A Blue Ocean Strategy

When a company’s value curve, or its competitors’, meets the three criteria that define a good blue ocean strategy — focus, divergence, and a compelling tag line that speaks to the market — the company is on the right track. These three criteria serve as an initial litmus test of the commercial viability of blue ocean ideas.

On the other hand, when a company’s value curve lacks focus, its cost structure will tend to be high and its business model complex in implementation and execution. When it lacks divergence, a company’s strategy is a me-too, with no reason to stand apart in the marketplace. When it lacks a compelling tagline that speaks to buyers, it is likely to be internally driven or a classic example of innovation for innovation’s sake with no great commercial potential and no natural take-off capability.

W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy