Reading 8.4: Kim and Mauborgne

Judge whether the following statements are true or false:

I Kim and Mauborgne (‘Blue ocean strategy’, 2005, in De Wit & Meyer, 2010, Reading 8.4) define ‘blue oceans’ as representing all the industries in existence today, where industry boundaries are defined and accepted, and the competitive rules of the game are well understood. The blue ocean assumption is based on the ‘structuralist view’
II Kim and Mauborgne (‘Blue ocean strategy’, 2005, in De Wit & Meyer, 2010, Reading 8.4) define ‘blue oceans’ as denoting all the industries not in existence today, untainted by competition, where demand is created rather than fought over. The blue ocean assumption is based on the ‘reconstructionist view’.
1. Both statements are true
2. Statement I is true and statement II is false
3. Statement I is false and statement II is true
4. Both are false.
W. Chan Kim and René Mauborgne (‘Blue ocean strategy’, 2005, in De Wit & Meyer, 2010, Reading 8.4) explain the reasons for a “dramatic imbalance in favor of red oceans”: corporate strategy is all about red ocean competition. Which of the following statements is part of the authors’ explanation?
1. Companies focus more on red oceans, because they prefer to do business where there is no competitor
2. Companies focus more on red oceans, because it means accepting the key constraining factors of the need to beat an enemy, to succeed
3. Companies focus more on red oceans, because it is about creating new market space
4. Companies focus more on red oceans, because blue oceans cannot be exploited or protected.
Following the article by Kim and Mauborgne (‘Blue ocean strategy’, 2005, in De Wit & Meyer, 2010, Reading 8.4), which statement is NOT related to the characteristics of a ‘blue ocean’?
1. Creating blue oceans builds brand equity
2. Blue ocean strategy makes the competition irrelevant
3. Blue oceans exploit existing demand
4. Blue oceans strategy creates economic and cognitive barriers to imitation.
Following the article by Kim and Mauborgne (‘Blue ocean strategy’, 2005, in De Wit & Meyer, 2010, Reading 8.4), which statement IS related to the characteristics of a ‘red ocean’?
1. Creating red oceans builds brand equity
2. Red ocean strategy creates uncontested market space
3. Red oceans create and capture new demand
4. Red oceans exploit existing demand.
According to their article ‘Blue ocean strategy’ (2005, in De Wit & Meyer, 2010, Reading 8.4), with which of the following statements would Kim and Mauborgne disagree?
1. Blue oceans are very much the result of technological innovation
2. Blue oceans are mostly driven by value pioneering
3. Incumbent companies often create blue oceans
4. New entrants seldom create blue oceans.