final draft-blue ocean strategy project

Academic supervisor: Ranganai. J (Mr.)

By

Moyo Tendai (P0114310F)

An investigation into the sustainability of Blue Ocean Strategy as a business-level strategy in Zimbabwe April 24, 2015

National University of Science and Technology |Bachelor of commerce Honors Degree in Management 2

TABLE OF CONTENTS

Project Title Form 11

Declaration of Originality 12

Copyright Declaration 13

Project Release Form 14

Grand Theme 15

Dedication 16

Acknowledgements 17

Abstract 18

Definition of key Terms and acronyms 20

CHAPTER 1: GENERAL INTRODUCTION 21

1.0 Introduction 21

1.1 Background to the study 21

1.2 Statement of the problem 23

1.3 Objectives of the study 24

1.3.1 Research questions 25

1.3.2 Statement of Hypotheses 25

1.4 Significance of the study 26

1.4.1 Theoretical significance 26

1.4.2 Significance to the researcher 26

1.4.3 Significance to Zimbabwean Companies 27

1.5 Assumptions of the study 27

1.6 Delimitation 28

1.7 Limitations 29

1.8 Project structure 30



1.9 Chapter conclusion 31

CHAPTER 2: LITERATURE REVIEW 32

2.0 Introduction 31

2.1 Strategy 31

2.2 The origin of strategy 36

2.3 Strategy anatomy 36

2.3.1 Corporate level strategy 38

2.3.2 Business level strategy 39

2.4 The outside – in perspective 39

2.5 The inside-out perspective 50

2.5.1.0 Total Quality and Customer Value Strategy 51

25.1.1 Best net value 51

2.5.2 Blue Ocean strategy 53

2.5.2.1 Creation of blue oceans 53

2.5.2.2 New market space 55

2.5.2.3 The impact of creating blue oceans 56

2.5.2.4 The rising imperative for creating blue oceans 56

2.5.2.5 The heart of Blue Ocean Strategy: value innovation 57

2.5.2.6 Red Ocean versus Blue Ocean Strategy 59

2.6 Formulating and executing Blue Ocean Strategy 61

2.6.1 The six principles of Blue Ocean Strategy 62

2.6.2 Analytical tools and frameworks 62

2.6.2.1 The strategy canvas 63

2.6.2.2 The four actions framework 64

2.6.2.3 The Eliminate-Reduce-Raise-Create Grid 66



2.7 Formulating Blue Ocean Strategy 67

2.7.1 Reconstruction of market boundaries 67

2.7.1.1 The six-path framework 68

2.7.2 Focusing on the big picture, not numbers 70

2.7.2.1 Visualizing strategy 70

2.7.2.2 The Pioneer-Settler-Migrator Map 72

2.7.3 Reach beyond existing demand 74

2.7.4 Getting the strategic sequence right 76

2.7.4.1 The Price Corridor of the Mass 81

2.8 Executing Blue Ocean Strategy 83

2.8.1 Overcoming key organizational hurdles to strategy execution 83

2.8.1.1 The Cognitive hurdle 84

2.8.1.2 The Resource hurdle 84

2.8.1.3 The Motivational 85

2.8.1.3 The Political hurdles 87

2.8.2 Challenging conventional wisdom 87

2.8.2.1 The Four Pillars of Blue Ocean Leadership 89

2.8.3 Build execution into strategy 90

2.9 The sustainability and renewal of Blue Ocean Strategy 92

2.9.1 Barriers to imitation 92

2.9.2 When to Value-innovate again 92


CHAPTER 3: RESEARCH METHODOLOGY 94

3.0 Introduction 94

3.1 Research philosophy 94



3.1.1 Research approach 95

3.1.2 Research paradigm 95

3.2 Research design 96

3.2.1 Research strategy 97

3.3 Data sources 98

3.3.1 Secondary data 98

3.3.2 Primary data 99

3.4 Data collection techniques 101

3.4.1 Questionnaire 101

3.4.2 Semi-structured interview 102

3.5 Data collection procedure 103

3.5.1 Sample design 103

3.5.2 General and target population 104

3.5.3 Sample frame 104

3.5.4 Sample size determination 104

3.5.5 Sampling methods and techniques 105

3.5.5.1 Quota sampling 105

3.5.5.2 Purposive Sampling 106

3.6 Data Presentation 107

3.7 Data analysis 107

3.7.1 Quantitative analysis 108

3.7.2 Qualitative analysis 108

3.8 Validity and Reliability considerations 108


CHAPTER 4: DATA PRESENTATION AND ANALYSIS 110



4.0 Introduction 110

4.1 Interview Response Rate Analysis 110

4.2 Data Presentation and Analysis 111

4.2.1 Sustainability of Blue Ocean Strategy 111

4.2.2 Marginal Benefits of Blue Ocean Strategy 114

4.2.3 Blue Ocean as a winning strategy 115

4.2.4 Comparison of Red Oceans to Blue Oceans 119

4.2.5 Long-term survival and going concern mechanisms 122

4.3 Chapter Conclusion 130

CHAPTER 5: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction 131

5.1 Recap of Objectives 131

5.2 Summary of Findings 132

5.2.1 Sustainability of the Blue Ocean Strategy framework as a business-level strategy132

5.2.2 Viability of Blue Ocean Strategy as a business-level strategy 133

5.2.3 Marginal benefits of Blue Ocean Strategy relative to the cost of adoption in the

Zimbabwean economic context 135

5.2.4 Comparison of Red Oceans to Blue Oceans 136

5.2.5 Long-term survival and going concern mechanisms for Blue Ocean Strategy 137

5.3 Conclusion 138

5.4 Recommendations 139

5.5 Trail for future Research 140

5.6 Concluding Remarks 140

REFFERENCES 141



APPENDICES 145

Appendix 1 – Questionnaire/Interview Guide 145

Appendix 2 – Formulae used by the researcher 149



LIST OF FIGURES

Figure 2.1 Strategy Anatomy 37

Figure 2.2 Strategy Content 38

Figure 2.3 Business Level Strategy 40

Figure 2.4 Porter‘s Generic Strategies 41

Figure 2.5 Overall Cost Leadership 43

Figure 2.6 Overall Differentiation 46

Figure 2.7 The Value Inequality Model 52

Figure 2.8 Industry Attractiveness Assessment Model 54

Figure 2 .9 The Cornerstone Of Blue Ocean Strategy 58

Figure 2.10 Value Innovation 58

Figure 2.11 Red Ocean versus Blue Ocean Strategy 60

Figure 2.12 The Strategy Canvas 63

Figure 2.13 The Four Actions Framework 64

Figure 2.14 The Eliminate-Reduce-Raise-Create Grid 66

Figure 2.15 The Six-Path Framework 68

Figure 2.16 The Visualization Process 71

Figure 2.17 The Pioneer-Settler-Migrator Map 72

Figure 2.18 The Boston Matrix 73

Figure 2.19 The Three Tiers of Noncustomers 75

Figure 2.20 The Sequence Of Blue Ocean Strategy 78

Figure 2.21 Buyer Experience Cycle/Buyer Utility Map 79

Figure 2.22 The Price Corridor Of The Mass 81



Figure 2.23 the Four Hurdles To Execution 83

Figure 2.24 Conventional Wisdom versus Tipping Point Leadership 88

Figure 2.25 The Fair Process 91

Figure 4.1 Respondents‘ Opinions on the Sustainability of Blue Ocean Strategy 112

Figure 4.2 Viability of Blue Ocean Strategy in Zimbabwe 116

Figure 4.3 Survival of Blue Ocean Strategy in Zimbabwe 119

Figure 4.4 Extent of Difference between Blue Oceans and Red Oceans 120

Figure 4.5 Assertion 1 124





Figure 4.10 Analysis of Respondents‘ Description of Blue Ocean Strategy 129



LIST OF TABLES

Table 2.1 The Four Pillars Of Blue Ocean Leadership 89

Table 4.1 Interview Success Rate Analysis 110

Table 4.2 Sustainability of Blue Ocean Strategy 111

Table 4.3 Assessment of Viability of Blue Ocean Strategy 115

Table 4.4 Survival of Blue Ocean Strategy 118

Table 4.5 Difference between Blue and red ocean companies 120

Table 4.6 Comparison between Blue Oceans and Red Oceans 121

Table 4.7 Myths around Blue Ocean Strategy 123



Project Title Form

Proposed title for the Project

An investigation into the pressures that foster for the adoption of Blue Ocean Strategy

Signature of Student………………………………..

Approved Title of the Project

An investigation into the sustainability of Blue Ocean Strategy as a business level strategy

Signature of Student………………………………..

Signature of Supervisor………………………………

Date of Approval………………………………………



Declaration of Originality

I understand that the National University of Science and Technology and the Graduate School of

Business enforce a code of conduct against plagiarism and copyright infringement. Further to

that, I understand that there are several legal and academic penalties for the breach of that code.

In keeping with the said code of conduct against plagiarism and copyright infringement, I make

the following declarations:

i. That l have read the University‘s code of conduct against plagiarism contained in the

University‘s yearbook

ii. That I have not committed the offence of plagiarism and copyright infringement in my work

iii. That l have not collected or otherwise co-operated with anyone in doing my work here

presented.

iv. That I have not colluded or otherwise co-operated with anyone to help them present my work

as their own.

v. That the work I am presenting is original and that it is free from fabrication, falsification,

collaboration and collusion.

NAME MOYO TENDAI

SIGNATURE …………………………………………

DATE 24TH

OF APRIL 2015



Copyright Declaration

I hereby cede to the National University of Science and Technology library all the intellectual

property rights attaching to this dissertation/work. As the owner of the copyright over this work, the

University may store, publish or otherwise distribute the entire volume of this work or parts thereof

at its discretion will dictate.

I further certify that where applicable all copyright permission and or other authorization to use

privileged information has been obtained and attached hereto. Therefore University should not suffer

any prejudice owing to the contents of this work.

Name ………………MOYO TENDAI…………………………………… ……..

Signature……………………………………………………………………………

Date ………………………………………………………………………………



Project Release Form

I certify that the following student ………MOYO TENDAI………………… Student

Number……………P0114310F………was under my supervision. I further certify that he has

attended all the scheduled meetings with me and that he has fulfilled all the requirements that l set

before him as the Supervisor.

It is my professional judgment that the dissertation is of sufficiently high standard as to be submitted

with my name attached to it as the Supervisor.

I hereby release the student without reservation to submit his dissertation for marking.

Name of Supervisor………MR. RANGANAI J…………………………

Signature …………………………………………………………

Date………………………………………………………………



DEDICATION

This epistle is a direct and emotional product to my late mother for giving me a life to her own

detriment, for seeing a future when I could not see it, and for molding an apt character and a

culture of perseverance in me, a quality that made me stand when standing was not easy. Mum

this has since been your ultimate and utmost wish and dream that I rise above hate; and

actualize the trajectory that you envisioned for my life………….

Your legacy shall outlive the infinite!

May your gentle soul rest in eternal peace…………..



ACKNOWLEDGEMENTS

I greatly owe infinite gratitude and complements to the following distinguished people for

their unwavering comradeship and their unshakable hand of support:

Mr. and Mrs. Moyo – the fulcrums and pillars of the possibility for all my endeavors, you

are the greatest heroes that have ever lived in my world! You cheered the marathon from

day one and even when the almighty retired you from existence, you left behind, your

hope and faith in me, thank you mum and dad.

Gilbert and Never Moyo, had it not been your financial intervention during the last mile

of the journey, the whole apocalypse could have been shuttered en route. You gave me

the reason to believe in family

The whole tale could not have been told had it not been your distinct and determined

effort and love Patie! You have been the fulfiller of my destiny sister, morally,

financially, emotionally and even physically, you invariantly and consistently stood by

me as a beacon of hope

Mr. Ranganai J, my Strategic Management Lecturer as well as the project supervisor,

you would be shocked if you knew how much you have managed to inspire my success at

personal level and how you have served as a benchmark for my professional life

trajectory. Hats off to you!

My family in its wholesomeness and in its extended sense, for running by the sidetracks

throughout the journey and standing by the sidewalk encouraging me to soldier on, Portia

I will not forget! I thank you; God bless you all!

Ambuya Irene thank you for providing a roof over my head! It could never had been

possible without your presence

The government of Zimbabwe for the mainstream financial assistance to all the

unfortunate and underprivileged cases congruent and equivalent to mine. We appreciate

the superordinate consideration and the sense of humor

Over and above all, glory be to the Almighty, for this particular tale would not have been

told, had it not been out of his grace and infinite affinity. When the human world

considered me a parental accident, Jehovah you knew there was a place for me in this

world, and made all sufficient provisions for my existence, thank you father especially

for this day of submission of this product of your ultimate grace!



ABSTRACT

This study focuses on empirically testing the sustainability of Blue Ocean Strategy (BOS) as a

business level strategy with particular focus on the Zimbabwean business circus. The wealth of

literature on strategy generally and Blue Ocean strategy particularly, formed and remained the

skeletal body of reference upon which this study is underpinned. It guided both as a pointer stick

and a yard stick to direct and measure the building blocks of the framework that needed invariant

attention and circumspect vigilance throughout the study. The study‘s blue print is deep-rooted

on a two-fold research design merging exploratory and descripto-explanatory designs. The study

was executed in the form of a survey, in terms of which questionnaires were paralleled by semi-

structured interview, forming the finite set of primary data collection apparatus. Thirteen (13)

platinum member companies of the Confederation of Zimbabwean Industries (CIZ) served as the

sample representing the entire business constituency in the country. For the effective

actualization of research objectives, secondary data was also incorporated into the deduction of

an objectively developed hypothesis. It is reflected in the findings that Blue Ocean Strategy is a

robust, effective and sustainable strategic logic in Zimbabwe. The findings vehemently reinforce

the observable disproportionate marginal benefits inherent in the contemporary strategic

framework, potentially remedial to productive and distributive inefficiency challenging the major

industrial sectors in Zimbabwe. Simultaneous achievement of low cost and unique value (Value

Innovation); high performance corporate leadership (Tipping Point Leadership) and high

performance management process (Fair Process), among other inbuilt strengths of the framework

prove to be critical drivers behind the aforesaid disproportionate marginal benefits. Divergent

and innovative business initiatives (such as CBZ Holdings‘ financial inclusion Public Policy;

unconventional tobacco curing alternatives – BAT) were empirically identified as potential blue

ocean endeavors in the country. This study is focused on one of the newest research area in

strategy, and as such, builds on to the superficial body of knowledge on business-level strategy,

precisely in the country with regard to the yet attention-starved new strategic philosophy, Blue

Ocean Strategy. In that direction, the study recommends other strategists to fine-tune and refine

the strategic framework from all angles in an effort to improve its applicability and sustainability

beyond Kim and Mauborgne (2005)‘s eyeshot horizon as a concise approach to revolutionizing

the business culture in Zimbabwe.



Key words: Blue Ocean, Value Innovation, Fair Process, Tipping Point Leadership



DEFINITION OF KEY TERMS AND ACRONYMS

The epitome of the ‗new strategy dawn‘ (Blue Ocean Strategy), inevitably carries a pool of new

terms at the heart of the framework. It is out of this reason that the researcher attaches

importance to highlighting the definitions and meanings of terms and acronyms that will be

consistently used is order to effectively communicate as follows:

Blue Ocean(s): uncontested market space free of competition, with untapped demand targeted

with new and innovative offerings, which confers the potential for disproportionately high

growth and profits. (Leavy 2005; 2009, Kim and Mauborgne 2005)

BOS framework: Blue Ocean Strategy Framework

Business-level strategy: an integrated and coordinated set of commitments and actions the firm

uses to gain a competitive advantage by exploiting core competencies in specific product

markets (Gallagher; 2004)

Fig: Figure

Red Oceans: markets characterized by intense competition that are analogous to blood stained

shark infested waters (Pita 2009)

Strategy: a fundamental framework through which an organization can assert its vital continuity,

while at the same time purposefully managing its adaptation to the changing environment to gain

competitive advantage (de Wit and Meyer; 1998).

Value Innovation: The Cornerstone of Blue Ocean Strategy whereby instead of focusing on

beating competition, the company focuses on making competition irrelevant by creating a leap in

value for buyers and the company, thereby opening up uncontested market space. (Kim and

Mauborgne 2005)

Sustainability- a measure of the ability of a business to survive in the long term and to have

profits on a going-concern perspective (biztaxlaw.about.com)



CHAPTER 1 GENERAL INTRODUCTION

1.0 INTRODUCTION

The study seeks to assess the sustainability of the Blue Ocean Strategy framework as a business-

level strategy with particular focus on Zimbabwe. This chapter lays the bedrock upon which the

whole study is anchored, by highlighting the background to the study, covering the statement of

the problem, the research objectives and questions, highlighting the assumptions, delimitations,

limitations, definition of key terms and acronyms, the significance of the study, as well as the

project structure and the conclusion.

1.1 BACKGROUND TO THE STUDY

Traced from the ancient military nature of approach to battles for conquest and dominion,

strategy traditionally paralleled increasing military decision-making complexity. To that end,

business-level strategy has ever since been conceptualized along vestiges of competitive

fundamentalism, either based on cost or on quality, where the two were believed (in Porter

(1985)‘s theory) to be mutually exclusive. However, increasing research has raised empirical

evidence that quality and low cost can be achieved simultaneously, with theorists inclusive of

Deming (1986); Juran (1964); Ishikawa (1985) and Crosby (1979) among others, emerging as the

first vanguards to develop a lead in the exodus of simultaneous pursuance of quality and low

cost.

Hats-off to the alluded ‗quality at low cost‘ proponents! They laid a solid foundation upon which

modern, so-called hybrid strategies where developed, with examples inclusive of Total Quality

and Customer Value Strategy (Crosby: 1979) and Combination Strategy (Lynch: 2009) among

others. Over and above the aforesaid hybrid strategies, a superb, more robust and more elaborate

game-changing strategic framework that has since proved to be a successful break away from the

conventional strategic thinking, by drawing a lead on a new strategic paradigm and a new global

business culture that will epitomize the future of strategy, was propounded by Kim and

Mauborgne (2005) in the name of Blue Ocean Strategy.

Globally, demand for many products is falling synchronous with the falling populations in

developed markets. Industrial productivity has been enhanced by state-of-the-art technology in

almost all industries, fostering supply to exceed demand right across virtually all market



segments. Consequently, profit margins are shrinking, price wars becoming the pervasive culture

in the business arena, and commoditization of products being the resultant effect. In conventional

market environments, market space has become more fierce and crowded as competitors

offensively battle head-on, in cutthroat competition for market share and to outperform each

other (Leavy 2005). To avoid competing aggressively for the share of existing markets,

Mauborgne and Kim (2005) argue that there is need to challenge an industry‘s conventional

wisdom about which buyer group to target leading to the discovery and creation of new

uncontested market space which they called a Blue ocean, potentially highly profitable,

hospitable and accommodative for unrestricted growth, raising the need to empirically

investigate and ascertain the sustainability of the Blue Ocean Strategy framework, as a business-

level strategy, pursuant to mitigating the alluded unique challenges embedded in the new

business era.

In their Noble prize winning book, (Blue Ocean Strategy: How to Create Uncontested Market

Space and Make Competition Irrelevant) and its analytical research articles, Kim and Mauborgne

(2005) depicted existing and saturated markets whose share is battled over, by competing firms,

as analogous of bloody, shark-infested waters, which they called a Red Ocean with growth

restricted to the set boundaries of the market and profits shared averagely by firms that compete

successfully to outperform others. To overcome this challenge, they asserted that there is need to

shift the strategic compass towards incipient, uncontested market space, and unlock value from

untapped demand through value innovation (unique value propositions that create a great leap

in value for customers) as opposed to competing head on with rivals for existing space through

value imitation. These two pioneers and advocates of the radical departure from conventional

ideas on strategy (Kim and Mauborgne; 2005), highlighted that firms can earn commercial

success and make competition irrelevant by creating ―blue oceans‖ of uncontested market space,

with the potential of reaping disproportionately higher profitability and unparalleled growth. It is

the traditional strategic thinking that makes sustainability of this new strategic dimension

questionable, in the light of the trade-off between value and cost that is believed to be inherent in

the strategic choice by ancient strategy theorists, hence, the development of commitment to

empirically investigate the sustainability of the framework by the researcher, with particular

focus on Zimbabwe.



1..2 STATEMENT OF THE PROBLEM

The outstretched benevolence of the Blue Ocean Strategy framework proponents is well

appreciated in the corporate world but, remaining a mystery, is its sustainability in practice.

There is still a vestige of doubt as to whether the strategy lives long enough to define a winning

strategy and hence a new competitive dimension divergent from the concept of competitive

advantage.

Blue chip companies such as Coca – Cola and HP among others, are using the Blue Ocean

Strategy (BOS) Framework as a strategic compass to explore new business initiatives (Wubben

2012), but skepticism has emerged about the Blue Ocean Strategy (BOS) framework as a

business-level strategy. Criticism is mainly centered on the fact that the BOS framework cites

empirical examples of western companies and western environments where economies are stable

sufficiently to sustain combination strategies, making critics interrogate its sustainability outside

the western business domain (Mi. 2008)

Blue Ocean Strategy epitomizes a radical departure from conventional strategy thinking, in terms

of which the cornerstone of blue ocean strategy framework (Value Innovation) hinges on

simultaneous pursuance of differentiation and low cost. As such, critics are mainstreaming their

arguments over the ‗strategic miracle‘ of blue ocean framework that enables firms to abrogate

the value-cost trade off through synchronous achievement of differentiation and low cost. It is

conventionally believed that a company can either create greater value at a greater cost or

reasonable value at a lower cost, whereby strategy is conceptualized as making a trade-off

between value innovation and cost leadership; unless such a combination strategy can be pursued

for a short-lived time span. Otherwise, in the long run, the two cannot be actualized

simultaneously. In light of all these angles of criticism to the BOS framework, the researcher has

developed invariant commitment to assess the sustainability of BOS framework as a business-

level strategy with particular focus on Zimbabwe.



1.3 OBJECTIVES OF THE STUDY

In today`s highly competitive business environment, it has become strategically imperative for

firms to have a strategy in place to ensure a competitively superior fit between an organization

and its environment (Lynch 2009), rather than passively drifting forward without a strategy as a

competitive compass. As such, Blue Ocean Strategy is an epitome of an unconventional

strategy paradigm, pivoted on creating and capturing new demand in an uncontested market

space, juxtaposed to a strategic maneuver premised on head-on rivalry with competitors, in an

existing market space, making value cost trade-offs, aligning a firm`s activities with a strategic

choice of either differentiation or relatively lower costs (Red ocean approach). Nonetheless,

Blue Ocean Strategy has yet been exposed to its share of criticism, mainly on the grounds of

sustainability. In this regard, this study seeks to assess the sustainability of the Blue Ocean

Strategy framework as a business-level strategy through achieving the following objectives:

To assess the sustainability of the Blue Ocean Strategy framework in Zimbabwe as a

business-level strategy

To assess the marginal benefits of Blue ocean strategy relative to the cost of adoption and

implementation in the Zimbabwean economic context.

To establish whether Blue Ocean is a winning strategy in practice

To compare red oceans (conventional and existing, market space) to blue oceans

(incipient and uncontested market space)

To establish the long-term survival and going concern mechanisms for blue ocean

strategy



1.3.1 RESEARCH QUESTIONS

This study `s guiding roadmap, pursuant to the realization of research objectives, is the

aggregate of the following research questions;

Is Blue Ocean Strategy a long-sighted and sustainable business-level strategy or

just a temporary competitive tactic in Zimbabwe?

To what extent can blue ocean framework be a winning strategy?

If sustainable, at what cost-return ratio can Blue ocean strategy be implemented in

a Zimbabwean Economy?

What are the noticeable differences between blue ocean markets and red ocean

markets?

How does blue ocean strategy survive in the long run?

1.3.2 STATEMENT OF HYPOTHESES

The set of objectives underpinning this study are an endeavor to deduce either one of the

following hypotheses

H0: Blue ocean strategy framework is not a sustainable business-level strategy in

Zimbabwe

H1: Blue Ocean Strategy framework is a sustainable business-level strategy in

Zimbabwe



1.4 SIGNIFICANCE OF THE STUDY

Research studies are conducted for a purpose (Sekaran 2000) and this study is not an exception.

Its significance is thus the aggregate of the following;

1.4.1 THEORETICAL SIGNIFICANCE

Blue Ocean Strategy framework is the most promising future of strategy, yet the most attention-

starved in terms of literature. Beyond the borders of (Kim and Mauborgne, 2005a, 2005b) `s own

articles and book reviews, there is only a trickle of written scriptures published specifically

focusing on the BOS framework. It has been out of this superficial publication on the framework

that interest descended heavily upon the researcher‘s intention to co-build (with other strategists)

on to the skeletal body of research on this new strategic paradigm.

When Kim and Mauborgne (2005) published their book, Blue Ocean Strategy: How to Create

Uncontested Market Space and Make Competition Irrelevant) it appeared as if they were talking

of a completely unprecedented phenomenon, whereas the ideology underlying in the framework

has since existed a long way back, probably in different terminology by ancient scholars of

strategy (―Best-Cost Strategy: Porter; 1985, Total Quality Strategy: Crosby; 1979, etc.). Thus, it

is from this angle that, the researcher also endeavors to highlight the synergies and contrasts

between the newly propounded, 21st century leading strategic paradigm (Blue Ocean Strategy)

and other strategic dimensions that existed prior to its emergence. This will also develop a body

of literature that will augment comprehension of the new strategic dimension and its roots.

1.4.2 SIGNIFICANCE TO THE RESEARCHER

It is the institution‘s policy that a research project be submitted as a pre-requisite for graduation

in the area of study. Thus, this study is undertaken in partial fulfillment of the requirements of a

Bachelor of Commerce Honors Degree in Management.

As an aspiring entrepreneur and a passionate follower of the Blue Ocean philosophy, the

researcher will be justified by empirical evidence to employ blue ocean strategies to pace-set the

economic platform and permeate a new generation business culture in Zimbabwe.



1.4.3 SIGNIFICANCE TO ZIMBABWEAN COMPANIES

An investigation into the sustainability of the Blue ocean strategy framework will yield a

stepping stone into redefining the business approach in Zimbabwe, by permeating a paradigm

shift from an era of basic service offered to confined demand (Red Ocean approach), to value

innovation and premium service provision to the unthought-of demand and to all possible

corners of the markets in the business world (Blue Ocean approach) to spur a broad scope of

economic activity in Zimbabwe, and hence, the universe at large.

Also an empirical investigation into the sustainability of the contemporary strategic framework

and the practicability of abrogating the value-cost trade off; inherent weaknesses and strengths of

the framework; the nature of targeted customers, empowers the researcher with sufficient levels

of confidence to envisage the findings of the study as being useful in substantiating a solid

ground to qualify beyond a shadow of reasonable doubt, its viability in the real business world,

such that sound, informed recommendations can be made as feedback to Zimbabwean companies

in relation to their strategic planning processes.

1.5 ASSUMPTIONS OF THE STUDY

This study was premised on and guided by, the following assumptions;

There are companies consciously pursuing blue ocean strategies and some who are

adopting the framework unawarely.

The strategic knowledge of overall corporate direction is mainly held at the helm of the

organization by the top management

Economists are of paramount significance in interpreting the economic intent of the

nation, hence, can suggest strategy sustaining techniques pursuant to alleviating the

economy in its wholesomeness.

The selected sample frame will sufficiently represent the whole target population

The responses from the research participants would be their true and honest reflection of

the relevant issues under study



1.6 DELIMITATIONS

In order to set a grand design for a feasible research, in the light of the time and resource

parameters at the researcher’s disposal, the scope of the study is delimited to the following

boundaries;

The researcher concentrated on Zimbabwe as a case study

The research catchment area is confined to Zimbabwe‘s two largest cities (Harare and

Bulawayo), as well as two smaller, yet strategic towns (Chinhoyi and Chegutu), in order

to get a dilutedly fair economic representation of the whole economy from both larger

and smaller economic circuses.

The researcher focused on the BOS framework as a business-level strategy and a holistic

approach to strategy formulation and implementation frameworks in general was beyond

the scope of this study.



1.7 LIMITATIONS

The following is a list of the limitations that confronted the researcher in formulating and

executing the research.

At the zenith of the limitations catalogue, are exploitative financial challenges. All efforts

were raised to create and maintain invariant quality standards for the project in the face of

deprived resources and a tight time scale. Data collection and project administration

expenses (printing and binding) posed critical financial challenges. Nonetheless, the

researcher had wrestled to budget enough to ensure that the quality of the project would

not be constrained by resource hurdles.

The researcher had to balance other commitments (Assignments, course studies and

preparation of examinations) within abridged time scale to accomplish the project, in

terms of which a great deal of social time was sacrificed

to ensure timely completion of the project.

The researcher had limited expert knowledge in research. However, the knowledge that

was acquired during the study of the Research Methods course was put to the most

effective use. Assistance was sought from the experienced lecturers and secondary

information sources were consulted successfully

The concept of Blue Ocean is new in the business world and as such, the researcher had

to provide premium clarity on the study to get relevant responses to the research

questions to realize the research objectives.



1.9 PROJECT STRUCTURE

This project comprises five chapters. It will then include the appendices of tools used as

well as the references sections at the end as follows:

Chapter 1: General Introduction

The General Introduction lays the bedrock upon which this whole study is anchored by

highlighting the background to the study, elucidating the statement of the problem, the

research objectives and questions, highlighting the assumptions, delimitations,

limitations, ethical considerations as well as the significance of the Study.

Chapter 2: Literature Review

Chapter Two explores the wealth of literature on strategy in general, business-level

strategy in particular, with Blue Ocean Strategy emerging as the centerpiece of discussion

in the chapter. The cornerstone role of this chapter stands to be the deductive function

that augments the inductive empirical investigation to develop a body of knowledge that

addresses the research objectives and prove one of the developed hypotheses.

Chapter 3: Research Methodology

The philosophy underpinning the study, its distinctive paradigm, design, data collection

techniques, sources of data as well as the data presentation and analysis techniques are

elucidated and substantiated collectively to form the research methodology in Chapter 3.

Chapter 4: Data Presentation & Analysis

Over and above presentation, description, categorizing and interpreting of data, this

chapter includes qualitative and quantitative analysis of data with the motive of deducing

the resultant product of the research findings.

Chapter 5: Summary of Research Findings, Conclusions &Recommendations

This chapter thwarts and winds up the study in the form of a summary encompassing the

research findings, conclusions informed and inspired by the findings and

recommendations to the Zimbabwean business fraternity on how to consolidate and

sustain Blue Ocean Strategies to define a completely new business era and to map the

future of business culture in this particular economy.



Appendix – this is the last item of this report where references and a collection of tools

used in the study are given.

1.10 CHAPTER CONCLUSION

As part of the background, this chapter introduced the gist of Blue Ocean Strategy, highlighting

the invaluable contribution of its ancient equivalents to the successful birth of a redressed and

fresher strategic paradigm vis-à-vis the traditional approach to strategy. It is also in this chapter

that the statement of the problem, the research objectives and research questions were presented,

including the delimitations, limitations and ethical considerations, as well as the significance of

the study, and of course not to the exception of the assumptions upon which the study is

underpinned. The next chapter focuses on Literature Review as a frame of reference for this

study.

.



CHAPTER 2 LITERATURE REVIEW

2.0 INTRODUCTION

This chapter focuses on the nature, evolution and mainstream manifestation of the concept of

strategy generally, and Blue Ocean Strategy particularly as a business level strategy. The

literature reviewed splatters the bedrock upon which the theoretical frame of reference for this

study is erected, pursuant to deducing one of the hypotheses developed earlier. Beyond

reviewing the wealth of existing literature on strategy, this chapter also confers the researcher

with the platform to challenge the existing theory after empirical investigation (if results prove

the need to) as well as providing footprints for future research.

2.1STRATEGY

The nature of strategy is in such a way that, a hard and fast rule in defining it may be illusive, as

it cannot be explained as a set of straight-forward definitions and rules, fit for memorization and

application. The variety of partially conflicting views means that strategy cannot be reduced to a

number of matrices or flow diagrams that one must learn to fill in. Nonetheless, in a study

focusing on a business level strategy, it is in every angle of expectation to have a clear definition

of strategy that would be employed with consistency throughout the study. To that end, the

exodus to a clear definition of strategy begins with an aggregate of view dimensions from

different practitioners and theorists. The most holistic definition of strategy is profoundly buried

in Hax (1990)‘s five-fold definition that looks at strategy from five perspectives, as follows:

Strategy as a Coherent, Unifying, and Integrative Pattern of Decisions

From this perspective strategy forms the major force that provides a comprehensive and

integrative blueprint for an organization as a whole. As such, strategy gives rise to the

plans that assure that the basic objectives of the total enterprise are fulfilled. According to

de Wit and Meyer (1998), this assumes that strategy is conscious, explicit and proactive.



Strategy as a means of establishing an organization’s purpose in terms of its long-

term objectives

This classical view looks at strategy as a way of explicitly shaping the long-term goals

and objectives of an organization; of defining the major action programs needed to

achieve those objectives; and of deploying the necessary resources.

Strategy as a definition of a firm’s competitive domain

From this angle, strategy‘s central concern is defining the businesses a firm is in or

intends to be in. This process of definition addresses issues of growth, diversification and

investment. To that end, the key step in defining a formal strategic planning process is

effective business segmentation, which explicitly identifies a firm‘s domain. In the

context of new strategic thinking, the choice of reconstructing market boundaries as one

of Blue Ocean Strategy‘s six principles (as propounded by Kim and Mauborgne; 2005)

represents congruence with this definition of strategy, on the part of choosing an

uncontested competitive domain.

Strategy as a response to external opportunities and threats and to internal

strengths and weaknesses as a means of achieving competitive advantage.

According to this perspective, the central thrust of strategy is to achieve a long-term

sustainable advantage over a firm‘s key competitors in every business in which it

operates. This view of strategy is what underlies most of the modern analytical

approaches used to support the search for a favorable competitive position. It recognizes

that:

The ultimate objective is for the firm to achieve a long-term competitive

advantage over its key competitors in all of its businesses.

This competitive advantage is a result of thorough understanding of the external

and internal forces that strongly affect an organization. Externally, a firm must

recognize its relative industry attractiveness and trends, and the characteristics of

major competitors. This helps generate the discovery of the opportunities and



threats that must be reckoned with. Internally, a firm must identify its competitive

capabilities. This leads to the defining of its strengths and weakness.

Strategy allows organizations to achieve a viable match between their external

environment and their internal capabilities. The role of strategy is not viewed

simply as a passive response to the opportunities and threats presented by the

external environment, but rather as a process of continuously and actively

adapting the organization to meet the demands of a changing environment.

Strategy as a logical system for differentiating managerial tasks at corporate,

business and functional levels.

The various hierarchical levels in the organization have quite different managerial

responsibilities in terms of their contribution to defining the strategy of the firm. The

corporate level is responsible for tasks that need fullest scope in order to be addressed

properly. Primarily, this means defining a firm‘s overall mission; validating proposals

emerging from business and functional levels; identifying and exploiting linkages

between distinct but related business units; and allocating resources with a sense of

strategic priorities.

The business level is the proper place for all the activities needed to enhance competitive

position of each individual business unit. The key assignment of the functional level is to

develop necessary competencies – in finance, administrative infrastructure,

manufacturing, distribution, marketing, sales and services – needed to sustain competitive

advantage.

Pursuant to that, recognizing the differences in these managerial roles, integrating them

harmoniously, is another key dimension of strategy.



It is in concordial agreement with Hax (1990)‘s conceptualization of strategy, that the thesis of

Mintzberg (2009)‘s five-fold definition of strategy was rendered. In the author‘s dimension

(Mintzberg), strategy is an aggregate of five perspectives, in the form of:

Strategy as a Plan – a direction, a guide or course of action into the future, a path to get

here from there

Strategy as a Pattern – the aggregate of behavior that can be consistently observed in an

organization over time.

Strategy as a Perspective – the organization’s fundamental way of doing doings and

perceiving the world

Strategy as a Position – the locating of particular products in a particular market (an

“environment”)

Strategy as a Ploy – a specific maneuver intended to outwit a competitor

At a closer glance, it is noticeable that the nature of Blue Ocean strategy is mainly reflected in

three of Mintzberg‘s perspectives. Strategy as a pattern conforms to the fundamentals of creating

blue oceans, whereby an aggregate of pioneering behavior invariantly, becomes the centerpiece

in blue ocean strategy. Though blue ocean strategy is not just about pioneering new technologies,

products and services, pioneering is the gist of blue ocean strategy, such that if it consistently

becomes the behavior of an organization, it becomes a strategy by virtue of pattern.

As a new strategic thinking dimension, blue ocean strategy posits a company as deviant and

divergent from the concept of wary competition, in pursuit of free ‗sailing‘ space, which is

reflected by Mintzberg‘s strategy as a perspective. A company that chooses to break away from

fierce road transport industry competition may define itself as a travel company rather than a bus

company and ventures into, perhaps airlines as a way of creating a blue ocean through market

broadening. This is congruent to strategy as a way how a company perceives itself – strategy as a

perspective.



Also, blue ocean strategy conforms to strategy as a position in terms of which a company choses

an environment to position itself (whether in red oceans or in uncontested market space). Thus

the concept of blue ocean strategy is not without concrete and firm support, correlation and

concordial agreement with other strategy theorists apart from Kim and Mauborgne (2005).

In light of all the angles highlighted by different theorists, a unified concept of strategy can now

be developed with sufficient levels of comprehensiveness. Thus the concept of strategy embraces

the overall purpose of an organization. From this unifying point of view, strategy becomes a

fundamental framework through which an organization can assert its vital continuity, while at the

same time purposefully managing its adaptation to the changing environment to gain competitive

advantage (de Wit and Meyer; 1998).

2.2 THE ORIGIN OF STRATEGY

The word strategy can be traced from as back as the ancient Athenian position of strategos, a

compound of ―stratos‖; which meant army and ―agein‖, to lead (Stahl and Grigsby; 1997). Thus

the emergence of the term paralleled increasing military decision-making complexity. According

to Cummings (1993), Aineias the tactician, who wrote the earliest surviving western volume on

military strategy, ―How to survive under siege”, in the mid fourth century BC, was primarily

concerned with how to deploy available manpower and other resources to the best advantage. In

this direction, if military practice is identified as a metaphor for business competition, the

strategic principle of the Strategos still provide useful guides for those in the business strategy

formulation to date.

2.3 STRATEGY ANATOMY

Strategy can be conceptualized as an aggregate of three fundamental facets: Process, Content,

and Context, where process refers to the manner in which strategies come about; content being

the product of process, stating what is and what should be, the strategy for the company in each

of its constituent units (Hax 1990). Lastly, according to the author, context refers the set of

circumstances under which both the strategy process and strategy content are determined, stating

where and in which firm or environment are the strategy process and strategy content embedded.



It is from the content, where the gist of this study emanates and for that very reason, the anatomy

of the strategy content shall be viewed at a magnified scope. To that end, the content of strategy

can be further segmented into three taxonomies namely, corporate level strategy; business level

strategy and functional level strategy as depicted in fig 2.1 below.

Fig. 2.1 Strategy Anatomy

Source: www.docstoc.com (2015)



2.3.1 CORPORATE LEVEL STRATEGY

“Consider the little mouse, how sagacious an animal it is which never entrusts its life to one hole

only” (Plautus 254-184 BC)

Stahl and Grigsby (1997; 114) defines corporate strategy as the broad and long-lasting decisions

on what businesses a particular firm should be in, pursuant to addressing underlying issues of

concentration and diversification. The term decision here implies that a choice is consciously

made among available alternatives. The ultimate effect of corporate level strategy is hence,

creation of the strategic compass that points out the way in determination of the overall direction

towards where a firm intends to maneuver.

Within the corporate strategy is embedded the concept of strategic fit and core competency

which precipitates the paradox of responsiveness and synergy, where companies have to make a

choice between concentration and diversification. As concentration refers to offering products or

services in narrow markets, diversification on the contrary, becomes the resource leveraging in

pursuit of economies of scope, where a firm is able to productively share resources among two or

more business units. In this regard, Porter (1987) posits that corporate strategy is what makes the

corporate whole add up to more than the sum of its business unit parts. A more comprehensive

visualization of the strategy content can be aided by fig. 2.2 below

Fig 2.2 Strategy Content




2.3.2 BUSINESS LEVEL STRATEGY

“Drive thy business; let it not drive thee!” (Benjamin Franklin 1706-1790)

As the corporate strategy epitomizes the grand plan and the fundamental decision on which

businesses to be in, business level strategy devises a roadmap on how to compete in the chosen

businesses. Gallagher (2004) defines business-level strategy as an integrated and coordinated set

of commitments and actions the firm uses to gain a competitive advantage by exploiting core

competencies in specific product markets.

De Wit and Meyer (1998) brings in the field of strategy, contrastive perspectives of strategy at

business-level which are broadly examined below:

2.4 THE OUTSIDE-IN PERSPECTIVE

It is at this organizational decision making level, where a divergence in strategic paradigm

emerges. According to de Wit and Meyer (1998), two perspectives of strategy evolve at business

level, in terms of which a distinct line is drawn between the Outside-in perspective which mirrors

the traditional strategy conceptualization and the Inside-out perspective which epitomizes the

ground breaking, new era strategy (the Blue Ocean strategy framework). The outside-in

perspective is an absolute epitome of what Kim and Mauborgne (2005) referred to as a Red

Ocean strategy. Strategists adopting this perspective believe that firms should not be self-

centered, but should continuously take their environment as a starting point when determining

their strategy. Successful companies, it is argued, are externally-oriented and market-driven

(Day, 1990; Webster, 1994). Such companies take their cues from customers and competitors,

and use these signals to determine their own game plan (Jarwoski and Kohli, 1993). This

perspective is more akin to Porter (1985)‘s Generic strategies and probably the reactor and

analyzer type of Miles and Snows (1978)‘s adaptive strategies, which shall be examined in detail

herein.



Competitive strategy (business-level strategy) can be conceptualized in two antagonistic

dimensions; anticipatory tactics which mirror blue ocean strategy, and engagement tactics which

reflects red ocean strategy as divulged in fig 2.2 below

Fig 2.3 Business-Level Strategy


Fig 2.4 above typifies beyond a shadow of doubt, the red ocean approach to strategy, in terms of

which the outside-in perspective is envisaged at its best. With the first quadrant (yellow;

preemption) reflecting Miles and Snows (1978)‘s prospector type of strategy characterized by

pioneering of new products and new technologies, which draw it towards the blue ocean

philosophy, however the difference lies on focusing on competitors.

The second quadrant, (red; attack) epitomizes Miles and Snows (1978)‘s analyzer strategy,

characterized by imitating market leaders and confront them using cost advantage (leveraging on

no/low R&D costs). The third quadrant reflects Miles and Snows (1978)‘s reactor strategy,

characterized by drifting with the environment as it goes and wait for events to change then

respond contingently – a passive and unpredictable kind of strategy, with a high degree of

inconsistency.

Lastly, the fourth quadrant represents what Miles and Snow (1978) calls a defender strategy,

which has an element of blue ocean philosophy in the sense that it seeks to fortify gained market

step by creating structural barriers in the industry, usually sealing the market with greater levels

of efficiency and low cost. However, the distinguishing factor is the focus; this strategy seeks to



consolidate an established ground in an existing market, whereas Blue Ocean Strategy seeks to

create unprecedented value beyond boarders of competition, and consequently make it

(competition) irrelevant.

Also under this perspective (outside-in) lie Porter (1985)‘s generic strategies, as the most

prominent traditional strategic framework that mirrors the red ocean approach to strategy,

underpinned by the fundamental conviction that quality and low cost cannot be achieved

simultaneously

Fig 2.4 PORTER’S GENERIC STRATEGIES




According to Porter (1987), two competitive dimensions are the keys to business-level strategy,

pursuant to responding to the challenges of his prior identified five forces. The first dimension is

a firm‘s source of competitive advantage, which involves deciding whether a firm tries to gain an

edge on rivals by keeping costs down or by offering something unique in the market. The second

dimension is firms‘ scope of operations, which involves deciding whether a firm tries to target

customers in general or whether it seeks to attract just a segment of customers. Three generic

business-level strategies emerge from these decisions:

Cost leadership;

Differentiation;

Focus:

Focused Cost leadership; and

Focused differentiation.

In Porter (1985)‘s landmark theory on strategy, encapsulated is the conviction that rarely can a

firm be able to offer both low prices and unique features that customers find desirable, a notion

loudly elucidated in the author‘s controversial statement ― being ‗all things to all people‘ is a

recipe for strategic mediocrity and below average performance‖ (p. 12). Porter was of the belief

that, if a benefit of doubt can be given to a fraction that can abrogate the value-cost trade off;

those firms will be following what the author dubbed ―a best-cost strategy‖ (which mirrors what

in a concise approach, Kim and Mauborgne (2005) referred to as the Blue Ocean strategy). The

author further raised an intriguing argument in the field of strategy when he asserted that there is

a fourth defacto strategy in the business-level competitive strategy, which the author identifies as

―stuck in the middle‖. It is however, not an a priori, purposeful strategy per se but the result of

not successfully pursuing any of the three generic strategies. Reduced in simple language, it

implies that in pursuit of simultaneous low cost and appealing unique features, firms may lose

track and end up ―stuck in the middle‖ of low-cost and differentiation.



Fig 2.5 OVERALL COST LEADERSHIP


In Porter (1985)‘s postulation, cost leadership strategy hinges on a firm‘s endeavor to achieve the

lowest possible cost of operation in the industry, through managing relationships throughout he

value chain and lower costs throughout the chain. It is noteworthy that, a firm can be the lowest-

cost producer yet not offer the lowest priced products/services. According to Stahl and Grigsby

(1997), this typical firm would enjoy profitability above industry average.

However, cost leaders often do compete on price and are very effective at such a form of

competition with their low-cost structures.



Successful implementation of this particular generic strategy calls for an organization-wide

commitment to achieving a low-cost structure and a broad scope to serve many industry

segments to capitalize on breadth of operations so as to achieve cost advantage. Low-cost

producers typically sell a standard, or no-frills product and places considerable emphasis on

efficiency and on reaping scale or absolute cost advantages from all sources, (de Wit and Meyer;

1998). This can be actualized through a multiplicity of business re-engineering processes, to

ensure efficient execution of day to day tasks (easy of doing business); aggressive construction

of efficient scale facilities; vigorous pursuit of cost reduction from experience; tight cost and

overhead control; outsourcing non-core activities; preferential access to raw materials; acquiring

buying economies of scale; and attending all possible critical cost drivers. In this regard, the

heart and focal point of low-cost leadership lies in the manufacturing function, being the

‗maternity ward‘ within which pitfalls of this generic strategy are ‗born‘. The imperativeness of

lean operations for low-cost leadership, usually results in exclusive focus on manufacturing to

the detriment of other mainstream business concepts, like marketing, research and development,

total quality management to mention but a few.

In extended scrutiny of Porter (1985)‘s generic strategies, Lynch (2009), raised a number of

issues that seem to be handicapping the robustness and the effectiveness with which the

strategies can be utilized as a strategic compass to map the road to corporate success. In his

thesis, the author highlighted the downside of the overall cost leadership as follows:

As companies gain experience in the industry, they will ultimate descend down their

experience curve and reduce their costs as well. (This raises a question of ―how far can

cost leadership be sustainable in the long run?‖).

Excessive cost-reduction ultimately results in a firm having no option, but to temper with

the product features and attributes, potentially affecting functionality and standard

quality.



Low cost leadership assumes that technology is relatively predictable, if changing.

Radical change can so alter the cost positions of actual and potential competitors that the

concept may be of only limited relevance in fast-changing, high technology markets.

The major strategic problem with cost leadership as a generic form of business level strategy is

that a firm must be a cost-leader and not one of the several firms vying for that position, yet there

can only be one leader among a multiplicity of firms. This explains the predicaments that Bata at

local level; and Northwest Airlines at global level, found themselves within. Bata endeavored to

adopt a low cost leadership strategy where it aimed at using its economies of scale in gaining

market competitive advantage, through delivering its products at the lowest possible cost of

production (marketingteacher.com 2015). This whole strategic plan staggered on execution as it

failed to stand the low-cost leadership battle, in the face of Asian trader companies, which

according to Porter (1985) is getting ―stuck in the middle‖. Similarly, Northwest Airlines is

another low-cost firm that fell in the same trap (de Wit and Meyer; 1998: 352). Nevertheless,

companies like Wal-Mart have proved to have succeeded in pursuing overall cost leadership as

depicted in fig.

It is in the light of these highlighted repercussions associated with the extremity and myopia of

overall cost leadership as a generic business level strategy, that the new strategy paradigm was

developed by the Blue Ocean strategy vanguards in a bid to address and mitigate the blind spots

of traditional strategic thinking.

It was Porter (1985)‘s argument that, a cost leader must achieve parity or proximity in the bases

of differentiation relative to competitors to earn above- industry average profits, even though it

relies on cost leadership for its competitive advantage. It was this notion that served as a stepping

stone for a creative refinement by Kim and Mauborgne (2005) that gave birth to Blue Ocean

Strategy framework, where they assert that if a firm can achieve low-cost and a leap in value for

customers simultaneously, it will earn disproportionately high profitability and unparalleled

growth.



Fig. 2.6 OVERALL DIFFERENTIATION

Source: www.docstoc.com (2015

According to Porter (1985), differentiation is a business level generic strategy employed by a

firm to seek uniqueness in its industry along some dimensions valued by customers. The author

further posits that the choice to uniquely offer one or more none-price attributes that many

buyers in an industry perceive to be important is rewarded by a premium price.



Differentiation can be on the basis of the product itself; the delivery system by which the product

is offered; or the marketing approach, among a broad range of other factors. Pursuant to that,

Porter (1985) argues that a firm that can achieve and sustain differentiation will be an above

industry performer in its domain, if its premium price exceeds the extra costs incurred in the

process of raising the proportionate value for buyers. Again, the author asserts that just like a

cost leader needs to aim differentiation parity or proximity, a differentiator also should aim cost

parity or proximity relative to competitors by reducing costs in all areas that do not affect

differentiation. To that end, it is noteworthy that the pressure for a differentiator to achieve cost

parity or proximity relative to competitors, coupled by the pressure for a cost leader to achieve

differentiation parity or proximity, to earn above-average industry profits in either case, is what

seemed to be the jig-saw puzzle that Kim and Mauborgne (2005), managed to fit in the vanguard

of the standing out new strategy paradigm (Blue Ocean Strategy framework).

The logic of differentiation strategy requires that a firm choose attributes in which to

differentiate itself that are different from its rivals. In juxtaposition to cost leadership, however,

there can be more than one successful differentiation strategy in an industry if there are a number

of attributes that are widely valued by customers. In light of that, it can be analyzed that the

value thrust is more viable than the cost thrust. (Value for buyers is the point of departure in Blue

Ocean Strategy framework)

Differentiation as a generic business level strategy is typical of the prospector strategy as

propounded by Miles and Snow (1978) in their adaptive business level strategy. It is the products

and/or services offerings of this innovative nature that the blue ocean strategy‘s analytical tool

(Pioneer-Settler-Migrator Map) classifies as pioneer products/services. However, Lynch (2009)

also points out some issues that seem to water down differentiation as a generic strategy. The

author asserts that differentiated products are assumed to be higher priced. This is probably too

simplistic, in the sense that the form of differentiation may not lend itself to higher prices.

The notion behind Lynch (2009)‘s argument is premised on the fact that Porter (1985) just

throws a dubious assumption that once differentiation has been decided on, it is obvious how the

product should be differentiated. This argument became the hallmark of Mintzberg (1996)‘s

foundation for his six generic strategies that were developed in an attempt to address inherent

weaknesses in Porter‘s generic strategies.



In that direction, Mintzberg et al (1996) postulates six generic strategies addressing clearly the

modes of differentiation available for firms who seek to be unique in the industry. Thus the

strategy was broken down into an aggregate of the following:

Differentiation by price – this is the typical cost leadership strategy under Porter‘s

generic strategies, whereby the producer seeks to absorb the lost margin or makes it up

through a higher volume of sales attracted by low price. This strategy may be used with a

product undifferentiated in any way (in effect a standard design, perhaps a commodity)

Differentiation by image – according to Mintzberg et al (1996), marketing is sometimes

used to feign a difference where it does not otherwise exist, that is, an image is created

for a product, including cosmetic differences to a product that do not enhance

performance in any serious way, for instance, putting a fancier package for yoghurt.

Differentiation by support – this entails a more substantial form of differentiating a

product or service offering, yet still having no effect on the product itself (something that

goes alongside the product, for example, 24-hour delivery; servicing the product).

Congruent to this strategic dimension, Levitt (1980) argues the interesting point that

―there is no such thing as a commodity‖ (p. 8). The author‘s argument is pivoted on the

belief that, no matter how difficult it may be to achieve differentiation by design, there is

always a basis to achieve another substantial form of differentiation, especially by

support.

Differentiation by quality – this form has to do with features of the product that makes

it better (not fundamentally different, just better). Its either the product performs with (1)

greater initial reliability; (2) greater long-term durability; and/or (3) superior

performance.

Differentiation by design – this entails offering something that is truly different;

something that breaks away from the ―dominant design‖. When everyone was making

cameras whose pictures would be seen next week, Edward Land made one whose

pictures would be seen the next minute (Mintzberg et al; 1996).

Undifferentiation strategy – according to the authors, to have no basis for

differentiation is a strategy.



In as much as Mintzberg et al (1996) have had moved a long way in remedying, Porter (1985)‘s

blind spots on his prominent generic strategies, a gap still existed in strategic thinking, as the

authors treated differentiation by price and differentiation by quality as mutually exclusive

strategic dimensions. However, Gilbert and Strebel (1998) disagrees with this notion, arguing

that highly successful companies such as some of the Japanese automobile manufacturers have

adopted ―outpacing strategies‖, in terms of which they first use low cost strategies to secure

markets, and then, by ―proactive‖ differentiation moves, they capture certain important market

segments. Or else, they begin with value differentiation and follow up with ―preemptive‘ price

cutting. In effect the authors argue that companies can achieve both forms of Porter‘s

competitive advantages simultaneously. This argument gives room to the standing out of the

intersection strategic paradigm (Blue Ocean Strategy) that provides a road map to the

actualization of both, low price and exceptional quality.

2.4.1.3 FOCUS STRATEGY

This generic strategy is quite different from the others because it is pivoted on the choice of a

narrow competitive scope within an industry. The focuser selects a segment or group of

segments in the industry and tailors its strategy to serving them to the exclusion of others. By

optimizing its strategy for the target segments, the focuser seeks to achieve a competitive

advantage in its target segments even though it does not possess a competitive advantage overall,

(Porter; 1985).

The focus strategy has two variants:

Focused Cost leadership – A focused cost leadership strategy requires competing based

on price to target a narrow market

Focused differentiation – A focused differentiation strategy requires offering unique

features that fulfill the demands of a narrow market.



Faced with the alluded veritable onslaught on generic strategies, many authors of modern day

strategy have advocated that Porter should gracefully concede that there might be some

weaknesses in his concept. However, Porter hit back in 1996 by drawing a distinction between

basic strategy and ―operational effectiveness‖. The former concerned the key strategic decisions

facing any organization while the latter is more concerned with such issues as Total Quality

Management, out-sourcing, reengineering among others. Nonetheless, empirical evidence far

before the emergence of Blue Ocean strategy shows that some companies do pursue

differentiation and low cost strategies at the same time. According to Lynch (2009), they use

their low costs to provide greater differentiation and then reinvest the profits to lower their costs

even further. Benetton (Italy); Toyota (Japan); BMW (Germany), have been cited as examples.

This dispels Porter‘s threats of getting ‗stuck in the middle‘, as further qualified by the strategic

framework under study (Blue Ocean Strategy). The author concluded that if Porter (1985)‘s

generic strategies framework can be treated only as part of a broader strategic analysis (not a

mainstream strategic dimension), it can serve as a useful tool for generating basic options for

strategic analysis, as it forces exploration of two important aspects of strategic management: the

role of cost reduction and the use of differentiated products in relation to customers and

competitors. Pursuant to that comment, the Blue Ocean framework uses the two fundamental

constructs (low cost and differentiation) as the building blocks in strategic consideration, to the

outstanding emergence of the new future of strategy (Blue Ocean Strategy).

2.5 THE INSIDE-OUT PERSPECTIVE

The inside-out perspective mirrors the new era, ground breaking strategy (the Blue Ocean

strategy framework), and its ancient equivalents, inclusive of the Total Quality and Customer

Value Strategy. Strategists adopting this dimension of strategy argue that strategies should not

be built around external opportunities, but around a company‘s strengths instead. They believe

that organizations should focus on the development of difficult-to-imitate competencies and/or

innovation of unprecedented value. In this regard, markets should subsequently be chosen,

adapted or created. Successful companies, it is argued, are competence-based and are market-

drivers, (Prahalad and Hamel, 1990; Heene and Thomas, 1996). Under this perspective lies the

lasting contribution of Crosby (1979)‘s Total Quality and Customer Value strategy, which

epitomizes the ancient version of Blue Ocean strategy.



2.5.1.0 TOTAL QUALITY AND CUSTOMER VALUE STRATEGY: CROSBY (1979)

The invaluable contributions of theorists like Deming (1986): Juran (1964) and Ishikawa (1985)

in the advocacy for quality at low cost cannot go unnoticed. However, it was Crosby (1979) in

his prominent book “Quality Is Free” that challenged the conventional wisdom entrenched in

the traditional economic theory that quality or any feature of a product, costs money. Crosby

(1979) argues that firms can design the product the right way at the first time to eliminate the

possibility of recurring defects in production, as well as designing manufacturing processes so

that the conversion process maintains quality consistency. The author further posits that,

continuously improving the products/services and the process will yield in even greater value for

customers.

Total Quality as a business level strategy, emphasizes on customer centricity and consistent

value improvement. Its twin image with the Blue Ocean Strategy emanates from the fact that its

primary focus in on the customer not on the competitor. The primary objective of this strategy is

to retain current customers and attract new by delivering the best of value

2.5.1.1 Best Net Value: The cornerstone of Total Quality and Customer Value Strategy.

According to Deming (1986), value can be either positive or negative, because value can be

realized, or value can be sacrificed. The author raised an interesting value concept (sacrificed

value versus realized value), in terms of which he asserts that Realized Value (R.V) is the value

that customers receives in the form of utility whereas Sacrificed Value (S.V) is the value the

customer gives up in the form of time, money and energy among other resources.

It is the difference between the alluded two dimensions of value that aggregates to the best net

value, thus if the value realized is greater than the value sacrificed, then the customer realizes a

net value. The business objective is to move the firm‘s customers to a position of higher value

realized and lower value sacrificed, so that the best net value in the industry is offered.



Fig 2.7 The value inequality model

Sacrificed Value

Net Best Value

Realized Value

Source: researcher’s own derivative

The concept illustrated above envisages the evolution of the notion of simultaneous pursuance of

quality and low-cost which came a long way through a series of fine-tuning and refining to the

birth of the now known as the blue ocean strategy. It is the Net Best Value that was referred to as

Value innovation by Kim and Mauborgne (2005), achieved through driving up value for buyers

and reducing costs (an advanced replica of increasing realized value and reducing sacrificed

value).

In light of all the business level strategies examined herein, it is of perceived value to capitalize

on the lead developed so far into the inside-out perspective to rigorously understand the nature

and content of the Blue Ocean Strategy framework at a profound depth.



2.5.2

“The process of discovering and creating blue oceans is not about predicting or preempting

industry trends. Nor is it a trial-and-error process of implementing wild new business ideas that

happen to come across manager’s minds or intuition. Rather, managers are engaged in a

structured process of reordering market realities in a fundamentally new way. Through

reconstructing existing market elements across industry and market boundaries, they will be able

to free themselves from head-to-head competition in the red ocean.”(Kim and Mauborgne: 2005)

2.5.2.1 CREATION OF BLUE OCEANS

The ground breaking strategic hall mark Blue Ocean Strategy materializes from a futuristic and

reconstructionist view of strategy where, it is not the attractiveness of the industry that

cultivates a difference, but what can be done even to a declining industry to create great leaps of

unprecedented value for customers through reconstructing the anchor pillars and building blocks

of the market environment.

According to the traditional conceptualization of industry attractiveness as entrenched in Porter‘s

five forces framework (Porter 1985), industry attractiveness is determined by the aggregate of

the following forces; bargaining power of buyers, bargaining power of suppliers, threats of new

entrants, threats of substitutes and industry competitor rivalry as depicted overleaf:



Fig 2.8 Industry Attractiveness Assessment Model


Contrary to the above notion of focusing hard on environmental scanning and market assessment

to try and come up with an industry with an aggregate of low of the above so highlighted forces,

Blue Ocean creation is centered at value innovation, where all possible sources and forms of

competition are made irrelevant; threats of substitutes and bargaining power of buyers

neutralized by unprecedented and insubstitutable value; threats of new entrants deterred by

patents and copyrights, or weakened by first mover advantages. By virtue of supplying one

unique client, suppliers‘ bargaining power is automatically attenuated. The vanguard of this new

strategic phenomenon, (Kim and Mauborgne, 2005) used the case of Cirque du Soleil, one of

Canada‘s largest cultural exports. Created in 1984 by a group of street performers, Cirque‘s

productions have been seen by almost forty million people in ninety cities around the world. In

less than twenty years Cirque du Soleil has achieved a level of revenues that took Ringling Bros.

and Barnum & Bailey—the global champion of the circus industry—more than one hundred

years to attain. Kim and Mauborgne (2005)

What makes this rapid growth all the more remarkable is that it was not achieved in an attractive

industry but rather in a declining industry in which traditional strategic analysis (five forces

industry analysis framework) pointed to limited potential for growth. Supplier bargaining power

on the part of star performers was strong; so was buyer bargaining power. Alternative forms of

entertainment (Substitutes) — ranging from various kinds of urban live entertainment to sporting

events to home entertainment. Partially as a result, the industry was suffering from steadily



decreasing audiences and, in turn, declining revenue and profits. Ringling Bros. and Barnum &

Bailey set the standard, and competing smaller circuses essentially followed with scaled-down

versions. From the perspective of competition-based strategy (Red Ocean Approach), then, the

circus industry appeared unattractive.

Another compelling aspect of Cirque du Soleil‘s success is that it did not win by taking

customers from the already shrinking circus industry, which historically catered to children.

Cirque du Soleil did not compete with Ringling Bros. and Barnum & Bailey, but created

uncontested new market space instead, that made the competition irrelevant. It appealed to a

whole new group of customers: adults and corporate clients prepared to pay price several times

as great as traditional circuses for an unprecedented entertainment experience. Significantly, one

of the first Cirque productions was titled ―We Reinvent the Circus.‖ (Kim and Mauborgne 2005;

4)

2.5.2.2 NEW MARKET SPACE

The game change strategic approach embedded in Blue Ocean Strategy framework is pivoted

on the notion that, to win in the future, companies must stop competing with each other. Kim and

Mauborgne (2005) reiterated that the only way to beat the competition is to stop trying to beat

the competition.

In this regard, the authors painted a portrait of a market universe composed of two sorts of

oceans: red oceans and blue oceans. Red oceans represent the known market space and all the

industries in existence today. Blue oceans denote the unknown market space and all the

industries not in existence today. In red oceans, industry boundaries are defined and accepted,

and the competitive rules of the game are known – companies try to outperform their rivals to

grab a greater share of existing demand. As the market space gets crowded, prospects for profits

and growth are reduced; products become commodities, and cutthroat competition turns the red

ocean bloody.

Blue oceans, in juxtaposition, are defined by untapped market space, demand creation, and the

opportunity for highly profitable growth. Although some blue oceans are created well beyond

existing industry boundaries, most are created from within red oceans by expanding existing



industry boundaries, as is the case of Cirque du Soleil alluded earlier. In blue oceans,

competition is irrelevant because the rules of the game are waiting to be set.

