Beyond the core blue ocean strategy

Lately I’ve been reading Chris Zook’s Beyond the Core which describes how an organization can continue to grow after its core business has plateaued by finding adjacent oportunities that both leverage and reinforce its core strengths.  Zook recommends a series of small, harmonious adjacent moves to maximize long-term growth.   To quote Dilbert, organizations should “enhance [their] strategy into the next adjacency”:

 Adjacency strategy

Instead of trying to enhance adjacencies, Kim and Mauborgne’s Blue Ocean Strategy advocates moving from profit pools in core markets to new blue oceans — uncontested markets in which competition is irrelevant. By contrast, red oceans represent bloody fights over market share in both core and adjacent markets, turning products into commodities.   Those who don’t re-assess their strategy are destined to become little more than fish food:

Change Strategy

Both ideas are intriguing (and presumably sold lots of books) but neither are appropriate to every organization.  Simplisticly, larger multinationals may want to think more about growing from their core while smaller organizations and divisions of multinationals might be better advised to jump into another ocean. 

Regardless, performance management enthusiasts know that most organizations don’t fail due to poor strategy.  Instead they fail because what they do doesn’t match what they say they will do.  Their execution isn’t aligned with their strategy.

So, what do you think?  Is Zook rotten to the core or are Kim and Mauborgne all wet?

5 Responses to Beyond the core blue ocean strategy

  1. Robert E says:

    It’s no secret how Toyota runs its business, or how Southwest makes money in the volatile airline industry. Why do these companies whip their competition so bad, when what they do is such an open book? Strategy and execution are difficult to do really well. Books are easy.

  2. Jonathan says:

    Writing a book may be easy but writing a good book is hard. But I agree with what you mean…

  3. jaiz says:

    There are oceans of strategy . Infact today the word strategy is so much misused by managment books as a marketing buzzword that its getting really difficult for a practitioner to really understand and execute strategy. I get reminded of the four eggs story. Here it is , there were four eggs on a wall. The first one fell down , but didn’t break . The Second one fell down, it also didn’t break. The third one fell , that too didn’t break. The fourth one fell , but it was shattered. Well , the first one is “luck” , second one is “experience”, third one is ” cofidence” and the fourth is “over-confidence”. So my point is , whether blue or green or red ocean , what matters is the difference between the third and the fourth egg.

  4. Jonathan says:

    Jai: Strategy in indeed an over-used word and from my experience most people can’t differentiate strategy from tactics. Here’s hoping we never suffer from being the fourth egg.

  5. […] Reexamine Your Strategy and Business ModelI struggled with this chapter as it used lots of examples but provided little insight into how to change a business model. Should companies expand from their core or chase a blue ocean strategy? […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: