Dialogue between China and the author of the strategic book Blue Ocean Strategy

Twenty years ago, when W Qian King first met Renee Moboni in the classroom, one was a Korean teacher and the other was an American student.

In February this year, when the book Blue Ocean Strategy, which embodies the essence of their strategic thinking, was published by Harvard Business School Press, it had been translated into 27 languages in less than half a year, breaking the record of Harvard Business School Press selling international copyrights in history and winning the title of "global bestseller" in the Wall Street Journal. The two authors have also been guests of presidents of Samsung, LG, Toyota, Nissan, Sony and other companies for some time, and will soon be the keynote speakers at Microsoft Summit and Fortune Forum. Their theory is considered to challenge Mike Porter's classic competition theory.

On September 8th, at the Shanghai station of the global lecture tour of Blue Ocean Strategy jointly sponsored by CBN, Commercial Press and Tianyi Books, these two superstars in today's academic circles seem to have returned to what they were 20 years ago. On the podium, Renee Mauborgne played the role of a student and asked W Qian King one question after another about the blue ocean strategy. "The question I asked was the most difficult and thorny one I heard during my lecture tour around the world." Renee Mauborgne said before asking questions. Just between such a question and answer, the ideological essence of the blue ocean strategy has also been richly interpreted.

Blue Ocean Strategy and Red Sea Strategy

Renee Mauborgne: Can you give me a simple definition of the Red Sea and the Blue Ocean?

Qian Jin: In fact, everyone knows the Red Sea strategy very well. This is what we usually call competitive strategy. What is industrial governance in competitive strategy? What happened? Joan? Hinge Institute stole the whole system and killed the hinge edge of chrysanthemum, but it was too late to forgive coal: Is it a curse? Stealing? What's the matter with you? ┖ Don't play? Why don't you take a picture? What is the fate of harmony? D ??????????????? What happened to Xinkang?

If the Red Sea strategy is based on industrial organization economics, then the theoretical cornerstone of the Blue Ocean strategy is based on the new economic theory, that is, endogenous growth theory. The blue ocean strategy is not limited to the existing industrial boundaries, but to break such boundary conditions. Sometimes the blue ocean is opened up in a brand-new market world, but many times it can be opened up in the Red Sea. For example, Starbucks coffee, which used to be low-cost and competitive in price, has now commercialized coffee. As soon as Starbucks appeared, it knocked out all its competitors and opened up a blue ocean in the original Red Sea, almost reaching the height of monopoly.

Renee Mauborgne: What's the difference between the Blue Ocean strategy and the Red Sea strategy in terms of starting and maintaining profit growth?

W. Qian Jin: Our 20-year research results show that in the process of new business development, 86% is invested in the Red Sea business, 14% is the blue ocean business, and the blue ocean business finally accounts for 6 1% of the profits, while the red sea has only 39% of the profits. This result is composed of random sampling, not statistics after specific selection.

Renee Mobney: That's strange. Since wealth is concentrated in the blue ocean, why are so many enterprises crowded in the Red Sea, and their main business is the Red Sea?

W. Qian Jin: Actually, we have noticed this. At the World Economic Forum, Fortune Annual Meeting or Microsoft Summit, the bosses of all enterprises unanimously said that it was important to create a blue ocean, but when they went back to really invest in the project, when they wanted to write a check, they held back and continued in the Red Sea. What is the reason? 86% are still in the Red Sea, because we have many analytical tools and theories to start businesses in the Red Sea. We only need to analyze the current situation and structure of the industry, compare with competitors, and compare the price and quality content. Where are our advantages over our competitors? We can formulate our strategy. But the blue ocean is an adventure. Although innovation is good, no one wants to take risks. In business school, we also say that failure is the mother of success, but no one wants to be a loser, which is why many people are committed to the Red Sea.

Random innovation and institutional innovation

Renee Mauborgne: I just wanted to ask you, innovation is so important. What is the difference between the traditional innovation concept and the new blue ocean strategic innovation concept?

Qian Jin: This difference is mainly the difference between two innovative schools: one is random innovation, and the other is systematic innovation. Random innovation emphasizes entrepreneurship, dares to try and make mistakes, and crosses the river by feeling the stones. They encourage entrepreneurs not to be afraid of failure, because failure is the mother of success, and innovation comes from the culture of the enterprise and can be deeply passed down within the enterprise. In addition, innovation is also done as an experiment, which is undertaken by a part separated from an enterprise, rather than the whole enterprise developing in the direction of innovation. In the competitive strategy, innovation is also very consistent with the random innovation mechanism.

We believe that innovation can be systematically sought. Innovation can have a certain paradigm, a certain way of thinking, a certain theoretical framework, a certain methodological guidance, and a certain analytical framework to minimize risks. This is what we call the value innovation school. In reality, random innovation and systematic innovation may coexist, and innovation is not necessarily systematic, but also random, which is why we say that the Red Sea is reasonable, because not everything is systematically created by the Blue Ocean.

