Blue Ocean Strategy

We had a very good class today in Strategy. It's sad to say, but it may be the only class I've really enjoyed this year at INSEAD. The core courses that we are required to take in P1 & P2 are so essential to anyone who will carry the MBA title but so mundane for anyone with a business background. On the other hand, I am so pumped for the electives I'll take in the last 3/5ths of the year & I'm sure they will more than make up for the lack of excitement felt until now.

To be fair, Strategy has been a winner all P2 long, but today I actually felt disappointment that the 90 min class had to come to an end. The professor, Peter Zemsky, is a really favorite among the class. He fits my stereotypical image of strategy professor. Very quirky, bouncing off the walls with energy, he is very much like a professor version of Jim Carrey.

The topic of the day was Blue Ocean Strategy, a concept made famous by 2 INSEAD professors. According to Zemsky, it is one of the biggest developments in the Strategy field in the last decade and definitely the most important idea to come out if INSEAD in that time. We started the class with a look at a very clear case of successful use of Blue Ocean Strategy; that is Nintendo with their development of the Wii. It looks like this, if Nintendo would have done the traditional move and developed a product based on graphics and power like Sony & Microsoft, all 3 firms would be fighting it out in the same ocean that would be turned red from the bloodbath. Instead, by leaving those two firms to fight it out for the traditional customer set, Nintendo developed a system that went after an uncontested market and thus was able to enjoy its own blue ocean.

We went on to a very fun discussion of the circus industry and how Cirque du Soleil's model is another successful example of Blue Ocean Strategy. By developing this concept which is something of a cross between a traditional circus and a Broadway show, founder Guy Laliberte has created $1.5B of wealth for himself....not bad!!!

We have been learning some frameworks to assist with the thought process behind coming up with these types of strategies, such as the Non-Customer Opportunity and Value Curves. It is really cool seeing how such simple tools can add structure to strategic thought development. Who knows, maybe they will help me come up with the next Cirque du Soleil or Yellow Tail wine.