Blue Ocean Strategy's Fatal Flaw

Blue Ocean Strategy's Fatal Flaw by Wayne E. Pollard, CMO Magazine

In their bestseller, Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne set out their framework and tools for creating “blue oceans,” or new market space. Author and consultant Wayne Pollard takes them to task for neglecting the critical contribution of marketing to blue ocean strategy. Pollard doesn’t mince words. He asserts that marketing is the key factor that determines the success of any blue ocean strategy, and without executing an effective marketing strategy there can be no successful blue ocean strategy. Pollard sounds distinctly vexed that Kim and Mauborgne devote only one paragraph out of 240 pages to the importance of marketing. Readers may find his tone a little shrill, yet he does make points worth bearing in mind.

Among the few comments made in Blue Ocean Strategy about marketing and branding are the following: “When a company offers a leap in value, it rapidly earns brand buzz and a loyal following in the marketplace.” Blue oceans are defined by “untapped market space, demand creation, and the opportunity for highly profitable growth.” Pollard points out that value doesn’t matter unless it is value that exists in the mind of the market, and perceived value results from effective marketing. Unless people are aware of the “value innovation,” it will have no value. Furthermore, if demand creation is one of the three defining features of blue oceans, Kim and Mauborgne should have gone into some detail how to create demand through marketing.

Pollard sees only two reasons for the authors’ neglect of marketing’s role in blue ocean strategy execution. They may take effective marketing as a given. Or they may believe that marketing is unimportant as part of execution—that customers will come automatically, drawn by “value innovation” and “unprecedented value”. Pollard goes on to critique both beliefs, referring to some powerful brands of today and showing that they didn’t take off until powerful marketing got behind them. Pollard includes with the domain of marketing such things as the choice of whether or not to franchise. By taking for granted key marketing decisions like this, Kim and Mauborgne are missing a crucial part of the blue ocean picture.

Pollard insists that you “cannot separate the marketer from the blue ocean strategy.” Value does not build brands on its own; it relies on marketing. Strategists need to remember that it is the market that determines who wins and loses, not the strategists. Any discussion of creating “uncontested market space” must acknowledge that market space is only contested or uncontested in people’s minds, and so detailed consideration must be given to how to reach the mind of the market. These points are all valid, but the reader might suspect that Kim and Mauborgne were simply practicing the division of labor by leaving the marketing side of blue ocean strategy to others.