Renee Mauborgne: You just said a lot about the market. Why is the theory you are talking about called blue ocean strategy instead of blue ocean marketing strategy? What's the difference between blue ocean strategy and blue ocean marketing strategy?

Qian Jin: It seems very important to define what the blue ocean strategy is. In my opinion, the blue ocean strategy includes three aspects: on the one hand, the value proposition to the buyer, on the other hand, the profit proposition to the enterprise, and on the other hand, the personnel proposition to the organization.

Value proposition means that buyers must be very excited and happy about what you offer them, which is the advantage of marketing. But it is not enough to make the buyer happy that the company is bankrupt at a loss, so your enterprise must also be profitable, just as a national government cannot provide benefits to its citizens without paying taxes. On the other hand, if your enterprise makes profits by exploiting, enslaving and squeezing employees, your enterprise is also unsustainable. The strategy is to satisfy these three aspects, so the value proposition is equal to the utility minus the value, the profit proposition is equal to the price minus the cost, and the personnel proposition is to satisfy all stakeholders of the enterprise. Therefore, coordination as a whole system is strategy, and strategy represents an overall coordination system composed of the buyer's value proposition, the enterprise's profit proposition and the personnel proposition of the enterprise organization.

System strategy

Renee Mauborgne: How do you formulate the blue ocean strategy and make it a very systematic and executable strategy?

W. Qian Jin: The personal computer was invented by Mitzi, but none of us can remember him because he failed later. The Walkman was invented by Sony, which is well known because it makes money from it. What a sad thing it is to invent something yourself, make no money, or even go bankrupt. Nobody remembers you. If you only remember to innovate in technology, there is an 80% chance that you will finally lay this egg, be hatched by others, and others will profit. The blue ocean strategy is not what to create first, but how to make profits and how to make money. We should not be obsessed with who invented it first, but should see who finally made a profit.

Existing large enterprises can also create a blue ocean. We know that they all use the wrong analysis unit in business analysis, that is, companies and enterprises use industry as the analysis unit. We know that enterprises actually have ups and downs, and so does the industry. Then the industry is not clearly defined, divided into attractive industries or unattractive industries. If you have a good strategy, you can turn around Gankun even in a declining enterprise, and you will still fail if you don't do well in a good enterprise.

Renee Mauborgne: What is the relationship between the theoretical parts of the Blue Ocean Strategy? How to effectively implement the blue ocean strategy?

Qian Jin: The blue ocean strategy has all parts of the body just like people. Leadership and decision-making are also its brains, and the trunk is the core of value innovation. How can limbs mobilize all your employees at all levels to work hard for the company to implement such a lofty strategy in the future? Just like a complete person, it is impossible to lack arms, legs and heads. Everything must be integrated to form the whole blue ocean strategy.

The blue ocean strategy is not an isolated individual strategy, but an overall strategy. Your company and your business are more than just products. You have to introduce your products and their processes and techniques, such as how to design, manufacture, market and distribute such products. There may be cost problems, brand problems and process problems in this process. What you need to know is where is the crux of the problem? The key is to know the real crux. For example, if there is a problem with your process, don't blame the product. If there is a problem with the product, don't just blame the process.

Wonderful answer on the spot

Q: What's the difference between blue ocean strategy and market segmentation?

A: Market segmentation is to segment the existing market without creating new market demand. But the blue ocean strategy is to create new market demand by breaking the boundaries between the existing market and similar markets.

Q: If everyone enters the blue ocean, won't the blue ocean become the red sea again?

A: As more and more competitors enter the Blue Ocean, the Blue Ocean will gradually become a purple sea between the Blue Ocean and the Red Sea, which requires enterprises to constantly innovate and discover new blue oceans.

Q: Is it possible for enterprises to move from one blue ocean to another through innovation?

A: We found that many enterprises moved from the Red Sea to the Blue Ocean, and few directly moved from the Blue Ocean to the Blue Ocean. Of course, we are also studying hard, hoping to help enterprises move directly from the blue ocean to the blue ocean.

Q: Is it possible for a company to try its best to find the blue ocean and leave the Red Sea?

A: There will be such a situation. But even if you can't find the blue ocean, you may find a certain color of "sea", which is less competitive than the current Red Sea.

Q: Income is always associated with risk. The blue ocean has high income, but the risk of creating it may also be high. Although the red sea has low returns, the risks there are also low. How to treat this balance?

A: This is the way people look at innovation. Innovation is high risk and high return, and the Red Sea is low risk and low return, but the tools mentioned in the Blue Ocean strategy can greatly reduce risks.