2.5.2.3 THE IMPACT OF CREATING BLUE OCEANS

The empirical investigation that was spearheaded by Kim and Mauborgne (2005) with a well-

meaning motive to quantify the impact of creating blue oceans on a company‘s growth in both

revenues and profits in a study of the business launches of 108 companies, divulged that 86

percent of the launches were line extensions, that is, incremental improvements within the red

ocean of existing market space. Yet they accounted for only 62 percent of total revenues and a

mere 39 percent of total profits. The remaining 14 percent of the launches were aimed at creating

blue oceans, which generated 38 percent of total revenues and 61 percent of total profits. Given

that business launches included the total investments made for creating red and blue oceans

(regardless of their subsequent revenue and profit consequences, including failures), the

performance benefits of creating blue waters are evident beyond a shadow of reasonable doubt.

Fig 1 below is an endeavor to depict the above scenario.

2.5.2.4 THE RISING IMPERATIVE OF CREATING BLUE OCEANS

There are several driving forces driving the imperativeness of creating blue oceans. Accelerated

technological advances have substantially improved industrial productivity and have allowed

suppliers to produce an unprecedented array of products and services, resulting in increased

numbers of industries and demand exceeded by supply.

The trend toward globalization compounds the situation, as trade barriers between nations and

regions are dismantled and as information on products and prices becomes instantly and globally

available, niche markets and havens for monopoly continue to disappear. While supply is on the

rise as global competition intensifies, there is no clear evidence of an increase in demand

worldwide, and statistics even point to declining populations in many developed markets. The

result has been accelerated commoditization of products and services, increasing price wars, and

shrinking profit margins.

All this suggests that the business environment in which most strategy and management

approaches of the twentieth century evolved is increasingly disappearing. As red oceans become



increasingly bloody, management will need to be more concerned with blue oceans than the

current cohort of managers is accustomed to, (Kim and Mauborgne, 2005)

2.5.2.5 THE HEART OF BLUE OCEAN STRATEGY: VALUE INNOVATION

In Kim and Mauborgne (2005)‘s conviction, the approach to strategy distinguishes successful

companies from the rest. Companies caught in red oceans follow a conventional approach, racing

to beat competition through building a defensible position within the industry. In juxtaposition,

pioneers of blue oceans do not use competition as their benchmark. Instead, they follow a

strategic logic called Value Innovation.

The authors highlight value innovation as the new way of thinking about, and executing,

strategy that results in the creation of a blue ocean and break away from competition. This

concept defies one of the most commonly accepted dogmas of competition-based strategy – the

conventional strategy theory inspired by Porter (1985), that companies can either create greater

value at a greater cost or create reasonable value at lower cost (value-cost tradeoff), in terms of

which strategy is conceptualized as making a choice between differentiation and low cost. On the

contrary, pioneers of blue oceans pursue differentiation and low cost simultaneously.

Instead of focusing on beating completion, the focus of blue ocean strategy descends heavily on

making competition irrelevant by creating a leap in value for the buyers and the company,

thereby opening up a new and uncontested market space. Thus Value Innovation is the

cornerstone of Blue Ocean Strategy and according to Kim and Mauborgne (2005), it places

equal emphasis on value and innovation, whereas, value without innovation tends to focus on

value creation on an incremental scale – something that improves value but is not sufficient to

make a firm stand out in the marketplace. On the converse, innovation without value tends to be

technology-driven, market pioneering, or futuristic, often shooting beyond what buyers are ready

to accept and pay for (p. 13). The value innovation concept is depicted diagrammatically as

below;



Fig 2.9 The Cornerstone of Blue Ocean Strategy

VALUE INNOVATION

Source: W. Chan Kim and Renee Mauborgne (2005), Blue Ocean Strategy; How to create

Uncontested Market Space and Make the completion irrelevant, Harvard Business School Press,

Boston, page 16

Value innovation is created in the region where a company‘s actions favorably affect both its

cost structure and its value proposition to buyers. Cost savings are made by eliminating and

reducing the factors an industry competes on. Buyer value is lifted by raising and creating

elements the industry has never offered. Over time, costs are reduced further as scale economies

kick in due to the high sales volumes that superior value generates.

Fig 2.10 Value Innovation




As shown in fig 2.10, the creation of blue oceans is about driving costs down while

simultaneously driving value up for buyers. This is how a leap in value for both the company and

its buyers is achieved. The fact that buyer value comes from the utility and price that the

company offers to buyers and because the value to the company is generated from price and its

cost structure, has an implication that value innovation is achieved only when the whole system

of the company‘s utility, price, and cost activities is properly aligned, and it is this whole-system

approach that makes the creation of blue oceans a sustainable strategy.

Blue ocean strategy integrates the range of a firm‘s functional and operational activities. In

contrast, innovations such as production innovations can be achieved at the subsystem level

without impacting the company‘s overall strategy. An innovation in the production process, for

example, may lower a company‘s cost structure to reinforce its existing cost leadership strategy

without changing the utility proposition of its offering. Although innovations of this sort may

help to secure and even lift a company‘s position in the existing market space, such a subsystem

approach will rarely create a blue ocean of new market space, (Pitta 2009).

In this sense, value innovation is more than innovation, but a strategy that embraces the entire

system of a company‘s activities instead, where companies are required to orient the whole

system toward achieving a leap in value for both buyers and themselves. Absent such an integral

approach, innovation will remain divided from the core of strategy.

2.5.2.6 RED OCEAN VERSUS BLUE OCEAN STRATEGY

There is a complete reversal opposition between saturated and incipient markets which are

epitomized by the metaphors red and blue oceans respectively, which can be mirrored by a series

of diagrams overleaf, in fig 2.11



Fig 2.11 Red Ocean versus Blue Ocean Strategy




Figure 2.11 outlines the key defining features of red and blue ocean strategies, where

competition-based red ocean strategy assumes that an industry‘s structural conditions are given

and that firms are forced to compete within them, an assumption based on what the academics

call the structuralist view, or environmental determinism. In contrast, value innovation is based

on the view that market boundaries and industry structure are not given and can be reconstructed

by the actions and beliefs of industry players. This according to the advocates of the ‗new era

strategy paradigm‘ (Kim and Mauborgne) is dubbed the reconstructionist view.

In the red ocean, differentiation is costly because firms compete with the same best-practice rule,

hence, the strategic choices for firms are to pursue either differentiation or low cost. Conversely,

in the reconstructionist world, the strategic aim is to create new best-practice rules by breaking

the existing valuecost trade-off and thereby creating a blue ocean.

2.6 FORMULATING AND EXECUTING BLUE OCEAN STRATEGY

The inherent anatomy of strategy has always presented a two fold phenomenon, which is

opportunity and risk. Kim and Mauborgne (2005) argues that there is nothing like a riskless

strategy, not even Blue Ocean can be an exception on the matter of risk. Nevertheless, the unique

ideology behind the imperativeness of creating blue oceans is the concept of opportunity-

maximization and risk-minimization achieved simultaneously. However, Blue Ocean Strategy is

not about intuitive ‗riverboat‘ gambling that can emanate from betting strategy on a random

drawing. Instead, it is a systimatic strategic methodology that is underpinned by its own

principles and analytical frameworks.



2.6.1 THE SIX PRINCIPLES OF BLUE OCEAN STRATEGY

Kim and Mauborgne (2005) highlight the six principles of Blue Ocean strategy as follows;

Formulation principles Risk factor each principle attenuates

Reconstruct market boundaries ↓ Search risk

Focus on the big picture, not the numbers ↓ Planning risk

Reach beyond existing demand ↓ Scale risk

Get the strategic sequence right ↓ Business model risk

Execution principles Risk factor each principle attenuates

Overcome key organizational hurdles ↓ Organizational risk

Build execution into strategy ↓ Management risk

2.6.2 ANALYTICAL TOOLS AND FRAMEWORKS

In an attempt to make the formulation and execution of Blue Ocean Strategy as systematic and

actionable as competing in red waters of known market space, the pioneers of this new strategic

paradigm (Kim and Mauborgne) developed an apt set of analytical tools and frameworks, after a

decade of thorough and rigorous study on the phenomenon. These analytics fill a central void in

the field of strategy, which has developed an impressive array of tools and frameworks to

compete in red oceans, such as Porter (1980; 1985)‘s five forces for analyzing existing industry

conditions and three generic strategies respectively, but has remained virtually silent on practical

tools to excel in blue oceans (Kim and Mauborgne 2005).

To address this imbalance, the authors highlight that they studied companies around the world

and developed practical methodologies in the quest of blue oceans; they then applied and tested

these tools and frameworks in action by working with companies in their pursuit of blue oceans,

enriching and refining them in the process (p. 24). The tools and frameworks as presented

throughout their award winning book are as follows;



2.6.2.1 The Strategy Canvas

The Strategy Canvas is both a diagnostic and action framework for building a compelling blue

ocean strategy (Kim and Mauborgne 2005). The horizontal axis captures the range of factors that

the industry currently competes on in products, service, and delivery, and what customers receive

from the existing competitive offerings on the market; and the vertical axis captures the offering

level that buyers receive across all these key competing factors. The strategy canvas, according

to the two theorists, serves two purposes:

Firstly, it captures the current state of play in the known market space which allows users

to clearly see the factors that the industry competes on and where the competition

currently invests.

Secondly, it propels users to action by reorienting focus from competitors to alternatives

and from customers to noncustomers of the industry

Fig 2.12 The Strategy Canvas

Source: W. Chan Kim and Renee Mauborgne (2005), Blue Ocean Strategy: How to create


Boston, page 21

The Strategy Canvas is a diagnostic and action focused tool which clearly shows the extent and

potential features of products in an industry as well as the extent and potential competitors

offering such features, as opposed to other conceptual frameworks, inclusive of Porter (1980) `s

five forces model, SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis which are



just diagnostic and practically silent as far as strategy implementation is concerned (Leavy

2005). The value curve, the basic component of the strategy canvas, is a graphic description of a

company‘s relative performance across its industry factors of competition.

In analyzing the practicality of this analytic framework, Kim and Mauborgne (2005) exemplified

the case of Casella wines, where they highlighted that to redraw the strategic profile of the U.S

wine industry to create a blue ocean, the company (Casella winery Inc.) had to reconstruct the

buyer value elements in crafting a new value curve. To achieve this, the company turned to the

second basic analytic underlying the creation of blue oceans; the four actions framework.

2.6.2.2 The Four Actions Framework

Pursuant to reconstructing buyer value elements when crafting a new value curve Kim and

Mauborgne (2005) developed the Four Actions Framework as illustrated and explained below;

Fig 2.13 The Four Actions Framework

Source: W. Chan Kim and Renee, Mauborgne (2005), Blue Ocean Strategy; How to create


Boston, page 29



The Four Actions Framework (illustrated above) as highlighted by the authors, is a strategic

framework useful in reconstructing buyer value elements in crafting a new value curve, resulting

in breaking the trade-off between differentiation and low cost. To break the trade-off between

differentiation and low cost and to create a new value curve, the framework poses four key

questions, shown in the diagram, to challenge an industry‘s strategic logic.

Which of the factors that the industry takes for granted should be eliminated?

Which factors should be reduced well below the industry‘s standard?

Which factors should be raised well above the industry‘s standard?

Which factors should be created that the industry has never offered?

After a decade of empirical investigation and operationalization of this framework, the authors

asserted on good authority that ―rarely do managers systematically set out to eliminate and

reduce their investment in factors that the industry competes on‖ (P. 28). They pointed out that;

this results in nothing less than cost structures and complex business models.

It is in the logic of the framework that, the first two questions (elimination and reduction); entail

efforts by a company to enhance a low cost advantage within and industry. It is by pursuing these

first two questions (of eliminating and reducing) that a company gain insight into how to drop

its cost structure vis-à-vis competitors and the other two questions (raising and creating) fosters

the firm to enrich its differentiation advantage, consequently resulting in value innovation that is

unique and difficult to imitate (Kim and Mauborgne: 2005). Collectively, they allow a firm to

systematically explore how it can reconstruct buyer value elements across alternative industries

to offer buyers an entirely new experience, while simultaneously keeping its cost structure low.

Applying the four actions framework to the strategy canvas of a particular industry, Kim and

Mauborgne (2005) advise that companies can redefine the ground rules governing and

benchmarking a particular industry‘s competition parameters, making competition irrelevant.

Using the Casella wines‘ case, the authors present it that ―instead of offering wine as wine,

Casella created a social drink accessible possibly to a range of all consumers, and brought non

wine drinkers into the wine market. They acted on all the four actions (eliminate, reduce, raise

and create) to unlock uncontested market space that changed the face of the U.S wine industry in

a span of two years (P.31)



As a systematic process, the four actions framework need to be augmented by another similar

complementary framework known as the ERRC Grid (illustrated in fig 2.9.5)

2.6.2.3 The Eliminate-Reduce-Raise-Create Grid

The Eliminate-Reduce-Raise-Create Grid was highlighted by the blue ocean theorists as the

third tool that is key to creation of blue oceans and also as a supplementary analytic to the Four

Actions Framework as illustrated below:

Fig 2.14 The Eliminate-Reduce-Raise-Create Grid

Source: W. Chan Kim and Renee, Mauborgne (2005), Blue Ocean Strategy; How to create


Boston, page 35

Further according to the authors (Kim and Mauborgne: 2005), the Eliminate-Reduce-Raise-

Create Grid (fig 2.14) aids the Four Actions Framework, by advocating companies not only to

ask all four questions in the four actions framework but also to act on all four to create a new

value curve. By driving companies to fill in the grid with the actions of eliminating and reducing

as well as raising and creating, the grid gives companies four immediate benefits;



It pushes them to simultaneously pursue differentiation and low cost to break the value-

cost trade off.

It immediately flags companies that are focused only on raising and creating and thereby

lifting the cost structure and often over engineering products and services – a common

plight in many companies.

It is easily understood by managers at any level, creating a high level of engagement in

its application.

Because completing the grid is a challenging task, it drives companies to robustly

scrutinize every factor the industry competes on, making them discover the range of

implicit assumptions the make unconsciously in competing.

The Eliminate-Reduce-Raise-Create Grid has been tried and tested successfully in practice

particularly for the once alluded Cirque du Soleil proving its robustness as a supplementary

analytic to the Four Actions Framework. Kim and Mauborgne (2005) asserted that in the case of

Cirque du Soleil, it eliminated several factors from traditional circuses, such as animal shows,

star performers, and multiple show arenas – factors that had long been taken for granted in the

traditional circus industry, which never questioned their ongoing relevance.

2.7 FORMULATING BLUE OCEAN STRATEGY

The process of formulating a successful Blue Ocean Strategy is a systematic and sequential

framework rather than a matter of intuition and riverboat gambling. Pursuant to that, Kim and

Mauborgne (2005) postulate it as an aggregate of four of the six principles which will now be

looked at in detail.

2.7.1 Reconstruct Market boundaries

The first and foremost principle, according to Kim and Mauborgne (2005), that acts as the

foundation upon which Blue ocean strategy formulation is built, is reconstruction of market

boundaries. It calls for a reconstructionist view, where attention is shifted from supply to

demand, from focus on competition to focus on value innovation that will move a‘ long corridor‘

in unlocking new demand. With this new focus in mind, it is possible to systematically look

across established boundaries of competition and reconstruct existing.



This principle identifies the paths by which managers can systematically create uncontested

market space across diverse industry domains, hence attenuating search risk. Using a Six Paths

framework, it teaches companies how to make the competition irrelevant by looking across the

six conventional boundaries of competition to open up commercially important blue oceans.

However, the challenge is to successfully identify, out of the haystack of possibilities that exist,

commercially compelling blue ocean opportunities. This challenge is fundamental because

managers cannot afford to be riverboat gamblers betting their strategy on intuition or on a

random drawing (Leavy 2005).

2.7.1.1 The Six Path Framework

The six path framework is the tool that Kim and Mauborgne (2005) highlight as the arsenal to

reconstruction of six conventional market boundaries as depicted in fig 2.15 below

Fig 2.15 The Six Path Framework

Source: W. Chan Kim and Renee Mauborgne (2005), Blue Ocean Strategy: How to create


Boston, page 79

1. Look across alternative industries – and determine what products and services have different

forms but achieve the same purpose. Customers commonly make trade-offs between alternative

industries. The space between these industries may provide some significant opportunities for

value innovation. For example, Net Jets combines the speed and convenience of commercial

airline travel with the low fixed costs of fractional ownership used in other industries.



2. Look across the strategic groups within an industry – and understand which factors determine

the customer‘s decision as to which group they will belong to. By offering the key determining

factors from each group and eliminating everything else, a blue ocean can open up. For example,

Lexus offers the quality of a high-end Mercedes, BMW or Jaguar at a price closer to that of a

Cadillac or a Lincoln.

3. Look across the chain of buyers – and combine their differing definitions of value. Purchasers,

users and influencers will all have different definitions of good value. If you challenge

conventional wisdom about who is the target buyer, blue oceans can open up. For example,

Canon developed small desktop copiers by changing their focus from corporate purchasers to

users who liked the idea of their own personal photocopier at their desk.

4. Look across complementary product and service offerings – and come up with a total solution.

If movie theaters did this, they might create a blue ocean by offering a babysitting service so

people could go to the movies. In just the same way, Barnes & Noble changed their emphasis

from selling books to creating an environment that celebrates reading and learning.

5. Look across functional or emotional appeal – and challenge the orientation of your industry.

Inject some emotional elements into a product which has traditionally been marketed along

functional lines. This is what Swatch has done with impressive results. Or, you might go the

opposite direction. Transform your industry from being emotionally driven to being functional

and no-nonsense. This is what Body Shop has done successfully. At the present time, blue ocean

opportunities are being created in a number of service industries as they move from an emotional

or relationship base to a much more functional orientation.

6. Look across time – and anticipate what will be the result when new technology is taken to its

logical conclusion. Often, the way your industry delivers value is evolving rapidly. Blue ocean

opportunities arise if you work backwards and identify what must be changed today to unlock a

new blue ocean. For example, Apple‘s inspiration for the i-Pod was the success of Napster. It

was clear there was consumer demand and available technology to download music digitally.

Apple provided a legal, simple and cheap way to access music and thereby tapped into a sizeable

blue ocean market.



2.7.2 Focus on the Big Picture, not on Numbers

After market boundaries have been reconstructed, there is need to now focus on the big picture,

rather than on numbers. According to Kim and Mauborgne (2005), every strategic plan ever

written by a corporate planning department starts with a lengthy description of current industry

conditions and the competitive environment, followed by an analysis of how to increase market

share. This evidently elucidates that, the usual corporate planning process is very much Red

Ocean oriented.

To avoid this and do some outside-the-box thinking, managers are advocated to get people to

focus on the big picture rather than letting the numbers confuse them. One way to do this is by

drawing up a company‘s strategy canvas rather than producing a strategic plan.

It is the conviction of these two theorists (Kim and Mauborgne: 2005) that; this principle

addresses planning risk by presenting an alternative to the traditional strategic planning process,

which is often criticized as a number-crunching exercise that keeps companies locked into

making incremental improvements. Using a visualizing approach that drives managers to focus

on the big picture, this principle proposes a four-step planning process for strategies that create

and capture blue ocean opportunities.

2.7.2.1 Visualizing Strategy

Visualizing strategy as propounded by Kim and Mauborgne (2005), can also greatly inform the

dialogue among individual business units and the corporate center in transforming a company

from a red ocean to a blue ocean player. Their suggestion was that when business units present

their strategy canvases to one another, they deepen their understanding of the other businesses in

the corporate portfolio. Moreover, the process also fosters the transfer of strategic best practices

across units. The visualization process was depicted as shown in fig 2.16



Fig 2.16 The Visualization Process

Source: W. Chan Kim and Renee Mauborgne (2005), Blue Ocean Strategy: How to create Uncontested

Market Space and Make the completion irrelevant, Harvard Business School Press, Boston, page 84

Visual awakening – this foundation and prior step, envisions the manager, where the

organization is at current period, envisaging a clear sense of what the enterprise offers in

juxtaposition to the competitor.

Visual exploration – a committed effort to find out the image and standpoint of the

enterprise in the eyes of the market, competitors, suppliers and other critical stakeholders,

using feedback and varied research methods

Visual strategy – this hinges on proactive and foresight stamina of the enterprise

executives in visualizing where the organization could potentially be, using

brainstorming, strategy canvas and the six boundaries of competition framework.

Visual communication – entails thinking about being a pioneer who is migrating and

then settling, and so the need to communicate vision effectively to team members. After

the future strategy is set, the last step is to communicate it in a way that can be easily

understood by any employee

An impressive array of navigation frameworks and tools embedded in the Traditional Portfolio

strategic planning, which are Red Ocean strategy inspired, inclusive of the prominent Boston

Matrix, the General Electric Matrix among others, can be contrasted with Kim and Mauborgne

(2005)‘s Blue Ocean Strategy based equivalent in the navigation of Blue Oceans – the Pioneer –

Migrator – Settler Map (illustrated overleaf).



2.7.2.2 Pioneer-Migrator-Settler (PMS) Map

In an effort to move away from the traditional strategic planning process that has an ultimate

implication of trapping firms in Red Oceans, the Pioneer-Migrator-Settler Map complements

well the strategy canvas and the four steps of visualizing strategy in focusing on the big picture.

