Deep Thinkers: The Blue Ocean Strategy

Deep Thinkers: The Blue Ocean Strategy

Professors W Chan Kim and Renée Mauborgne explain how their 'blue ocean' strategy can help businesses out-perform the competition by exploiting less troubled commercial waters.

In the space of just two years, a red wine produced by the Casella Wines Australian winery emerged as the fastest-growing brand in the histories of both the Australian and US wine industries. The wine – called Yellow Tail – quickly became the number one imported wine into the USA, surpassing the wines of France and Italy.

What's more, whereas large wine companies developed strong brands over decades of marketing investment, Yellow Tail leap-frogged its competitors without a promotional campaign, mass media or consumer advertising. It didn't just steal sales from competitors; it grew the overall market. Yellow Tail brought non-wine drinkers – beer and ready-to-drink cocktail drinkers – into the market. Moreover, novice table wine drinkers started to drink wine more frequently, jug wine drinkers moved up and drinkers of more expensive wines moved down to become consumers of Yellow Tail.