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rinciples of Blue Ocean StrategyThe six main principles guide companies through the formulation and execution of blue ocean

strategy in a systematic, risk-minimizing manner.

The first four principles address blue ocean strategy formulation:

. !econstruct market boundaries. This principle identifies the paths by "hich managers can

systematically create uncontested market space across di#erse industry domains, hence

attenuating search risk. $sing a Six %aths frame"ork, it teaches companies ho" to make the

competition irrele#ant by looking across the six con#entional boundaries of competition to open

up commercially important blue oceans.

&. 'ocus on the big picture, not the numbers. This principle, "hich addresses planning risk,

presents an alternati#e to the existing strategic planning process, "hich is often criticized as a

number-crunching exercise that keeps companies locked into making incremental

impro#ements. $sing a #isualizing approach that dri#es managers to focus on the big picture,

this principle proposes a four-step planning process for strategies that create and capture blue

ocean opportunities.

(. !each beyond existing demand. To create the greatest market of ne" demand, managers

must challenge the con#entional practice of aiming for finer segmentation to better meet existing

customer preferences, "hich often results increasingly small target markets. )nstead, this

principle, "hich addresses scale risk, states the importance of aggregating demand, not by

focusing on the differences that separate customers but rather by building on the po"erful

commonalities across noncustomers.

*. +et the strategic seuence right. The fourth principle describes a seuence that companies

should follo" to ensure that the business model they build "ill be able to produce and maintain

profitable gro"th. hen companies follo" the seuence of / utility, &/ price, (/ cost, and */

adoption reuirements, they address the business model risk.

The remaining t"o principles address the execution risks of blue ocean strategy.

0. O#ercome key organizational hurdles. Tipping point leadership sho"s managers ho" to

mobilize an organization to o#ercome the key organizational hurdles that block the

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implementation of a blue ocean strategy. This principle mitigates organizational risk, outlining

ho" leaders and managers can surmount the cogniti#e, resource, moti#ational, and political

hurdles in spite of limited time and resources.

1. Build execution into strategy. This principle introduces fair process to address the

management risk associated "ith people2s attitudes and beha#iors. Because a blue ocean

strategy represents a departure from the status uo, fair process is reuired to facilitate both

strategy making and execution by mobilizing people for the #oluntary cooperation needed for

execution. By integrating execution into strategy formulation, people are moti#ated to act.