Fig 2.17 Pioneer - Migrator - Settler Map

Source: W. Chan Kim and Renee Mauborgne (2005), Blue Ocean Strategy; How to create


Boston, page 98

According to Kim and Mauborgne (2005), a useful exercise for a corporate management team

pursuing profitable growth is to plot the company‘s current and planned portfolios on the

Pioneer-Migrator-Settler (PMS) map. For the purpose of the exercise, settlers are defined as me-

too businesses, migrators are business offerings better than most in the marketplace, and a

company's pioneers are the businesses that offer unprecedented value. These are epitomes of a

company‘s blue ocean strategies, and are the most powerful sources of profitable growth. They

are the only ones with a mass following of customers (p. 96).

If both the current portfolio and the planned offerings consist mainly of settlers, the company has

a low growth trajectory, is largely confined to red oceans, and needs to push for value

innovation. Although the company might be profitable today as its settlers are still making

money, it may well have fallen into the trap of competitive benchmarking, imitation, and intense

price competition (p. 97)



The authors assert that, if current and planned offerings consist of a lot of migrators, reasonable

growth can be expected. But the company is not exploiting its potential for growth, and risks

being marginalized by a company that value-innovates. In our experience the more an industry is

populated by settlers, the greater the opportunity to value-innovate and create a blue ocean of

new market space.

This exercise is especially valuable for managers who want to see beyond today's performance.

Revenue, profitability, market share, and customer satisfaction are all measures of a company's

current position. Contrary to what conventional strategic thinking suggests, those measures

cannot point the way to the future; changes in the environment are too rapid. Today's market

share is a reflection of how well a business has performed historically.

Clearly, what companies should be doing is shifting the balance of their future portfolio toward

pioneers. That is the path to profitable growth. The PMS map above depicts this trajectory,

showing the scatter plot of a company's portfolio of businesses, where the gravity of its current

portfolio of twelve businesses, expressed as twelve dots, shifts from a preponderance of settlers

to a stronger balance of migrators and pioneers (p. 97)

In juxtaposition to the PMS Map as a portfolio planning tool, the Boston Matrix based on the red

ocean strategy is be depicted below;

Fig 2.18 The Boston Matrix


The Boston Matrix (illustrated above) is a classification of products/services into categories

(stars, cash cows, dogs and question marks) to indicate performance and prospects with regards



to market growth rate and market share (Lynch 2009). According to the author, Business

Growth measures the rapidity with which the whole industry is increasing in magnitude, while

Market Share measures the proportion of the market a business unit commands comparative to

competitors.

Having been condemned on the basis of its shortsightedness in assuming that market

attractiveness is denoted by growth rate only and a firm‘s strength likewise, being reflected by

market share, the Boston Matrix was upgraded by the development of the General Electric

Matrix which takes into account issues like market size, pricing flexibility and competitive

structure among other market attractiveness indices; as well as company size, brand position and

profitability margins as some of the company strength determinants. Nevertheless, the two

matrices (BCG and GE) with their strengths combined, concede mediocrity in the face of the

Pioneer-Settler-Migrator Map, mainly on the grounds that the two red ocean based tools, take a

snapshot of current S.B.U performance, neglecting the desired future state of affairs, whereas the

PSM Map looks across time into the future and breaks that boundary to create uncontested

market space.

In light of the above alluded, the PMS Map is comparatively a better portfolio tool, which most

importantly will help a firm to ‗sail‘ from intensely competitive red oceans into Blue Oceans

where competition is jettisoned from the strategic matrix

2.7.3 Reach beyond existing demand

Guided by conventional thinking, the strategic approaches of companies are predictable

typically, to grow their share of a market, companies strive to retain and expand existing

customers through intensive focusing and greater tailoring of offerings to better meet customer

preferences. In a divergent strategic thinking, Kim and Mauborgne (2005) philosophize that, to

create the greatest market of new demand, managers must challenge the conventional practice of

aiming for finer segmentation to better meet existing customer preferences, which often results

increasingly small target markets. They further posit that instead, to address scale risk associated

with creating a new market, there is ordinate importance of aggregating demand, not by focusing

on the differences that separate customers but rather by building on the powerful commonalities

across noncustomers.



A company should be focusing on how to get potential future customers that are not currently

purchasing from the market for one reason or the other. That allows companies to reach beyond

existing demand to unlock a new mass of customers that did not exist before. If a world of

examples can be revealed, Callaway Golf is at the crest on the list. It aggregated new demand for

its offering by looking to non-customers. In contrast, the U.S. golf industry fought to win a

greater share of existing customers, Callaway created a blue ocean of new demand by asking

why sports enthusiasts and people in the country club set had not taken up golf as a sport

(Hamel, 2006)

As much as managers are implored to jettison the traditional approach to marketing strategies

and embrace Blue Ocean based principle of reaching beyond existing demand to capture and

create new demand, pursuant to creating an uncontested market space and make competition,

what seems to remain a mystery for many companies is the insight into the universe of

noncustomers typically offers big blue ocean opportunities (who noncustomers are and how to

unlock them). It is in this regard that, Kim and Mauborgne (2005) eye-opened managers to

deepen their understanding of the universe of noncustomers of which, according to them, there

are three tiers of non-customers that can be transformed into customers as illustrated below;

Fig 2.19 The Three Tiers of Noncustomers

Source: W. Chan Kim and Renee Mauborgne (2005), Blue Ocean Strategy; How to create Uncontested

Market Space and Make the completion irrelevant, Harvard Business School Press, Boston, page 104

According to Kim and Mauborgne (2005), the tiers of customers that can be transformed differ in

their relative distance from a company‘s immediate market.



The first tier of noncustomers is said to be closest to a particular company‘s market, sitting on

the edge of the market, as buyers who minimally purchase an industry‘s offering out of necessity

but are mentally noncustomers of the industry. These customers are asserted in the authors‘

literature, to be waiting to jump ship and leave the industry as soon as the opportunity presents

itself but however, if offered a leap in value, not only would they stay, but also their frequency of

purchases would multiply, unlocking enormous latent demand.

The second tier of noncustomers are presented by the authors as people who refuse to use the

industry‘s offerings, typically buyers who have seen a particular company‘s industry offerings as

an option to fulfill their needs but have voted against them.

The third tier of noncustomers is farthest from a company‘s market, they are noncustomers who

have never thought of that particular market‘s offerings as an option.

The underlying insight in Kim and Mauborgne (2005)‘s three tiers of noncustomers framework

was that; by focusing on key commonalities across these noncustomers and existing customers,

companies can understand how to pull them into their new market and learn jettison conventional

practices like market segmentation and in divergence, take a de-segmentation and market

aggregation approach to map a Blue Ocean around powerful commonalities that are valued by

customers. It is in the convergence of all these angles that the authors assert it on good authority

that; firms will be enabled by this particular framework to increase their catchment and reach

beyond existing demand to unlock a new mass of customers that did not exist before.

2.7.4 Getting the Strategic Sequence Right

Kim and Mauborgne (2005) propose a shift from the ancient strategic planning dimension,

through the fourth principle of blue ocean strategy – getting the strategic sequence right.

This principle describes a sequence that companies should follow to ensure that the business

model they build will be able to produce and maintain profitable growth. When companies

follow sequence of utility, price, cost and adoption requirements, they address business model

risk. The fundamental activity is to look at the buyer utility to make sure the proposed

product/service addresses sufficient levels of utility at every step of the buying process

(purchase, delivery, use, supplements, maintenance and disposal). According to Kriesel (2006),



there are the four fundamental questions to be asked along the utility-price-cost- adoption

requirements:

Utility - Does your business idea offer exceptional utility to the buyer?

Price - Is your price affordable by the mass market of target buyers?

Cost - Will you be able to make a profit selling at that price?

Adoption requirements - Are you addressing all adoption hurdles up front?

The two Blue Ocean theorists illustrate the invaluable importance and pertinence of getting the

strategic sequence right, by considering Philips‘ CD-i, an engineering marvel that failed to offer

people a compelling reason to buy it. According to the authors, the player was promoted as the

―Imagination Machine‖ because of its diverse functions. CD-I was a video machine, music

system, game player, and teaching tool all wrapped into one. Yet it did so many different tasks

that people could not understand how to use it. So even though the CD-i theoretically could do

almost anything, in reality it could do very little. Customers lacked a compelling reason to use it,

and sales never took off. The assumption that bleeding-edge technology is equivalent to

bleeding-edge utility for buyers is more often than not, prone to miscarriage of judgment. Many

scholars, who wrote on value innovation, argue that unless the technology makes buyers‘ lives

dramatically simpler, more convenient, more productive, less risky, or more fun and fashionable,

it will not attract the masses no matter how many awards it wins.



The fourth principle of Blue Ocean Strategy – getting the strategy sequence right is illustrated

below;

Fig 2.20 Sequence of Blue Ocean Strategy

Companies need to build their blue ocean strategy in the sequence of buyer utility, price, cost,

and adoption.

Source: Kim W.C, and Mauborgne R, (2005) Blue Ocean Strategy; How to create Uncontested

Market Space and Make the completion irrelevant, Harvard Business School Press, Boston, page

29

As elucidated in the above pictogram, and according to Kim and Mauborgne (2005), the point of

departure is buyer utility based on the assessment of whether the offering unlocks exceptional

utility as well as whether there is a compelling reason for the mass of people to buy it.



Testing for exceptional utility, according to Kim and Mauborgne (2005), is a systematic exercise

that can be carried out using the Buyer Utility Map (illustrated below) to create a strategic profile

to ensure that the idea passes

Fig 2.21 Buyer Experience Cycle / Buyer Utility Map



121

According to Kim and Mauborgne (2005), the Buyer Utility Map helps to get managers thinking

from the right perspective (demand-side). It outlines all the levers companies can pull to deliver

utility to buyers as well as the different experiences buyers can have of a product or service. This

lets managers identify the full range of utility propositions that a product or service can

potentially offer.

The Buyer Experience Cycle (BEC): A buyer‘s experience can usually be broken into a cycle

of six stages, running more or less sequentially from purchase to disposal. Each stage

encompasses a wide variety of specific experiences.



By locating a new product on one of the 36 spaces of the buyer utility map, managers can clearly

see how the new idea creates a different utility proposition from existing products. In the

authors‘ experience, managers all too often focus on delivering more of the same stage of the

buyer‘s experience. That approach may be reasonable in emerging industries, where there‘s

plenty of room for improving a company‘s utility proposition. But in many existing industries,

this approach is unlikely to produce a market-shaping blue ocean strategy

Kim and Mauborgne (2005) elucidate that, by using the Buyer Utility Map on the first stage of

the Sequence of the Blue Ocean Strategy, managers can ask questions that help ascertain on the

attractiveness of an idea, in terms of which any negative answers means there is no blue ocean

potential to begin with.

It is in the best advice within the authors‘ explanation that after a firm has cleared the

exceptional utility bar, it advance to the second step: setting the right strategic price consonant

with customer perception of value that it will attract the mass of target buyers who have a

compelling ability to pay for the firm‘s offering. According to the scholars, the first two steps

address the revenue side of a company‘s business model; ensuring that the firm creates a leap in

net buyer value, where net buyer value equals the utility buyers receive minus the price they pay

for it.

The third element – cost, is what in Kim and Mauborgne (2005)‘s logic, secures the profit side,

where the key assessment is whether the firm can produce its offering within the targeted cost

and healthy profit margin parameters while its offering, at the strategic price is still easily

accessible to the mass of target buyers. To that end, the authors developed a complementary tool

called the price corridor of the mass (illustrated overleaf) to help managers find the right price

for an irresistible offer, which, by the way, isn‘t necessarily the lower price.



2.7.4.1 The Price Corridor of the Mass

Fig 2.22 The Price Corridor of the Mass



128

According to Kim and Mauborgne (2005)‘s logic, when setting a strategic price for a product or

service, managers must evaluate the trade-offs that buyers consider when making their

purchasing decision, as well as the level of legal and resource protection that will block other

companies from imitating their offering.

To set the strategic price, the two theorists advocate that companies must first identify the price

corridor of the mass – the price range that attracts the mass of target buyers. They further

asserted that, key to determining the strategic price is for managers to understand the price

sensitivities of buyers who will be comparing the new offering with a host of very different-

looking products and services offered outside the group of traditional competitors. Pursuant to

that, they implored managers to consider two categories of products/services that are beyond an



industry‘s boundaries in identifying the price corridor of the mass: products and services that

take different forms but perform the same function; and products/services that have different

forms and functions but serve the same objective.

The next step according to the authors is to determine how high or low the strategic price should

be set within the corridor without inviting imitation from competition. In this regard, a company

must consider two sets of factors: the level of legal and resource protection the new offering has

to block imitation; and secondly the degree to which the company owns some exclusive asset or

core capability that can also block imitation. Along this terrain, it implies that the higher the level

of protection against imitation, the higher the strategic price can be within the price range that

still attracts the mass of target buyers. For example, if the product or service has strong patents

and hard-to-imitate service capabilities one can use upper-boundary strategic pricing to attract

the mass of buyers. On the other hand, if a manager is uncertain about their patent and asset

protection they should consider pricing somewhere in the middle to lower end of the corridor

(Kim and Mauborgne; 2005).

It emerges from the logic that; the cost side of a company‘s business model ensures that it creates

a leap in value for itself in the form of profit (the price of the offering minus the cost of

production) and that, the combination of exceptional utility, strategic pricing, and target costing

that allows companies to achieve value innovation; to the effect that the advocates of blue ocean

strategy spoke of a leap in value for both buyers and companies.

According to Kim and Mauborgne (2005) even an unbeatable business model may not be enough

to guarantee the commercial success of a blue ocean idea. Over and above a brilliant blue ocean

idea and a circumspect strategic sequence aligning, there is need to address adoption hurdles

based on the assessment of what the adoption hurdles in rolling out a company‘s idea are and

whether these have been addressed upfront.

Only when a company successfully addresses adoption hurdles in the beginning to ensure the

successful actualization of its idea, then this is when the authors suggested that the formulation

of blue ocean strategy is complete.



2.8 EXECUTING BLUE OCEAN STRATEGY

2.8.1 Overcoming key organizational hurdles to Strategy Execution

Inherently Strategy formulation are the thoughts that strategic managers ‗talk‘ and

enthusiastically intend to utilize to gain and/or consolidate competitive ground, but

implementation is the difficult ‗walk‘, which need to be integrated into the fabric of the firm -

indoctrinated into the firm‘s practices, people and culture

Once a company has developed a blue ocean strategy with a profitable business model, it must

execute it. Kim and Mauborgne (2005) asserted that, the challenge of execution exists, of course,

for any strategy, positing that companies, like individuals, often have a tough time translating

thought into action whether in red or blue oceans. Nonetheless, compared with red ocean

strategy, blue ocean strategy represents a significant departure from the status quo. It hinges on a

shift from convergence to divergence in value curves at lower costs. That raises the execution

bar. To that end, the authors highlight that knowing how to triumph over challenges is key to

attenuating organizational risk. Thus, the theorists postulated that, to varying degrees, companies

may face all or a subset of the four hurdles diagrammatized below:

Fig 2.23 Four Hurdles to Execution



150



2.8.1.1 The Cognitive Hurdle

Strategy execution with regard to this hurdle, places emphasis on waking employees up to the

need for a strategic shift. Red oceans may not be the paths to future profitable growth, but they

may have served the organization historically and employees have grown comfortable with them,

so other employees may be wondering why rock the boat. Thus, in many turnarounds and

corporate transformations, the hardest battle is simply to make people aware of the need for a

strategic shift and to agree on its causes (Kim and Mauborgne; 2005)

Pursuant to mitigating this hurdle, Kim and Mauborgne (2005) suggested that, to tip the

cognitive hurdle fast, tipping point leaders zoom in on the act of disproportionate influence -

making people see and experience harsh reality firsthand. Tipping point leadership builds on this

insight to inspire a fast change in mindset that is internally driven of people’s own accord.

2.8.1.2 The Resource Hurdle

After people in an organization accept the need for a strategic shift and more or less agree on the

contours of the new strategy, most leaders are faced with the stark reality of limited resources,

and this is conventionally conceived as the greatest challenge, considering the conviction that,

the greater the shift in strategy, the greater the resources needed to execute it. Unfortunately, an

enterprise rarely has the resources it thinks it needs to achieve change.

In Kim and Mauborgne (2005)‘s contrary logic, instead of focusing on getting more resources,

tipping point leaders concentrate on multiplying the value of the resources they have, in terms of

which, there are three factors of disproportionate influence, when it comes to scarce resources,

that executives can leverage to dramatically free resources, on the one hand, and multiply the

value of resources, on the other. These were identified by the authors as hot spots, cold spots,

and horse trading.

Hot spots were identified as activities that have low resource input but high potential

performance gains. In contrast, cold spots being activities that have high resource input but low

performance impact. Kim and Mauborgne (2005) argue that in every organization, hot spots and

cold spots typically abound. Horse trading involves trading one unit‘s excess resources in one

area for another unit‘s excess resources to fill remaining resource gaps. It is the authors‘



conviction that, by learning to use their current resources right, companies often find they can tip

the resource hurdle outright.

2.8.1.3 The Motivational Hurdle

According to Kim and Mauborgne (2005), to reach an organization‘s tipping point and execute

blue ocean strategy, managers must alert employees to the need for a strategic shift and identify

how it can be achieved with limited resources. Their rationale (Kim and Mauborgne) was

premised on the notion that for a new strategy to become a movement, people must not only

recognize what needs to be done, but they must also act on that insight in a sustained and

meaningful way. So the worthy strategic question is how to motivate key players to move fast

and tenaciously to carry out a break from the status quo.

Buried in the traditional strategic thinking which mirrors red ocean strategic philosophy, is the

tendency that, when most business leaders want to break from the status quo and transform their

organizations, they issue grand strategic visions and turn to massive top-down mobilization

initiatives. They act on the assumption that to create massive reactions, proportionate massive

actions are required. But this is often a cumbersome, expensive, and time-consuming process,

given the wide variety of motivational needs in most large companies. And overarching strategic

visions often inspire lip service instead of the intended action (Kim and Mauborgne; 2005).

Again, in Kim and Mauborgne (2005)‘s contrary logic; instead of diffusing change efforts

widely, tipping point leaders follow a reverse course and seek massive concentration. The

authors suggested a focus on three factors of disproportionate influence in motivating employees,

of which they called kingpins, fishbowl management, and atomization.

Zoom in on Kingpins

Kim and Mauborgne (2005) asserted that for strategic change to have real impact,

employees at every level must move en masse. To trigger an epidemic movement of

positive energy, however, leaders should not spread their efforts thin. Rather, they should

concentrate their efforts on kingpins – the key influencers in the organization. These

according to the authors are people inside the organization who are natural leaders, who



are well respected and persuasive, or who have an ability to unlock or block access to key

resources. The two theorists exemplified the phenomenon with kingpins in bowling,

where they highlighted that if you hit them straight on; all the other pins come toppling

down. They further substantiated this notion positing that, act of zooming in on kingpins

frees an organization from tackling everyone, and yet in the end everyone is touched and

changed.

Place Kingpins in a Fishbowl

At the heart of motivating the kingpins in a sustained and meaningful way is to shine a

spotlight on their actions in a repeated and highly visible way. This is what Kim and

Mauborgne (2005) referred to as fishbowl management, where kingpins’ actions and

inaction are made as transparent to others as are fish in a bowl of water. By placing

kingpins in a fishbowl in this way leaders greatly raise the stakes of inaction. Light is

shined on who is lagging behind, and a fair stage is set for rapid change agents to shine

(Pitta; 2008)

Atomize to Get the Organization to Change Itself

The last disproportionate influence factor as propounded by Kim and Mauborgne (2005),

is atomization. Atomization relates to the framing of the strategic challenge and to make

the strategy actionable to all levels — one of the most subtle and sensitive tasks of the

tipping point leader. The authors argued that, unless people believe that the strategic

challenge is attainable, the change is not likely to succeed.



2.8.1.4 The Political Hurdle

Organizational politics is an inescapable reality of corporate and public life. Even if an

organization has reached the tipping point of execution, there exist powerful vested interests that

will resist the impending changes.

According to the vanguards of the radical strategic paradigm, (Kim and Mauborgne; 2005), to

overcome these political forces, tipping point leaders focus on three disproportionate influence

factors: leveraging angels, silencing devils, and getting a consigliere on their top management

team, where Angels are those who have the most to gain from the strategic shift; Devils being

those who have the most to lose from it; and a consigliere being a politically adept but highly

respected insider who knows in advance all the land mines, including who will fight you and

who will support you.

2.8.2 CHALLENGING CONVENTIONAL WISDOM

The conventional theory of organizational change rests on transforming the mass, in such a way

that change efforts are focused on moving the mass, requiring steep resources and long time

frames. In juxtaposition, Tipping point leadership takes a reverse course whereby to change the

mass, it focuses on transforming the extremes: the people; acts; and activities that exercise a

disproportionate influence on performance. By transforming the extremes, tipping point leaders

are able to change the core fast and at low cost to execute their new strategy (Kim and

Mauborgne; 2005).



Fig 2.24 Conventional Wisdom versus Tipping Point Leadership



174

By single-mindedly focusing on points of disproportionate influence, tipping point leadership

helps managers topple the Four Hurdles to Execution quickly and at a low cost by answering the

following questions:

What factors or acts exercise a disproportionately positive influence on breaking the

status quo?

On getting the maximum bang out of each buck of resources?

