Capítulo 1
Step One: Get Started
The first step tackles how to choose the right place to start your blue ocean initiative. For startups or organizations with a single offering, the scope is straightforward - focus on creating or transforming that offering. But for complex organizations with multiple offerings, choosing the right scope requires the pioneer-migrator-settler map, a simple yet powerful tool that assesses your current portfolio.
Traditional portfolio assessment relies on market share and industry attractiveness, suggesting that large market share in attractive industries indicates little need for strategic change. But market share is a lagging indicator reflecting past, not future performance. The pioneer-migrator-settler map replaces these metrics with "value" and "innovation," forcing you to evaluate what you currently deliver to buyers rather than resting on past achievements.
When selecting which business or offering should be the focus of your blue ocean initiative, apply four key criteria:
1. Choose a settler or low migrator clearly swimming in a red ocean
2. Ensure it's headed by an enthusiastic manager who believes strategic rethinking is essential
3. Select a unit without other major initiatives underway
4. Prioritize offerings "with their back against the wall" - those facing financial pressure or competitive encroachment
Creating the right team is equally crucial. The team should include representatives from all functions involved in bringing the offering to market: HR, IT, marketing, finance, manufacturing, R&D, sales, and frontline staff. This cross-functional collaboration prevents organizational silos and ensures ideas are built for execution from the start. The optimal team size is 10-15 people - enough to represent all major functions while remaining flexible and fast-moving.
Capítulo 2
Step Two: Understand Where You Are Now
The strategy canvas diagnostic tool provides an objective picture of current industry dynamics and your competitive position. It communicates four key elements: factors of competition, offering levels, strategic profiles, and cost structures.
The strategy canvas exposes industry commoditization by showing the convergence of competitors' strategic profiles. This pattern appears across industries - from retail banks to gas stations to law firms - where organizations focus on one-upping competition rather than differentiation.
To make a blue ocean shift, your strategic profile must meet three criteria: it must clearly diverge from the industry average (not just offer more or less of the same); it must be focused on key factors that deliver a leap in value while eliminating others; and it must have a compelling, honest tagline that reflects what your offering provides.
The canvas-drawing process often reveals uncomfortable truths. In the case of School Foods, a commercial food-service company with stalled growth, the team discovered their strategic profile mirrored their two dominant rivals, competing primarily on contract-related factors like financial accountability and transparency. Despite priding themselves on their sense of mission, they realized customers were unaware of this. More troublingly, they had neglected to differentiate on their core product - food - and weren't focused on their real end users (students).
Capítulo 3
Step Three: Imagine Where You Could Be
This step introduces two powerful tools: the buyer utility map and the three tiers of noncustomers framework.
The buyer utility map helps teams see the significant problems worth solving in their industry. It has two dimensions: six stages of the buyer experience cycle (purchase, delivery, use, supplements, maintenance, and disposal) along the horizontal axis, and six utility levers (customer productivity, simplicity, convenience, risk reduction, fun and image, and environmental friendliness) along the vertical axis, creating 36 potential "utility spaces." Most industries focus on just a few of these spaces, leaving the rest wide open for blue ocean opportunities.
When teams struggle to identify buyer pain points, they need to experience their offering as ordinary customers do. A pharmacy chain executive team did exactly this by simulating a sick day scenario, following a "patient" through the entire experience from calling a doctor to filling a prescription. This firsthand experience revealed countless pain points and prompted an epiphany: "Who wants to spend their day doing that? It's so much easier being sick."
The three tiers of noncustomers framework helps systematically identify potential new demand:
1. First-tier noncustomers are soon-to-be noncustomers who use your industry's offerings minimally because they have to, not because they want to.
2. Second-tier noncustomers have consciously rejected your industry's offerings either because another industry better meets their needs or because yours is beyond their means.
3. Third-tier noncustomers have never been targeted because their needs were assumed to belong to other industries.
Total demand potential equals existing customers plus all three tiers of noncustomers - a formula increasingly critical for organizational growth.
Capítulo 4
Step Four: Find How You Get There
This step introduces two powerful frameworks: the six paths framework and the four actions framework.
The six paths framework provides systematic ways to shift perspective and uncover blue ocean opportunities:
1. Look across alternative industries rather than focusing only on rivals within your own industry.
2. Look across strategic groups within your industry to understand what factors determine buyers' decisions to trade up or down between strategic groups.
3. Look across the chain of buyers (users, purchasers, and influencers) to uncover hidden sources of utility.
4. Look across complementary product and service offerings to eliminate pain points across the entire experience.
5. Rethink the functional-emotional orientation of your industry by shifting from one orientation to another.
6. Participate in shaping external trends over time by focusing on how trends will change what customers value.
The four actions framework helps challenge industry logic and business models to create blue ocean moves that break the differentiation/low cost trade-off. It poses four key questions:
1. Which factors should be eliminated (those no longer valuable but rarely questioned due to industry tradition)?
2. Which factors should be reduced below industry standard (where companies over-serve customers)?
3. Which factors should be raised above industry standard (addressing compromises buyers are forced to make)?
4. Which factors should be created (offering entirely new kinds of value)?
The first two questions lower costs, while the second two increase buyer value.
