W. Chan Kim

Blue Ocean Strategy: From Theory to Practice

By focusing on strategies of competition in established industries, companies and researchers have overlooked the value of creating new market spaces where there are no competitors.These market spaces are called “blue oceans.” Although established industries (“red oceans”) are growing increasingly cluttered, few companies are currently attempting to create new markets. The U.S. wine industry provides an example of how various tools and frameworks can be applied in the creation of blue oceans.One such framework, the strategy canvas, captures the current states of play in the known market space.The four actions framework reconstructs buyer value elements by posing four key questions that challenge an industrys strategic logic and business model.When a particular wine manufacturer applied the four actions framework to the strategy canvas, it created a wine whose strategic profile broke from the competition and created a blue ocean. A third tool, the eliminate-reduce-raise-create grid, pushes firms to act on all four questions posed by the four actions framework and to create a new value curve.When expressed through a value curve, an effective blue ocean strategy has three complementary qualities: focus, divergence, and a compelling tagline. Embedded in the value curves of an industry is a wealth of strategic knowledge on the current status and future of a business. For example, when a firms value curve zigzags, it means that the firm does not have a coherent strategy.(SAA)

Value innovation: a leap into the blue ocean

Purpose – This paper reports the results of more than a decade‐long research journey on how firms can go beyond competing to creating uncontested market space, or “blue oceans,” that makes the competition irrelevant. Design/methodology/approach – Studies over 150 blue‐ocean creations in over 30 industries spanning more than 100 years from 1880 to 2000. Analyzes not only winning business players that created blue oceans but also their less successful competitors. Searches for convergence among the strategic moves that created blue oceans and divergence between these moves and those of less successful players caught in the red ocean of bloody competition. Findings – Finds clear strategic patterns that united the strategic moves that created blue oceans and separated these from the strategic moves that left companies battling for incremental market share in red oceans of overcrowded markets. Practical implications – This paper addresses the following key questions: How can companies create blue oceans in an opportunity‐maximizing, risk‐minimizing way? What makes the creation of blue oceans increasingly imperative? Why has the field of strategy to date paid scant attention to how to reconstruct market boundaries to open up blue oceans of uncontested market space? Originality/value – This paper makes strides in filling a central void in the field of strategy. For the past 25 years the field of strategy has focused principally on how to build competitive advantages to beat the competition within established market boundaries. While important, with supply exceeding demand in more and more industries this often leads to a red ocean of bloody competition. Instead of battling rivals, companies need to go beyond this. They need to create blue oceans of uncontested market space to prosper in the future. This article gives an insight into how firms can achieve this.

Procedural Justice Theory and the Multinational Corporation

Increasingly global strategy has been recognized to be a key determinant of the success and survival of MNCs. This is traceable, in no small measure, to the non-trivial benefits recognized as flowing from global strategy which include global economies of scale and scope, reduced factor costs, worldwide learning and enhanced competitive leverage (e.g., Yip 1989).

The Psychology of Legitimacy: Emerging Perspectives on Ideology, Justice, and Intergroup Relations

The psychology of legitimacy is increasingly central to organizations. More and more, firms are characterized by flattened hierarchies, greater individual autonomy and self-management, temporary workers, and control processes guided more by normative codes of conduct than by top-down authority relations and direct supervision. By attaining and maintaining legitimacy, firms can build loyalty and positive and productive work environments, and leaders can effect positive and sustainable change. This raises a number of important questions for managers and organizations in their search for internal legitimacy. What are the psychological antecedents to legitimacy? How can organizations best use these building blocks to leverage the creativity, energy, and dedication of their employees? Conversely, how are individuals able to legitimize discriminatory and prejudicial ideas and actions? Given that organizational control is increasingly shaped by normative group codes of conduct, what are the impacts of these legitimizing ideologies on firms? And how can managers spot and mitigate the discriminatory processes of legitimation while building on healthy ones?