On motivating key players to aggressively move forward with change?

And on knocking down political roadblocks that often trip up even the best strategies?



2.8.2.1 The Four Pillars of Blue Ocean Leadership

To unleash employees‘ untapped talent and energy, leaders need a strong repertoire of actions,

not just better awareness and empathy. Kim and Mauborgne (2005), explored the four ways in

which blue ocean leadership fundamentally departs from conventional leadership development

approaches and why these differences make a difference to achieving a step change in leadership

strength fast and at low cost.

Table 2.1 The Four Pillars of Blue Ocean Leadership (source: www.docstoc.com (2015))

Conventional Leadership

Development Approaches

Blue Ocean Leadership

Focus on the values, qualities and

behavioral styles that make for good

leadership under the assumption that

these ultimately translate into high

performance.

Focus on what acts and activities leaders need to

undertake to boost their teams‘ motivation and

business results, not on which leaders need to be.

Tend to be quite generic and are often

detached from what organizations stand

for in the eyes of their customers and

the market results their people are

expected to achieve.

Connect leaders’ actions closely to market

realities by having the people who face market

realities define what leadership practices hold them

back and what leadership actions would enable them

to thrive and best serve customers and other key

stakeholders.

Focus mostly on the executive and

senior levels of organizations.

Distribute leadership across all three management

levels because outstanding organizational

performance often comes down to the motivation and

actions of middle and frontline leaders who are in

closer contact with the market.

Invest extra time for leadership practices

added on to people’s regular work.

Pursue high impact leadership acts and activities

at low cost by focusing as much on what leaders

need to eliminate and reduce in what they do as on

what they need to raise and create.



2.8.3 Build Execution into Strategy

A company is neither only the executives, nor is it only middle management, it is rather a

constituency comprised of everyone from the top to the front lines. For this sole reason, it is only

when all the members of an organization are aligned around a strategy and support it, for better

or for worse that a company stands apart as a great and consistent executor (Leavy 2005). Kim

and Mauborgne (2005), postulates that, overcoming the organizational hurdles to strategy

execution is an important step toward that end. It removes the roadblocks that can put a halt to

even the best of strategies.

The principle of building execution into strategy introduces what Kim and Mauborgne (2005)

refer to as the Fair Process to address management risk associated with people‘s attitudes and

behaviors. Because a blue ocean strategy represents a departure from the status quo, fair process

is required to facilitate both strategy making and execution by mobilizing people for the

voluntary cooperation needed for execution. By integrating execution into strategy formulation,

people are motivated to act.

Fair process is the authors‘ managerial expression of procedural justice that builds execution

into strategy by creating people‘s buy-in up front. The authors argue that, when fair process is

exercised in the strategy-making process, people trust that a level playing field exists. This

inspires them to cooperate voluntarily in executing the resulting strategic decisions.

Further, Kim and Mauborgne (2005) opine that voluntary cooperation is more than mechanical

execution, where people do only what it takes to get by. It involves going beyond the call of

duty, wherein individuals exert energy and initiative to the best of their abilities—even

subordinating personal self-interest—to execute resulting strategies

Fig 2.25 presents the causal flow that was observed by the authors among fair process, attitudes,

and behavior.



Fig 2.25 The Fair Process



169

There are three mutually reinforcing elements that define fair process: engagement, explanation,

and clarity of expectation. Whether people are senior executives or shop employees, they all look

to these elements. These were coined in as the three Ε principles of fair process by Kim and

Mauborgne (2005). It should be noteworthy that any subset of the three is insufficient. The three

criteria collectively lead to judgments of fair process.



2.9 THE SUSTAINABILITY AND RENEWAL OF BLUE OCEAN STRATEGY

Creating blue oceans is not a static achievement but a dynamic process. Once a company creates

a blue ocean and its powerful performance consequences are known, sooner or later imitators

appear on the horizon. This raises the concern over how a blue ocean can be fortified and hence,

digs into the question of the sustainability of blue ocean Strategy as a business level strategy.

2.9.1 Barriers to imitation

A well formulated and executed Blue Ocean Strategy has inbuilt operational and cognitive

barriers to imitation. According to Kim and Mauborgne (2005), it is more often than not, that a

blue ocean strategy will go without credible challenge for ten to fifteen years, as was the case of

Cirque du Soleil, South west Airlines, and Bloomberg among others. The authors associate this

sustainability with imitation barriers rooted in Blue Ocean Strategy which are inclusive of the

following:

Value innovation does not make sense to a company‘s conventional logic.

Blue ocean strategy may conflict with other companies‘ brand image.

Natural monopoly: The market often cannot support a second player.

Patents or legal permits block imitation.

High volume leads to rapid cost advantage for the value innovator, discouraging

followers from entering the market.

Network externalities discourage imitation.

Imitation often requires significant political, operational, and cultural changes.

Companies that value-innovate earn brand buzz and a loyal customer following that tends

to shun imitators.

2.9.2 When to value-innovate again

Eventually, however, almost every blue ocean will turn red as imitators try to grab a share of the

blue ocean market. According to Kim and Mauborgne (2005), a company needs to launch

offenses to defend its hard-earned customer base. The authors further assert that as imitation

persists, on the backdrop of an obsessed blue ocean pioneer to hang on to the market share, a

company may fall into the trap of competing and racing to beat the new competition. Over time



the competition, and not the buyer, may come to occupy the center space of a company‘s

strategic thoughts and actions. Along that direction, the authors consequently warn that if a

company stays on this course (of competing and racing to beat the new competition), the basic

shape of its value curves will begin to converge with those of competitors (imitators).

Nonetheless, the authors advise that, when the company‘s value curve still has focus, divergence

and a compelling tagline, the company should resist the temptation to value-innovate again and

instead should focus on lengthening, widening and deepening its economic rent stream through

operational improvements and geographical expansion to achieve economies of scale and market

coverage.

However, as rivalry intensifies and total supply exceeds demand; patents expired; bloody

competition commences and the ocean turns red again; competitors‘ value curves converges with

that of the blue ocean pioneer, the pioneer company need to reach out for another value

innovation to create a new blue ocean.

In light of all the theoretical angles that elucidate a blue ocean‘s obsolescence, it is noteworthy

that, if strategy is conceptualized along Mintzberg (1996)‘s strategy definition as a pattern, the

invariant behavior of pioneering, innovation and creativity becomes the mainstay and the

fundamental source of blue ocean strategy sustainability, lest the strategy becomes just a

temporary maneuver to sidetrack competition in the intermediate term. To that end, continuous

innovation solely sustains blue ocean strategy and qualifies it as a viable business-level strategy

pursuant to sustainability as a test for a winning strategy.


In this chapter, strategy taxonomies, definitions and comparisons have been turned inside-out

with regard to understanding the evolution, nature and effectiveness of blue ocean strategy as a

business level strategy. Beyond understanding and relating different strategy typologies, this

chapter served as a platform for challenging and substantiating existing theory on strategy in

general and to rigorously seek in-depth understanding on the future of strategy – Blue Ocean

Strategy. The next chapter focuses on the methodology that underpinned this study.



CHAPTER 3 RESEARCH MATHODOLOGY

3.0 INTRODUCTION

This section describes the rationale for the application of specific procedures or techniques used

to identify, select and analyze information applied to understanding the research problem,

thereby allowing a critical evaluation of the overall study‘s validity and reliability.

Embedded in this chapter are the choices of research tools and techniques highlighting and

justifying the research design adopted, the sources of data used, data collection techniques

employed, the sampling procedures, the sample size, the sampling techniques adopted as well as

the data presentation and analysis techniques employed pursuant to actualization of research

objectives as is required for an adequately executed research project vis-à-vis bestowed resources

and time constraints

3.1 RESEARCH PHILOSOPHY

The research took form of pragmatism, in terms of which the researcher‘s view of the nature

reality (ontology) is external and chosen to enable answering of the research questions Saunders

et al (2009). The researcher‘s view of what constitute acceptable knowledge (epistemology) is

both observable phenomena and subjective meanings dependent upon each research question.

Focus is put on practical applied research, but as well, integrating different perspectives to help

interpret the data, and the researcher‘s role of values in research (axiology) is that values play a

fundamental role in interpreting data. As such, the researcher adopted both objective and

subjective points of view.

Extremism is prone to be fostered by adopting either one of the positions (Positivism or

interpretivism), in such a way that the researcher might become as myopic as is congruent with

their adopted philosophy (i.e. either positivism or interpretivism), even when the research

objectives are being deviated from. A remedial choice of philosophy hence, became pragmatism

which enabled the researcher to be flexible in combining philosophical stances depending on

each particular research question, as asserted by Saunders et al (2009; 109) that the most

important determinant of the epistemology, ontology and axiology to be adopted by the

researcher is the research question – one may be more appropriate than the other for answering

particular questions.



3.1.1 RESEARCH APPROACH

The study combined both inductive and deductive approaches, in terms of which the researcher

committed time to visit the corporate scene and collect data in person in form of brief interviews

to aid probing and cover up blind spots of questionnaires, which are the primary tools to be used

for data collection, and also the use of literature perspective to interpret data and deduce one of

the hypotheses developed earlier.

There is a wealth of literature on blue ocean strategy framework and its equivalents (combination

strategy/hybrid strategy), which paves an avenue for deducing one of the hypotheses

underpinning the study, so economically and with much ease. Nevertheless, there is a trail of

doubt on the sustainability of Blue Ocean as a perpetual business level strategy, with no or very

little focus hinging precisely on the triad of applicability, viability and sustainability outside the

western business domain; particularly in Zimbabwe. As such, building a theory specifically on

sustainability of the framework in Zimbabwe, would call for inductive approach, ultimately

advocating for a combination of both approaches to actualize the entirety of all the objectives.

3.1.2 RESEARCH PARADIGM

Saunders et al (2009) defined a paradigm as a way of examining social phenomena from which

particular understandings of these phenomena can be gained and explanations attempted.

This research took form of a radical change perspective, where both radical humanist and

radical structuralist dimensions were employed to adopt a critical perspective on organizational

life, primarily concerned with changing the status quo, organizational structural imperatives and

the extent to which these may support or affect strategic choice. There was integration of

subjectivism and objectivism to understand both the implications of social phenomena from the

subjective perspective of participating social actors and the objective role of entity structures and

functions.

Radical change relates to a judgment about the way organizational affairs should be conducted

and suggests ways in which these affairs may be conducted in order to make fundamental

changes to the normal order of things, Sekaran (2000)



3.2 RESEARCH DESIGN

Greener (2008) defines research design as a grand plan of approach to a research topic and set of

advance decisions that make up the master plan, explicitly defining the methods and procedures

for collecting and analyzing the data thereof.

In a fine-tuned version, research design was defined as the overall strategy that constitute the

blue print chosen by the researcher to integrate the different components of the study in a

coherent and logical way thereby ensuring the effective addressing of the research problem, De

Vaus (2001). In that direction, the researcher adopted a two- fold research design combining an

exploratory and descripto-explanatory thrust.

An exploratory research design is the most commonly used to structure informal research that is

undertaken to acquire preliminary information about the general nature of research problems,

whereas descriptive research is undertaken to obtain answers of who, what, where, when and

how, Saunders et al (2007). In further fine-tuning, Saunders et al (2009) asserts that a research

project that utilizes description is likely to be a precursor to explanation and as such, such studies

are known as descripto-explanatory studies.

The exploratory dimension of the design was employed as an endeavor to relevantly capture the

current background information; address the research problem more elaborately; to get initial

insight of the real issues embedded in the Blue Ocean framework; define its related terms, and

chiefly important; propagate the fundamentals of research priorities on this particular genesis of

new business level strategy. Further, the body of objectives in the study was aided and

complemented by a set of research questions inclusive of ―What?‖ and ―How?‖ in terms of

which a descriptive design will elicit answers to those questions.

The profound complementarity impact inherent in the combined two-fold research design

(exploratory and descripto-explanatory), ensured a rigorous, thorough and exhaustive study, that

would yield a high degree of accuracy and consequently a high degree of confidence in the

results.



3.2.1 RESEARCH STRATEGY

Bates (1993), defines research strategy as the plan of the activities that need to be undertaken to

ensure that adequate resources are available to complete the study in the time available, and to

make sure that the approach to the design of the study is the appropriate one to achieve the

study's objectives.

A survey method was employed, where economists, investment analysts and top management of

various entities in the economy are selected based on purposive (judgmental) and quota

sampling. According to Saunders et al (2003) a survey is a common strategy in business and

management research and is most frequently used to answer who, what, where, how much and

how many questions. It therefore tends to be used for exploratory and descriptive research and

usually associated with the deductive approach, often obtained by using a questionnaire

administered to a sample, standardized, to allow easy comparison. Greener (2008) also

highlighted that more often than not, survey results are used to map out a broad view of the

research questions and to provide themes or areas for investigation in more depth through

structured interviews.

A multiple methods approach was instituted, specifically through a mixed-model research,

where a single research study will use quantitative and qualitative techniques and procedures in

combination as well as use primary and secondary data, Saunders et al (2009). In light of time

constraints for the partial submission of the research project for the degree program, a cross-

sectional study was undertaken.



The rationale for using mixed-method designs can be summarized by an aggregate of the

following points;

Facilitation

Use of one data collection method or research strategy to aid research using another data

collection method or research strategy within a study (for instance qualitative/quantitative

providing hypotheses, aiding measurement, quantitative/qualitative participant or case

selection)

Complementarity

Use of two or more research strategies in order that different aspects of an investigation

can be dovetailed (for example, qualitative plus quantitative questionnaire to fill in gaps

quantitative plus qualitative questionnaire for issues, interview for meaning)

Aid interpretation Use of qualitative data to help explain relationships between

quantitative variables (for instance, quantitative/qualitative)

Study different aspects

Quantitative to look at macro aspects and qualitative to look at micro aspects

3.3 DATA SOURCES

In building this study, both primary and secondary data were employed to address the research

questions and realize the research objectives thereof. The rationale for using a combination of the

two data sources was entrenched in the notion that, research questions could be sufficiently

addressed by the complementarity between primary and secondary data.

3.3.1 SECONDARY DATA

Wiid & Diggines (2009), define secondary data as data that already exists, as had been

previously gathered for other purposes, not for the specific study. Such data can be internal or

external to the organization and accessed through the Internet or perusal of recorded or published

data.

Secondary data was collected from available publications on the issues of Porter (1980)‘s generic

strategies, Miles and Snow (1978)‘s adaptive strategies, chiefly Kim and Mauborgne (2005)‘s

Blue Ocean strategy framework and on other strategy issues that were researched upon by

various scholars. Most of the secondary data was extracted from Kim and Mauborgne‘s work on



Blue ocean strategy published in 2005 and subsequent years. For rigor and robustness‘ sake,

other sources of secondary data were consulted, inclusive of:

Other researchers who have written on business level strategies in the process of

academic studies (available in journal articles, and published doctoral theses)

In the process of normal operations (an organization‘s ―grey‖ material-information it

publishes internally such as sales figure, company minutes, company magazines, reports

and newsletters)

The use of secondary data was treated with considerable nobility in this research, reason owing

to the following considerations;

Primary data is usually affected by subjectivity. This phenomenon usually results in

biased results at the end of the study. However, if the research is augmented by use of

secondary data, bias of conclusions is minimized as questionable primary data would be

benchmarked with secondary information available (Hartley; 2005).

The major use of the secondary data was to come up with the background to this study

and to bring to attention the issues that related to business level strategy. Therefore, some

of the research questions that the researcher had were answered by use of secondary data

(for example, the survival and fortification remedies accrual to blue oceans).

Secondary data was ubiquitously at the researcher‘s disposal; hence, it constituted an

economic source of research data (financially and physically in terms of time and effort)

3.3.2 PRIMARY DATA

Primary data refers to data obtained first hand by the researcher on the variables of interest for

the specific purpose of the study (Sekaran 2003). According to Blank, (1984), primary source

material is original and has not been filtered or adapted through condensation, evaluation, or

interpretation by a second or third party. This study used survey method; in terms of which it

gathered primary data through questionnaires that were complemented by follow up interviews

for back up and probing on the short-sights of questionnaires.



Primary data was used as the fundamental base from where most of the deductions and

conclusions were drawn, reason owing mainly to the following considerations that made it more

appropriate:

The research questions which were used as a tool to investigate the sustainability of Blue

Ocean strategy as a business level/ competitive strategy could precisely be addressed

from the platform of the insights generated by primary data.

Use of primary data epitomizes the information solicited from the most authentic,

pertinent and practical business world where practical and tangible experiences can elicit

factual industrial realities on successfully implemented and sustained blue ocean

strategies on the real business scape and as such, would minimize subjective

manipulation of secondary data to come up with pre-determined conclusions to the

research.

The dynamism of the environment within which business is conducted on a daily basis,

poses substantial and fundamental changes to many variables that may affect successful

implementation of strategy and its sustainability hence, the lasting solution to the

obsolescence of secondary data is the use of primary data in research. Primary data gives

inferences to what is actually taking place at the time of research.

Direct investigation conferred the researcher with sufficient control capacity over the

representativeness, precision and consistency of the sample selected, as standardized

questions were set to ensure that similar data can be collected from groups then

interpreted comparatively



3.4 DATA COLLECTION TECHNIQUES

Data collection techniques refer to the methods or tools that were used to gather research data

(Hartley (2005). The researcher expended the collective complementarity of questionnaires and

semi-structured interviews to solicit both qualitative and quantitative data necessary to anchor

the research‘s exploratory and descripto-explanatory dimension.

3.4.1 QUESTIONNAIRE

A questionnaire is a set of questions to which the respondents record their answers, usually

within rather closely-defined alternatives, Sekaran (2000; 233). The data obtained through a

questionnaire is similar to that obtained by an interview, but the questions tend to have less depth

(Burns & Grove 1993:368), being the fundamental reason the researcher had to probe further

from the limited scope covered by questionnaires by means of semi-structured interviews that

were simultaneously conducted complementarily with questionnaire administration.

Questionnaires formed the base and bedrock upon which consistency over the data captured was

constructed, since they were presented in a consistent manner reducing opportunity for bias,

unlike when unstructured interviews were randomly carried out with the potential of non-

uniformity from one respondent to the other; hence, they served as an interview guide. Because

unstructured interviews are more flexible with respondents, but also having their own pitfalls

mainly on the basis of extremity, their weaknesses were neutralized and moderated but the

structure of the questionnaire to become semi-structured.

Over and above providing data, which could be easily quantified and analyzed, a pool of

respondents was able to be administered with relative ease; and economically. Equally crucial is

the fact that they were administered with guaranteed confidentiality and anonymity hence,

respondents felt free to express their opinions and the fact that each questionnaire was filled in

the presents of the researcher, rendered the respondent‘s influence from other respondents

minimal.



3.4.2 SEMI-STRUCTURED INTERVIEW

A semi-structured interview is an alternative between two extremes (structured and

unstructured), where a structured interview is distinguished by a high degree of organization with

standardized questions meant to solicit needed information at the outset, whilst an unstructured

interview is characterized by a more open discussion without a specific sequence of questions

nor pre-determined order, Sekaran (2000) .

Because the researcher wanted to ensure a back-up strategy for questionnaire blind spots, a

questionnaire inspired interview was also employed. The interview was inherently unstructured,

but due to its implicit inheritance of the questionnaire structure it automatically became semi-

structured to follow up the questionnaire, at the same time, giving freedom to participants to

further highlight certain issues that were interesting to them, but beyond the scope of the

questionnaire.

Interviews formed the basis for the exploration of deeper levels of thought, as they conferred the

researcher with the opportunity to probe and get the respondents to reveal inner feelings and

motivations on the study. Also equally important, longitudinal information was gathered from

one respondent at a time, thereby aiding clarity of interpretation and analysis. Moreover, there

was room for flexibility and adaptability in terms of which the researcher could clarify

misunderstood questions or re-phrase questions to solicit the best of responses.

Over and above immediate feedback, interviews fostered superb quality of the responses since

data was also capable of being captured and interpretation being drawn from respondents‘ non-

verbal language, that spiced the solid responses rendered through questionnaires.



3.5 DATA COLLECTION PROCEDURE

The researcher committed time to visit 13 organizations drawn from a pool of 25 platinum

member companies of the Confederation of Zimbabwean Industries (CZI) in an effort to

solicit information from executive managers on their practical experiences with Blue Ocean

strategy framework, its winning side and pitfalls, but mainly whether it could be perpetuated as a

business level strategy. Appointments were sought ethically and a brief comprehensive summary

of what blue ocean strategy is all about; the reason why the researcher was so committed to

investigate on this subject and a guarantee of anonymity and confidentiality were submitted a

week before the questionnaires were disbursed. Questionnaires were then distributed to each

respondent as a precursor to the interview as they were filled in the presence of the researcher

with misunderstood questions being rephrased and clarity being sought when the questionnaire

would have ran out of the capacity to solicit responses further, especially on personal feelings

and value judgment of the respondents usually delivered in a combination of broad statements

and non-verbal language, of which was so valid for analytical purposes of the data. As alluded,

the rationale of delivering the questionnaire in person was to synchronously administer the

questionnaire and conduct the interview at the same time to follow up scope limitation of

questionnaires; gain an abstract level of understanding from the important aspects of nonverbal

language; eliminate the possibility of non-response cases, which usually occur when

questionnaires are delivered to the respondents either by the mail or otherwise without the

persistence of the researcher to influence respondents not to ignore the questionnaire by their

presence. Also a factor of considerable merit was the economic impact of the procedure in saving

travel costs by fusing questionnaire administration and interviews together.