The final step in creating a blue ocean strategy culminates in the blue ocean fair - a dynamic marketplace of ideas where senior leadership, initiative teams, and carefully selected customers and noncustomers converge. This innovative format transforms traditional presentations into engaging five-minute pitches, where each team showcases their strategic option through visual aids, prototypes, and compelling narratives. The fair's interactive nature allows attendees to vote, provide immediate feedback, and engage in focused discussions about each proposal's potential impact and feasibility.
During the fair, teams must address three critical elements: the strategic profile that sets their offering apart, the price point that ensures mass buyer attraction, and the cost structure that enables profitable growth. Attendees use structured evaluation forms to assess each option's potential for creating new market space and sustainable competitive advantage. This systematic feedback helps the executive team make an informed final decision about which blue ocean option to pursue.
The transition from concept to market requires careful testing and validation. Rather than full-scale launches, successful organizations implement rapid market testing through controlled rollouts in specific geographic areas or customer segments. This approach allows teams to gather real-world data about buyer responses, pricing effectiveness, and operational challenges. For example, a company might test their new offering in select retail locations before expanding nationally, or pilot their service with a specific customer segment to refine the value proposition.
The "start small, then go fast and wide" rollout strategy has proven particularly effective. Starting small allows organizations to:
• Fine-tune the offering based on actual market response
• Build operational capabilities gradually
• Manage financial exposure
• Maintain flexibility to adjust course
• Build credibility through documented success
The final phase involves creating a comprehensive business model that integrates all elements of the strategy. This model details how the value innovation drives buyer utility while the cost structure enables profitability at the strategic price point. The visual representation typically includes:
• Key value drivers and differentiators
• Revenue streams and pricing mechanisms
• Cost structure and efficiency initiatives
• Required organizational capabilities
• Critical partnerships and resources
• Implementation milestones and metrics
This detailed business model serves as both a strategic compass and an operational roadmap, ensuring all stakeholders understand their role in bringing the blue ocean strategy to life. Regular reviews and updates of this model help teams stay aligned and responsive to market dynamics while maintaining focus on the core value innovation.
The blue ocean shift process has been successfully applied across diverse contexts - from multinational corporations to small businesses, from nonprofits to national governments.
CitizenM Hotels created a blue ocean move by analyzing what truly mattered to frequent travelers. They eliminated unnecessary factors like front desks, concierges, bellhops, and doormen that added little value to tech-savvy travelers while significantly lowering costs. They reduced room sizes, recognizing travelers rarely stayed in rooms long. Instead, they raised the quality of sleeping environments with king-size beds, fine linens, sound insulation, and great showers. They created self check-in kiosks, replaced front desk staff with friendly "ambassadors," and transformed traditional lobbies into 24/7 communal living spaces. This strategy delivered "affordable luxury" with 40% lower costs per room than four-star hotels, 50% lower staff costs, and twice the profitability per square meter.
Kimberly-Clark Brazil addressed the highly commoditized toilet paper market by creating "Just One Hug" - compressed toilet paper that expanded when hugged. This innovation addressed previously overlooked pain points of difficult transport and storage while maintaining the same amount of paper. The product earned sustainability recognition from Walmart and became the industry standard across KCB's brands.
Perhaps most impressively, Malaysia has initiated over 100 blue ocean moves involving more than 90 ministries and agencies across finance, education, defense, housing, agriculture and more. Their first initiative addressed rampant street crime by redeploying over 7,400 police officers from administrative tasks to street patrols while 4,000 civil servants took over desk duties. This saved hundreds of millions of dollars while reducing street crime by 35% in the first year. Since beginning this National Transformation Journey, Malaysia's gross national income has grown by nearly 50%, creating over 2 million jobs.
The blue ocean shift process offers a systematic path to creating new market space where competition becomes irrelevant. By combining humanness (building confidence) with creative competence (providing tools and frameworks), it enables organizations to break free from red oceans of competition and create blue oceans of new opportunity.
This approach is increasingly vital in today's business environment, where many industries face tighter profit margins, rising costs, declining sales, and market share battles. Environmental projections suggest we'll need two Earths by the 2030s to generate sufficient resources at current consumption rates. We're all paying for the red oceans around us, and to turn things around, we need blue ocean shifts that unlock new value-cost frontiers and profitable growth horizons.
The journey from red to blue oceans isn't about being more creative or entrepreneurial than others. It's about following a systematic process that builds confidence while providing the tools needed to see beyond industry boundaries. As Nelson Mandela noted, "It always seems impossible until it's done." With the blue ocean shift process, creating new market space becomes not only possible but achievable for organizations of all types and sizes.
At its core, the blue ocean shift process is about changing perspective - seeing the same reality differently to discover opportunities that were always there but blocked from view. Like walking up a familiar one-way street in reverse direction and noticing previously unseen details, the process helps people question what everyone else takes for granted and perceive the fallacies behind long-held assumptions and artificial boundaries.
This shift in perspective is transformative not just for organizations but for the individuals involved. Team members often emerge from the process with remarks like "I never knew I was that creative" or "I can do it!" This watershed moment transforms organizational culture as team members share their experiences, building confidence in their own creative abilities and in the process itself.
The blue ocean shift process isn't just a strategy tool - it's a way of seeing the world differently. And in that difference lies the opportunity to create new markets, new growth, and new possibilities that benefit not just organizations but society as a whole.
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