, that is, differentiation can only bring about a short competitive advantage. It is not the key to long-term competitive advantage. {page_break}

According to the theory of economics, as long as the supply is increasing, the monopoly profits and even the normal profits of the market can not be maintained. Most industries in China are in a completely competitive market pattern (many people argue that this is an ideal model, but ignore the fact that China's consumption structure of two yuan and fake and inferior products lead to zero differentiation of products). If we adopt the strategy of differentiation, people will soon imitate or pirate, just like the VISTA piracy launched by Microsoft. According to Potter theory, suppliers, purchasers, potential entrants, substitutes and existing competitors are the five forces that determine the structure of market competition. We assume that the other forces remain unchanged, taking into account the factors of potential entrants. We can see that how to prevent potential entrant from entering the market is the key to maintain competitive advantage. Tencent has opened up a new market, and other companies will soon rush to grab market, such as MSN, SKYPE and so on. Liao Xiao believes that the combination of differentiation and entry barriers is the essence of strategic success.

Otherwise, differentiation is just a myth.

Seventh sins: logical confusion

The blue ocean strategy is just a good idea. But it keeps the bad habit of management: unable to provide a complete logic system. It does not provide when to join the new blue ocean, that is, the timing of the blue ocean strategy, nor does it provide any path to value innovation, nor does it provide the source of value innovation, nor does it reveal the relationship between value appeal and value realization.

The blue ocean strategy has provided a new great idea, which is its success. Its value curve of innovation outside the industry and industry is also an effective consultation tool. But the blue ocean strategy is not a rigorous theoretical system with seven sins. The new structuralist theory advocated by Liao Xiao will make up for these defects and provide a better "operation" and "device" under the "Blue Ocean Strategy". To provide more and better complement and improvement for the blue ocean strategy is the upgrading of the blue ocean strategy.