The questionnaire/interview guide went through a rigorous process of refinement, through

numerous pretests to fine-tune it to be as comprehensive and effective as sufficient to solicit the

sought data.

3.5.1 SAMPLE DESIGN

A sample design can be defined as a set of procedures for selecting units from a population, Kirk

(2008). The general population, target population, sample frame, sample size determination and

sampling methods, techniques and procedure formed an integral set that constituted this study‘s

sample design.



3.5.2 GENERAL AND TARGET POPULATION

Kirk (2008) defines a target population as a particular group of people that is identified as the

intended recipient of an investigation, advertisement or campaign. Mainstreaming the attention

to the study, a target population for a survey can be understood as the entire set of units for

which the survey data are to be used to make inferences. Thus, the target population defines

those units for which the findings of the survey are meant to generalize, Lavrakas (2008).

Corporate top executives in all Zimbabwean companies (who are involved in strategic and

business decision making and usually vested with the responsibility of implementing the strategy

blue prints) made up the general population from which the target population emanated. From

the general population, certain individual elements were then targeted since it was not practical,

given the time frame of the study, to gather data from the whole population. Thus, the target

population for this research became corporate executives involved in the organization‘s strategic

decision making in the 25 platinum member companies of the Confederation of Zimbabwean

Industries (CZI), making up the finite set of elements from which the sample was developed.

3.5.3 SAMPLE FRAME

A sampling frame is a complete list of all the cases in the population from which a sample will

be drawn, Saunders et al (2009). It is a list or set of direction that identifies the target population.

Top executives in the list of all platinum member companies of the Confederation of

Zimbabwean Industries (CZI), were eligible as the sample frame from which the sample was

drawn

3.5.4 SAMPLE SIZE DETERMINATION

A sample can be defined as a subset of the population selected to collect data to make an

inference and answer a research question about a population, Anderson (2011). Kirk (2008) `s

formulae for determining the optimal sample size was employed to determine the study sample

size as follows:



n = (

)

Where n = sample size percentage.

= the two-sided standard normal distribution value corresponding to a 95%

confidence coefficient

p = is the guessed value of the population proportion

m = researcher’s acceptable margin of error in estimating the population proportion.

*Assuming a confidence interval of 95%, an acceptable sample error of + 0.07% and an

objectively determined value of 93%, assuming it (that percentage) as representing the

proportion of corporate executives, who know about Blue Ocean Strategy, the sample size was

determined as 51.03% which translates (rounded off ) to 13 respondents.

3.5.5 SAMPLING METHOD AND TECHNIQUE

Non-probability sampling formed the gist of the study, where the chances of selecting members

from the population into the sample were unknown. The researcher employed an aggregate of

two (2) non-probability sampling techniques to choose participants who made up the sample, in

the form of:

3.5.5.1 Quota sampling

Quota sampling is entirely non-random and is normally used for interview surveys and is based

on the premise that the researcher‘s sample will represent the population as the variability in the

sample for various quota variables is the same as that in the population. Quota sampling is

therefore a type of stratified sample in which selection of cases within strata is entirely non-

random (Barnett 1991). Due to the fact that interview surveys were critical data collection

instruments in this study to mitigate blind spots of questionnaires, such as non-participation and

further probing impossibility among others, Quota sampling was employed to select those who

should be interviewed within the sample.



3.5.5.2 Purposive sampling

This is a common non-probability method where the researcher selected the sample based on

judgmental choice over cases that will best enable the answering of research question(s) and to

meet research objectives (Neumann. 2005). As posited by Saunders et al (2003), similarly, Bush

and Burns (2010) highlight that the researcher uses personal judgment to identify those that

should be in the sample. Thus the researcher therefore used purposive or judgmental sampling to

come up with a sample consisting of executive managers in 13 of the twenty-five platinum

member companies of the Confederation of Zimbabwean Industries (CZI), who were in the best

position to provide the required and relevant data based on their expertise in the field of

investigation. Pursuant to the achievement of the best of results, both sub-methods of Purposive

sampling (deviant sampling and maximum variation sampling), was expended.

(i) Deviant sampling (Extreme case)

Focuses on unusual or special cases on the basis that the data collected about these

unusual or extreme outcomes will enable the researcher to learn the most and to

answer research question(s) and to meet research objectives most effectively. This is

often based on the premise that findings from extreme cases will be relevant in

understanding or explaining more typical cases (Patton 2002). There was greater

expectation on the part of the researcher to come across extreme cases during field

work; hence this sub-sampling method of purposive sampling was adopted to screen

cases that were judgmentally extreme to the researcher.

(ii) Maximum variation sampling (Heterogeneous)

Enables the researcher to collect data to describe and explain the key themes that can

be observed. Any patterns that do emerge are likely to be of particular interest and

value and represent the key themes. In addition, the data collected should enable you

to document uniqueness to ensure maximum variation within a sample (Patton 2002).

The reason for the use of this sub-sampling method owes to the heterogeneity of the

respondents targeted (executives, investment analysts and economists), where

differences in area of expertise is likely to motivate differences in opinion as well.

Hence, the key patterns evolving from the opining of different experts will assist to

analyses concepts and deduce a mainstream conclusion.



3.6 DATA PRESENTATION

Curves, bar graphs, continuums, tables and Pie charts were expended as audio-visual aids to

illustrate data more comprehensively and more aesthetically, complementing textual

presentation, to enable the researcher and all possible end users to appreciate, with

disproportionate ease and comprehension, the fruit of hard work undertaken to produce this

master piece of work. The nexus among the various presentation aids and their complementarity

contributed significantly to the total effort in bringing out the practical realities surrounding the

context of study and equally improving the comprehensiveness and the aggregate quality of the

research report.

3.7 DATA ANALYSIS

Clough, (2002) defined Data analysis as the process of systematically applying statistical and/or

logical techniques to describe and illustrate, condense and recap as well as evaluating data.

According to Shamoo and Resuik (2003), various analytical procedures provide a way of

drawing inductive inferences from data and distinguishing the signal (the phenomenon of

interest) from the noise (statistical fluctuations) present in the data. The basic steps in the

analytic process consist of identifying issues, determining the availability of suitable data,

deciding on which methods are appropriate for answering the questions of interest, applying the

methods and evaluating, summarizing and communicating the results (Clough, 2002).

When raw data has been collected, the next step is to process the raw data into information by

analyzing it. Thus Data analysis according to Cooper & Schindler (2008), involves reducing

accumulated data to a manageable size, developing summaries, looking for patterns, and

applying statistical techniques. Both qualitative and quantitative analysis was used in this

research.

For the sake of a rigorous and a thorough study, as well as the need to overlap all the possible

crosscuts in ensuring sufficient levels of data integrity, an aggregate of quantitative and

qualitative analyses formed the gist and mainstream of this research‘s data analysis.



3.7.1 QUANTITATIVE DATA ANALYSIS

Quantitative analysis is used to figure out exactly "what happened, or how often things

happened" (Cooper and Schindler, 2008). Quantitative analysis is used in research by find the

answers to questions that can be measured. This type of analysis answers "questions related to

how much, how often, how many, when, and who." Descriptive analytical tools included

measures of central tendency (mean, median and mode) and measures of dispersion (range and

standard deviation). The use of quantitative data conferred the researcher with invaluable ability

to analyze and draw inferences on quantitative data that was provided during data collection.

3.7.2 QUALITATIVE ANALYSIS

This refers to methods used to analyze unquantifiable non-numeric and immensurable data

collected from the field of research (University of the West of England; 2015). In this research,

qualitative data that was collected from interviews was analyzed using the narrative text and

single isolated statements methods. Based on the interpretivist philosophy, non-verbal part of

responses, opinions, intuitions and personal feelings were analyzed and refined into meaningful

and subjective notions which helped to understanding the future of strategy as a contemporary

arsenal for sustainable business success.

3.8 VALIDITY AND RELIABILITY CONSIDERATIONS

Validity hinges on the issue of authenticity of the cause and effect relationships (internal

validity), and their generalizability to the external environment (external validity). Thus

aggregately, validity on one hand ensures the ability of a scale to measure the intended concept.

Reliability of a measure on the other, indicates the extent to which the measure is without bias

(error free) and hence offers consistent measurement across the various items in the instrument,

(Sekaran; 2000).

This research like any other, has its inherent loopholes emanating from different angles,

nevertheless, the researcher endeavored to seal and plug all possible sources of bias and render

all embedded weakness to the minimal. Chief among weakness of the aggregate findings of this

particular research is the use of questionnaires as the mainstream data collection tools; in light of

their shortcomings in soliciting effective data. Questionnaires have inherent inability to capture

non-verbal responses as well as having a limited probing capacity. For this reason mainly, the



researcher instituted a backup strategy in form of a semi-structured interview that aimed at

ramping the highlighted blind spots inherent in a questionnaire, in order to ensure both Parallel-

Form Reliability and Interim Consistency Reliability, as well as Construct (convergent) Validity.

Some of the statistical analytical tools such as the standard deviation and the median are arbitrary

and theoretical, which lessens their validity in analyzing and interpreting the data to give sound

conclusions. In an effort to mitigate this challenge more concise and practical statistical tools

such as the mean and the mode were used as mainstream apparatus to analyze and interpret data

so as to arrive at concrete conclusions.


A formal systematic approach to research design has an insubstitutable vitality pursuant to

conformance of a research project to the principles of validity and reliability. The research

design decisions form the blue print and a road map that directs the researcher through to the

effective and more elaborate addressing of the research problem.

The chapter outlined the research methodology of the study which encapsulated the research

philosophy, research paradigm, research approach, research design, population, sampling

procedure, research instruments, data collection; presentation and analysis procedures that were

used in carrying out the study, of which were elucidated herein. It divulged and justified the

mixed-method research methodology approach used to obtain answers to the research questions

in chapter one, equally as it justified survey research method as the apt and most contingent to

investigate and ascertain the sustainability of Blue Ocean Strategy framework as a business level

strategy in Zimbabwe. Over and above the outlining the most essential research tools that

facilitated and supported the study, validity and reliability of this research have also been

highlighted.

The following chapter outlines the data presentation and analysis of the research findings



CHAPTER 4 DATA PRESNTATION AND ANALYSIS

4.0 INTRODUCTION

In the previous chapter, focus was invested on issues relating to the design of the study and the

methods employed as well as the data collection techniques that were applied. It is the purpose of

this chapter then, to hinge on the presentation and analysis of the data from the findings which

are premised on set of objectives of the study. Curves, bar graphs, continuums, tables and pie

charts will be employed to present the data, in terms of which the universal currency of both

quantitative and qualitative methods will be utilized to support descriptive and inferential

analyses as well as rational judgments on the data; the ultimate objective being to draw

empirically substantiated conclusions on the research later in this study.

4.1 INTERVIEW RESPONSE RATE ANALYSIS

The 13 scheduled semi-structured interviews were successfully executed translating into an

impressive 100% response rate. The 100% response rate molds concrete beacons of confidence

on the part of the researcher; in as far as the data from which conclusions are going to be drawn

is concerned. The companies interviewed were an aggregate of the following:

Table 4.1 Interview Success Rate Analysis

company No. of scheduled

interviewees

Successful interview

sessions

Interview

success rate

British American Tobacco 1 1 100

O.K Zimbabwe limited 1 1 100

Econet Wireless 1 1 100

C.B.Z Holdings 1 1 100

Delta Corporation 1 1 100

Schweppes 1 1 100

Uniliver 1 1 100

Allied Timbers Ltd 1 1 100

Tel One 1 1 100

Dairibord 1 1 100

Crystal 1 1 100

Green Fuel 1 1 100

Tongaat Hullet 1 1 100

Total 13 13 100

Source: Survey Data Analysis



4.2 DATA PRESENTATION AND ANALYSIS

4.2.1 Sustainability of Blue Ocean Strategy

Question 1(a): Is Blue Ocean Strategy a sustainable business level strategy in Zimbabwe?

This question was designed to open the conversation and to enable respondents to clearly state

their own position in as far as the study was concerned. The major aim was to ascertain whether

according to their expert knowledge and/or their practical experience and interface with the real

business world, they consider the strategy as sustainable or otherwise. Their responses are thus

depicted in the table below

Table 4.2 Descriptive analysis of respondents’ convictions about the sustainability of Blue

Ocean Strategy

Response Frequency percentage Cumulative percentage

Yes 9 69.2 69.2

No 4 30.8 100

Total 13 100


The results from the question indicates that the majority (69.2%) of the research constituency

affirmed that blue ocean strategy can be a sustainable and hence, a wining; business level

strategy in Zimbabwe. This was juxtaposed to the 30.8% that argued negatively about the

sustainability of the strategy in Zimbabwe.

The responses can also be audio-visually elucidated in form of a pie chart as divulged on the next

page



Fig 4.1 Respondents’ opinions on the sustainability of Blue Ocean Strategy


Question (b) followed up to qualify respondents‘ opinion and was answered in continuous prose

on questionnaires and was probed further by the interview. The respondents who affirmed with

the sustainability of blue ocean strategy, raised concern over saturated markets particularly in the

retail business, and highlighted the availability of intellectual human capital in the country

inspired by Zimbabwe‘ high level of literacy. In this regard, respondents were reiterating that

with a pool of talent in the land, sustainable and commercially viable Blue Ocean ideas can be

greatly and continuously emerge.

On the contrary, the minority (30.8%) that argued against the sustainability of blue ocean

strategy, were mainstreaming their arguments along the avenues of the vices of a freefalling

Zimbabwean economy, that is making even conventional business ideas insanitary and

conventional markets inhospitable; then the situation is even lethal and suicidal in

unconventional business practices. Hence, they sought a firm ground to dispel the prospects of

sustaining blue ocean strategy at business level, basing their argumentative stance on an eroded

economy that imports 60% of its raw materials on the backdrop of factories operating below

35% capacity utilization, rendering simultaneous low cost and differentiation detrimentally

difficult if not impossible.

British American Tobacco (BAT) is a living testimony of a sustainable blue ocean strategy in

Zimbabwe. It is a leading company that is successful worldwide, within and outside the

Zimbabwean borders. In a controversial industry they thrive through value innovation buttressed



by responsibility and integrity on the part of business ethics. It contributed to the 69.2% of the

respondents that affirmed with the sustainability of blue ocean strategy. Secondary information

divulges that BAT has led in its industry through:

Continuous delivery of value to customers and shareholders, investing in new markets

and new product categories to ensure a sustainable future.

Investment of more than £480 million in research and development into innovative

tobacco and nicotine products over the last three years.

Creating shared value – the company‘s strategic approach to sustainability (a concept

which Kim and Mauborgne (2005) embraced in the fair process)

The company‘ sustainability agenda hinges on value innovation through the following reduce-

raise-eliminate-create criteria;

Harm reduction – committed to researching, developing and promoting a range of

innovative tobacco and nicotine product to enable adult customers to have a choice of

less risky alternatives to regular cigarettes. (Reducing and eliminating toxicants through

research in cigarette smoke chemistry).

Raising concern over sustainable agriculture and farmer livelihood – benefiting rural

communities and the environment through their extended arm of social responsibility.

Creating a unique corporate behavior – the highest standard of corporate conduct and

transparency, benefiting all the stakeholders.

The company rides on the theme ―unconventional approaches are reaping rewards‖, in terms of

which curing tobacco leaf has since involved the consumption of large quantities of wood fuel,

leading to many companies to sponsor and promote the planting of over 400 million trees

annually. On the contrary, BAT has introduced air and sun cure methods that are less costly and

environment friendly. They also pioneered the use of rice husks instead of environmental

degradation through cutting down of wood for fuel.



4.2.2 Marginal benefits of Blue Ocean Strategy

The respondents were asked their opinion on the benefits and constraints that can be

realized and faced in implementing blue ocean strategy as a business level strategy in

Zimbabwe, to assess the marginal benefits of Blue ocean strategy relative to the cost of

adoption and implementation in the Zimbabwean economic context. An aggregate list of

some of the benefits and constraints were divulged as follows;

Benefits of formulating and implementing Blue Ocean Strategy

First mover advantages – in the form of market leadership; price tagging liberty and

sovereignty; prestige associated with uniqueness, innovation and divergence etcetera.

Sailing free of competition – an element that deepens and widens the stream of

economic rent

Room for vast and radical growth – being the sole provider of a unique product/service

attracts a customer buzz that raises revenue and further investment plights

Supernormal profitability – the price corridor of the mass can be designed with

sufficient pricing sovereignty manipulative enough to create as much economic rent as

possible.

Productive and Distributive efficiency – the challenging nature of blue ocean strategy

fosters high capacity and resource utilization

High performance management process – the fair process stimulates better industrial

relations

High performance leadership process – tipping point leadership spurs operational and

motivational efficiency through coordination of scarce resources

High performance strategic move – value innovation is a game-changing strategic logic

that can define a new business culture in Zimbabwe (i.e. from customers to

noncustomers; from competition to alternatives)

Constraints associated with the implementation of blue ocean strategy in Zimbabwe

Consumer skepticism about new ideas, as inspired by the polarization of the Zimbabwean

market

Economic meltdown currently prevailing in the land.



Unavailability of affordable long-term credit lines to invest in radical and unprecedented

ideas and concepts (the banking culture in Zimbabwe does not encourage

entrepreneurship and as such cannot avail credit opportunities for new and untested ideas

but rather existing and tested ones that are more of red oceans).

Weak legislative and judiciary measures on copyright law (examples were given of the

rampantly pervasive piracy in the media industry)

A synthetic analysis of the responses on benefits and constraints associated with formulating and

implementing blue ocean strategy at business level can prove beyond reasonable doubt, that blue

ocean strategy has a wider gap of marginal benefits comparative to its drawbacks in Zimbabwe,

hence can survive as a winning business level strategy.

4.2.3 Blue Ocean as a winning strategy

When asked to opine on the viability of blue ocean strategy as a competitive strategy in

Zimbabwe in light of the benefits and constrains highlighted in the preceding question,

respondents rated as divulged in the table below:

Table 4.3 Summary of respondents’ assessment of viability of Blue Ocean Strategy

Response Frequency Percentage Cumulative Percentage

Very Viable 3 23 23

Viable 6 46.2 69.2

Not Viable 4 30.8 100

Total 13 100


The results from the survey shows that the same proportion of respondents who affirmed in the

first question, that blue ocean strategy is sustainable in Zimbabwe, is the aggregate of the

affirmative 69.2% that believed blue ocean is viable as a business level strategy in Zimbabwe,

with 23% fully positive that the framework is very viable in this economy. 30.8% remains the

proportion of respondents who were non-affirmative with both viability and sustainability of the

framework, reasons for their negative judgment remaining the aforementioned factors that were

presented earlier.



The above presented data can be relayed more elaborately on a bar chart as shown in fig 4.2

below

Fig 4.2 Viability of Blue Ocean Strategy framework as a business-level strategy in

Zimbabwe


Diagrammatized analysis of the descriptive findings elucidate clearly than the majority of the

research constituency rated blue ocean strategy positively in terms of viability in the

Zimbabwean economic context, with an aggregate of very viable and viable amounting to a

combined 69.2% cements confidence implicit test for a winning strategy embedded in the

question that elicited the above results.

The viability of Blue Ocean Strategy as highlighted by the respondents can be reinforced by

secondary data with the case of CBZ Holdings. The blue ocean created by the alluded company

(Financial Inclusion) has generated disproportionate profits and business opportunity for the

company, proving the viability of blue ocean strategy in the Zimbabwean context (CZI report 14

June, 2014).

The Financial Inclusion Public Policy is the delivery of financial services at affordable costs to

sections of disadvantaged and low income segments of the society, in contrast to financial

exclusion where these services are not available or affordable to less privileged sections of the



society. The availability of banking and payment services to the entire population without

discrimination is the prime objective of the Financial Inclusion Public Policy.

To buttress the blue ocean idea of financial inclusion, CBZ Holdings the game changers in the

financial services sector introduced a great leap in value for customers by launching the

SmartCash – an instant account for those that were previously excluded, enabling customers to:

Make purchases and cash back transfers on any CBZ/Zimswitch point of sale machines.

Access CBZ SmartMoney – a mobile banking platform.

Pay bills and airtime top up (own and third parties cellphone)

A follow-up question asked the respondents to qualify their suggestions on the viability of

blue ocean strategy as a business-level strategy in Zimbabwe, and their explanation

variedly qualified their responses as follows:

The 23% of the research constituency that believed that blue ocean strategy framework is very

viable in Zimbabwe reiterated that natural resource endowment is Zimbabwe‘s strength and

such, the value addition industry is the attention-starved area in the country with the potential of

generating commercially viable blue oceans. The majority of this class (satisfying a 95%

confidence interval and significance level) suggested that instead of exporting raw products and

materials to the world market, Zimbabwean companies can open blue oceans in the secondary

and tertiary industries with examples emerging as nuclear power generation from the uranium

deposits abundantly discovered in Manicaland; diamond polishing and value adding; platinum

and gold refining and ornamenting.

The modal class that rated the framework as ―viable‖, stressed out that companies can embrace a

total value approach to business, whereby they need to look at plying industries behind and

beyond their mainstream industries. This entails looking for business opportunities in the

industries that supply a company with raw materials; those that they are currently within; and

most importantly, the utilization of their residual materials to break away from competition in

their respective mainstream industries and open blue oceans in the unanticipated market spaces.

