Blue Ocean Strategy and the Role of First-Mover Advantage in Organizational Structure

Blue Ocean Strategy and the Role of First-Mover Advantage in Organizational Structure

Good point about Tesla’s first mover advantage. While Porter (2008)  limit discussion of strategy to low cost versus differentiation, Tesla’s strategy can be described blue ocean strategy.  The term ‘blue ocean’ strategy is brought  by Kim and Mauborgne (2004) and which the authors distinguish it by using the metaphor of  finding new land rather than fighting over existing land. This,then, involves attracting new potential customers  by offering them a value that is often brought from alternative industries.

Kim and Mauborgne ( 2004) also stressed that equally important to the creation of blue ocean strategy is the ability to exploit and protect blue oceans against competitors’ take -over.Thus, in their view, organisations that understand what it takes to make a good strategic move are well-placed to create multiple blue oceans overtime (Kim and Mauborgne, 2004) . It is thus a non-stop strategy mind-set.  One  real life example that failed , according to the authors, is a famous UK cosmetics shop; The Body Shop. The Body Shop invented a whole new market space for ‘natural beauty products’ in an industry that has historically competed on ‘glamour’, but  the shop later on struggled to to keep the brilliance of its strategic move. In their interpretation, Kim and Mauborgne (2005), the Body Shop didn’t realise what made their original move a brilliant one. Once a blue ocean is created, a company should try and distance itself from potential imitators as long as possible i.e. swimming as far as possible in the blue ocean and once its blue ocean turns red with high rivalry, then it is time to break away from competition and reach out to create a new blue ocean (Kim and Mauborgne, 2005). As the cognitive barrier can be an effective barrier to continue with a blue ocean strategy and when the company has earned a brand buzz from its initial move.

On the other side of the argument, creating a new market doesn’t necessarily end up dominating it  (Buisson and Silberzahn, 2010). There are cases where the Fast-Second dominate the market and not the First- Mover . For instance, Google , today’s leading internet search engine , was in reality a late entrant (Buisson andSilberzahn, 2010).

Colleague, How  First-mover or Fast-second strategy links to organisation structure?- Remember strategy is looked as one the organisations contingencies that managers should consider when designing the structure of their organisations.

References

Buisson, B. and Silberzahn, P., (2010). Blue ocean or fast-second innovation? A Four-breakthrough model to explain successful market domination. International Journal of Innovation Management, 14(03), 359-378.

Chan Kim, W. and Mauborgne, R. (2004). Blue Ocean Strategy. Harvard Business Review, 82 (10), 76-84.

Chan Kim, W. and Mauborgne, R.( 2005). Value innovation: a leap into the blue ocean. Journal of business strategy, 26(4), 22-28.