Illustratively, Allied Timbers (Limited) Zimbabwe‘s managing director exemplified their

company as a potential blue ocean creator, in terms of which they are into mainstream timber



and wood products (including furniture), but they reconstructed their market boundaries and

engaged into bee breeding for exportation with their market virtually all over the universe. As if

not enough, their honey production project raises disproportionately high profits from the wood

hives made out of the mainstream timber and furniture residues.

However, the non-affirmative median class, raised concern over the natural resource endowment

paralleled with unavailability of capital to finance any viable blue ocean idea that may

materialize from the ―ironic‖ resource abundance in Zimbabwe.

Given that every blue ocean tends to turn red at some point, respondents were asked to

opine on how far, can blue ocean strategy thrive as a winning strategy. This question was

designed to ascertain the pliable options available to sustain the strategy, thereby merging

to the body of objectives and the research gist in the form of an investigation into the

sustainability of Blue Ocean Strategy as a business level strategy in Zimbabwe. The

collected data is presented in table 4.4 below;

Table 4.4 Descriptive analysis of the respondents’ opinion on survival of blue ocean

strategy

Response Frequency Percentage Cumulative percentage

Temporarily 2 15.4 15.4

Intermediately 5 38.5 53.9

Sustainably 6 46.1 100

Total 13 100


The analysis displayed in table above shows that 46.1 %, being the modal category of

respondents, ranked blue ocean strategy framework as sustainable; the median category

represented by 38.5%, suggesting that the strategy can only thrive in the intermediate term; while

the remaining 15.4% believing that blue ocean strategy can only thrive temporarily as the blue

ocean will soon turn red.



Fig 4.3 Survival of Blue Ocean strategy in Zimbabwe


Aggregately, the results prove that blue ocean strategy is a sustainable framework as the majority

respondents suggested. The analysis of the results on the particular subject of sustainability can

be aided by the doughnut chart in fig 4.3 above. Secondary data shows that the choice of and

industry within which a company choses to create its blue ocean determines how long the

company plies solo before it turns red. A closer example is that of ZESA Holdings and its ever-

blue ocean, due to inherent structural barriers within the industry to deter new entrants. The

government of Zimbabwe has since licensed seven power companies in October 2013 but up to

now none has managed to raise the necessary capital to venture into competitive races with

ZESA Holdings. By default, ZESA Holdings continues to swim in a blue ocean sustainably,

proving blue ocean strategy sustainable in Zimbabwe.

4.2.4 Comparison of red oceans to blue oceans

Respondents were asked of their judgment on the extent to which there can be noticeable

differences between organizations that compete in red oceans and those that continuously

create blue oceans. Results elicited from this question addressed the objective of comparing

red oceans with blue oceans. The collected data thereof is presented in table 4.5 and curve

on the next page;



Table 4.5 Summary of responses on the extent to which companies that continuously create

blue oceans differ from those that competes in red oceans

Response Frequency percentage Cumulative percentage

To a larger extent 10 76.9 76.9

Not sure 1 7.7 84.6

To a lesser extent 2 15.4 100

total 13 100


Fig 4.4 Extent of difference between blue oceans and red oceans


As elucidated above, there is a high degree of agreement that there is a clear distinction between

saturated markets and uncontested markets. 76.9% of the respondents judged that blue oceans

differ from red oceans to a larger extent; a trivial proportion of 7.7% asserted that it was not sure

as to whether there can be differences, as they qualified during the interview probe, that they are

not sure as to whether in Zimbabwe there can be any blue oceans to begin with. 15.4% represents

respondents who felt that if blue oceans can be created in Zimbabwe, they will offer a difference

to a lesser extent, since market boundaries will just be reconstructed from existing ones, hence

there likely to be more similarities than differences.



In the follow-up question the respondents were asked to highlight some of the likely

noticeable differences between red and blue oceans in a bid to understand the impact of

creating uncontested market spaces and their options of survival. The contrast was thus

given as presented in table below

Table 4.6 Explanatory analysis on the comparison between blue oceans and red oceans

Companies that continuously create blue

oceans

Companies that compete in red oceans

Inherent market leadership Hard-won market leadership

Pricing sovereignty Competition driven pricing

Value based strategic logic Competition inspired strategic logic

Vast and radical growth Gradual yet limited growth

Supernormal profitability (accounting and

economic profits)

Average profits (accounting profits only)

A room for high capacity utilization to

achieve low cost while enjoying a premium

for quality (the process of value innovation)

Capacity underutilization due to an exclusive

choice between low cost and differentiation (or

due to getting stuck in the middle)

No or low expenditure on fighting

competition

Heavy expenditure on competitive maneuvers

Huge goals can be achievable with scarce

resources with competition outside the

strategic matrix

The bigger the goals, the more the resources

needed due to a consistent provision for

competition




4.2.5 Long-term survival and going concern mechanisms

When asked about the ways in which companies can fortify their created blue oceans such

that they don’t turn red in the long run, the following options were highlighted as available

to pioneers of value innovation in their respective industries.

Securing the blue ocean with patents and copyrights

Capitalizing on first mover advantages to raise structures in the particular industry that

will deter easy entrance (quickly developing uneasily imitable competences)

Continuously innovating such that once a company pioneers unique value, market

leadership in that particular industry will be perpetuated.

Renewing the blue ocean after exhausting the hard-earned new demand (further

reconstructing market boundaries and market broadening)

Value-innovating again in continuously variant industries

Reinvesting supernormal profits to lower costs even further to discourage new entrants.

Creating artificial non-substitutability of the unique product/service.

Respondents were asked to reflect their opinion on the assertions that were designed by the

researcher based on the myths circulating about blue ocean strategy framework with the

objective to confirm or dispel them. The assertions thereof were presented as follows;

1. Blue Ocean strategy framework is a temporary strategy

2. Blue Ocean strategy is not applicable in Zimbabwe

3. It is possible to achieve both differentiation and low cost simultaneously

4. Every blue ocean will turn red with time

5. Blue Ocean strategy framework mirrors the future of strategy

The assertions presented above were ranked on a licket scale and the following

presentations shows how the factors were ranked on the particular scale by the

respondents.



Table 4.7 Summary of opinions of common myths around blue ocean strategy

Assertion S D1 D S D2 N S A 1 A S A2 Total

Blue ocean strategy is a temporary strategy

- 6 4 - - 3 13

Blue ocean strategy is not applicable in

Zimbabwe

- 9 - - - 3 1 13

It is possible to achieve both

differentiation and low cost

simultaneously

- 4 - - - 7 2 13

Every blue ocean will turn red with time

- 4 2 1 1 2 3 13

Blue ocean mirrors the future of strategy - - - - - 11 1 13


Key: SD1 Strongly Disagree

D Disagree

SD2 Slightly Disagree

N Neutral

SA1 Slightly Agree

A Agree

SA2 Strongly Agree

The assertions that were used to confirm and/or dispel certain myths around blue ocean strategy

from the experienced constituency (respondents) in as far as the phenomenon is concerned

formed the periphery for analysis and comprehension of the inbuilt strengths and weaknesses of

the framework. The above presentation shows that the majority of respondents rated blue ocean

strategy positively with particular focus to Zimbabwe. However, for a more vivid analysis of the

nature of the framework, the responses to the assertions tabulated above will be, individually

analyzed by aid of diagrams as shown on the next page;



Fig 4.5 Assertion 1


As divulged in fig above, the modal category of 6 respondents translating to 46.2% of the

research constituency dispelled the myth that Blue Ocean Strategy is a temporary strategy. This

reflects a positive opinion on the sustainability of the framework as a business level strategy in

Zimbabwe hence represented by the color blue. The median category comprised of 4 respondents

which translate to 30.8% slightly disagreed with the assertion that blue ocean strategy is a

temporary strategic phenomenon, showing low levels of confidence in the sustainability of the

framework, though they are positive with the particular strategic framework. For this reason, it

was presented in pale blue to analogously reflect the low confidence in the strategy‘s

sustainability in a Zimbabwean context. Lastly, 3 respondents who represent 23% of the sample

frame viewed Blue Ocean Strategy negatively as an unsustainable strategy in Zimbabwe. This

category had a myopic view towards the red ocean approach of doing business hence,

analogously presented in red color.



The next analysis is on the applicability of the Blue Ocean Strategy framework as a business-

level strategy in Zimbabwe.

Fig 4.6 Assertion 2


Again the modal category represented by 69.2% (9 respondents), dismissed the assertion that

Blue Ocean Strategy is not applicable in Zimbabwe. Likewise, this category represents the blue

ocean oriented mindset in the country and as such, was presented in the color Blue. A less

significant proportion of the respondents agreed that blue ocean strategy is inapplicable in the

economy of Zimbabwe basing their argument on the rampant deteriorating economy as at the

time the survey was conducted. It reflects the red ocean risk aversive and skeptic mindset hence,

presented in red. Lastly a trivial proportion of respondents (if tested at a 95% significance level),

vehemently affirmed that the framework is inapplicable in Zimbabwe, on the grounds that the

current economic denudation forcing almost all industries to operate below standard, cannot

allow low cost and differentiation simultaneously.



The following presentation scrutinizes the respondents‘ belief and conviction about the concept

of value innovation.

Fig 4.7 Assertion 3


As elucidated above, the modal category of 7 respondents (53.8%), again, agrees that value

innovation is an achievable concept in Zimbabwean context, entailing that the sustainability of

the framework can hence, be achievable also. The 4 respondents (30.8%) argued that low cost

and differentiation cannot be achieved in Zimbabwe given a myriad of economic vices and

obnoxious investment policies in the country. Nonetheless, a minority category representing

15.4% of the respondent constituency (2) vehemently supported the achievability of value

innovation, cementing and reinforcing the positive mindset towards blue ocean strategy in the

country. Aggregately, the mainstream results from the findings converges with the literature that

value can be achieved at low cost as suggested by Deming (1986) which was buttressed by Kim

and Mauborgne (2005)‘s concept of value innovation.

The next analysis seeks to deduce the overall and mainstream theme of the study – sustainability.

Pursuant to that, the opinion of respondents on whether blue oceans can be fortified to sustain

them in the long term.



Fig 4.8 Assertion 4


An aggregate of 46.2% of the respondents (30.8% disagree + 15.4% slightly disagree) dismissed

the myth that every blue ocean will turn red in the long run in juxtaposition to the sum of 38% of

the pessimistic respondents (23% strongly agree +15.4% agree), who opined that every blue

ocean will turn red with time, cementing on their earlier conviction that blue ocean strategy is a

temporary endeavor to sidetrack competition not a surviving strategy especially in Zimbabwe. In

light of this see-saw tipping in favor of the survival of blue ocean strategy, the sustainability of

the framework proves to be inevitable. The universal view by some of the respondents is even

substantiated by Kim and Mauborgne (2005) admittance that eventually the once blue ocean will

turn red. However the authors proffer extensional options that would ensure perpetuation of blue

ocean strategy.

Ultimately, the last assertion dignified blue ocean strategy as the promising future of strategy and

the presented data below aids analysis of how the research constituency disputed or affirmed

with this aposteri-ori and defacto assertion.



Fig 4.9 Assertion 5


It is vividly reflective that 85% of the respondents agreed that blue ocean is the mainstay of

future strategic logic, cemented by the vehement 15 % that strongly subscribe to the notion that

blue ocean strategy defines the future strategic paradigm, aggregating to an impressive 100%

consensus on the promising potential of the radical strategic logic. The agreement was above

even the essential 95% confidence interval, thereby reinforcing the researcher‘s confidence in the

robustness of the framework.

The researcher asked respondents to describe Blue Ocean Strategy as a business-level

strategy in Zimbabwe on an ordinal licket scale. This was done in a bid to recheck the

consistency of the responses from earlier questions up to the near end of the survey. The

results of how respondents described the new strategic framework (Blue Ocean Strategy) is

presented by means of six continuums and analyzed thereof.



Fig 4.10 Analysis of respondents’ description of Blue Ocean Strategy

Ineffective Effective

Inefficient Efficient

Weak Robust

Mediocre Superior

Inconsistent Consistent

Mortal Perpetual


Aggregately, the respondents described blue ocean strategy positively, with a more than 90%

confidence interval skewed towards efficiency; effectiveness; robustness and superiority.

Nevertheless, the issue of consistency and survival in the long term (sustainability) were

described as fairly and averagely positive as the mean suggest a slightly above average rating of

the framework. The data presented on the continuums above shows that the positive descriptions

reinforce and consistently cements the earlier responses and opinions that blue ocean strategy is

both applicable and sustainable in Zimbabwe. Over and above sustainability and applicability,

the impressive consensus on the fact that blue ocean is the future of strategy inspired the positive

descriptions and qualifies it to be the ‗must be‘ new business culture in Zimbabwe.



The above solicited insights on the fortification of a blue ocean provide the source of blue ocean

strategy sustainability from empirical evidence. In the light of a myriad of the above listed

fortification options, the sustainability of the framework can now be undoubtedly confirmed

inevitably.

Ultimately the respondents were asked of the most important aspects necessary to sustain

blue ocean strategy as a business level strategy. this was asked as an interesting question to

recap and motivate review of responses given to refine or add left out crucial information,

otherwise all the objectives of this study have had been addressed as far as primary data is

concerned. To that end, suggested responses were very crucial for future studies that may

be carried along the avenues of this study. Some of the suggestions were inclusive of the

following;

Walking the talk in as far as implementation is concerned

Embracing and permeating the culture of innovation and entrepreneurship in Zimbabwe

Revolutionizing the financial sector to think in other terms and support blue ocean ideas

rather than encouraging and financing existing and proven concepts.


In this chapter the researcher presented and analyzed both collected primary and secondary data

concurrently. Interesting trends emerged in this chapter as controversial views and opinions

where presented and analyzed using various techniques alluded in the previous chapter. The next

chapter dwells on reviewing the study objectives; summarizing the findings; drawing

conclusions; making apt recommendations as well as mapping trails for future studies.



CHAPTER 5 SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

5.0 INTRODUCTION

It is the purpose of this chapter to give a detailed summary of findings with the motive to induce

and deduce with empirical evidence, the guided conclusions, as inspired by the findings,

recommendations anchored on the surface of findings. This chapter will also serve as a pointer

stick to knowledge gaps that form sources of future research endeavors.

5.1 RECAP OF THE OBJECTIVES

A set of finite objectives was developed in chapter 1, and have since served as the reference map

and navigation compass throughout this study. A review of the research objectives is hereby

done as follows;

To assess the sustainability of the Blue Ocean Strategy framework in Zimbabwe as a

business-level strategy

To assess the marginal benefits of Blue ocean strategy relative to the cost of adoption and

implementation in the Zimbabwean economic context

To establish whether Blue Ocean Strategy is a winning strategy in practice

To compare red oceans (conventional and existing, market space) to blue oceans


To establish the long-term survival and going concern mechanisms for blue ocean

strategy



5.2 SUMMARY OF FINDINGS

The aim of this study from the onset has been to investigate the sustainability of Blue Ocean

Strategy framework as a business level strategy particularly in Zimbabwe. To that end, the

findings based on the presentation and analysis of data in the preceding chapter, are to be

abridged herein.

5.2.1 Sustainability of the blue ocean strategy framework as a business-level strategy

The research findings elicited a very significant proportion of the research constituency that

believed that due to a haystack of untapped industries that can proffer commercially viable blue

oceans; coupled with a highly learned people of Zimbabwe, blue ocean strategy is sustainable.

On the contrary, a trickle of the respondents believed that the framework may be sustainable but

not in Zimbabwe, citing effects of an eroded and denuded economy that is adverse to risk taking

in the form of committing resources to untested concepts.

In the light of secondary data, eliciting practical examples of living blue oceans in Zimbabwe,

blue ocean strategy is sustainable beyond reasonable doubt. Also considering a myriad of the

highlighted inherent strengths of the framework vis-à-vis a trickle of inbuilt weaknesses, its

sustainability is inevitable.

In table 4.4 in the previous chapter, the modal/majority view was that blue ocean strategy can

thrive sustainably though there are possibilities of blue oceans turning red with time. This

positively contribute to the overall investigation on the sustainability of the framework, though a

considerably significant proportion of the sample showed skepticism and less confidence in the

sustainability of blue ocean strategy, insolubilizing the level of confidence with which the

conclusion can be drawn.

Buttressing the positive response on the sustainability of the framework is the analysis of the

responses to the assertion that Blue Ocean Strategy is a temporary strategy, which was dismissed

by the majority respondents. Though some respondents slightly disagreed with the assertion, at

least they contributed to a positive mindset that blue ocean strategy is not a temporary strategy in

their faint optimism with the survival of the framework, which aggregates to the overall positive

mindset towards the sustainability the new strategic paradigm.



Responses to Assertion 4 show that the majority disputed the claim that every blue ocean will

turn red in the long run; solidifying the conviction that Blue Ocean Strategy framework is

sustainable. Also on the continuum, a significant proportion of the research constituency rated

the framework as surviving considerably, in the long term.

The myriad of options on blue ocean fortification and survival reinforces the framework as its

source of sustainability. These survival options were aggregately given as follows;


Capitalizing on first mover advantages to raise structures in the particular industry that

will deter easy entrance (quickly developing uneasily imitable competences)






Reinvesting supernormal profits to lower costs even further to discourage new entrants.


It is hence, from all these angles of optimism and confidence that was envisaged by empirical

investigation and the corroborative secondary data that, the sustainability of blue ocean strategy

as a business-level strategy in Zimbabwe is substantiated beyond any shadow of reasonable

doubt.

5.2.2 Viability of blue ocean strategy as a business-level strategy

The results from the survey shows that the same proportion of respondents who affirmed in the

first question, that blue ocean strategy is sustainable in Zimbabwe, is the aggregate of the

affirmative to the belief that blue ocean is viable as a business level strategy in Zimbabwe, with a

few fully positive that the framework is very viable in this economy. A less significant number

remains the proportion of respondents who were non-affirmative with both viability and

sustainability of the framework, reasons for their negative judgment remaining at the heart of

economic constrains.



Nevertheless, the majority impressively signifies the viability of the framework, especially when

cemented by the outweighing inbuilt strengths of the strategic framework over its inherent

weaknesses, highlighted as follows;

Benefits of formulating and implementing Blue Ocean Strategy

First mover advantages – in the form of market leadership; price tagging liberty and

sovereignty; prestige associated with uniqueness, innovation and divergence etcetera.

Sailing free of competition – an element that deepens and widens the stream of

economic rent

Room for vast and radical growth – being the sole provider of a unique product/service

attracts a customer buzz that raises revenue and further investment plights

Supernormal profitability – the price corridor of the mass can be designed with

sufficient pricing sovereignty manipulative enough to create as much economic rent as

possible.

Productive and Distributive efficiency – the challenging nature of blue ocean strategy

fosters high capacity and resource utilization

High performance management process – the fair process stimulates better industrial

relations

High performance leadership process – tipping point leadership spurs operational and

motivational efficiency through coordination of scarce resources

High performance strategic move – value innovation is a game-changing strategic logic

that can define a new business culture in Zimbabwe (i.e. from customers to

noncustomers; from competition to alternatives)

Constraints associated with the implementation of blue ocean strategy in Zimbabwe

Consumer skepticism about new ideas, as inspired by the polarization of the Zimbabwean

market

Economic meltdown currently prevailing in the land.

Unavailability of affordable long-term credit lines to invest in radical and unprecedented

ideas and concepts (the banking culture in Zimbabwe does not encourage



entrepreneurship and as such cannot avail credit opportunities for new and untested ideas

but rather existing and tested ones that are more of red oceans).

Weak legislative and judiciary measures on copyright law (examples were given of the

rampantly pervasive piracy in the media industry)

Also, the highlighted noticeable and comparable differences between saturated markets and new

markets of uncontested space, favorable factors were attributed to blue oceans than red oceans

which have a pertinent bearing over the viability of business in new markets of uncontested

space. The descriptions of blue ocean strategy as analyzed on continuums rated the framework

extremely positive, entailing its undoubted viability with respect to Zimbabwe.

All avenues of viability were plied in the interest of investigating the sustainability of blue ocean

strategy framework, as it was to the researcher‘s conviction that viability is an input element to

sustainability. Synchronously, the concept of viability was used to address the second objective

(To establish whether Blue Ocean Strategy is a winning strategy in practice). Pursuant to that

objective, it was established at a sufficient confidence interval, that Blue Ocean Strategy is a

winning strategy in practice and chiefly important, particularly in Zimbabwe.

5.2.3 Marginal benefits of Blue ocean strategy relative to the cost of adoption and

implementation in the Zimbabwean economic context

The balance tilted heavily in favor of the benefits of adopting and implementing blue ocean

strategy comparative to the demerits thereof. An aggregate of eight vividly highlighted benefits

versus four insignificant challenges qualifies the strategic framework to be a winning and

sustainable business level strategy in Zimbabwe.



5.2.4 Comparison of red oceans (conventional and existing, market space) to blue oceans


The juxtaposition of blue oceans to red oceans vividly and literally shook red ocean mindsets out

of the twenty first century strategic picture. Based on the comparison of blue oceans to red

oceans, Blue Ocean Strategy was described as a value-based strategic logic, characterized by

inherent market leadership that confers a company with pricing sovereignty; supernormal

profitability (accounting and economic profits); a room for high capacity utilization to achieve

low cost while enjoying a premium for quality (the process of value innovation); vast and radical

growth. Beyond conferring the alluded merits, the framework was also identified as an economic

efficiency driver as its strategic logic ensures no or low expenditure on fighting competition, and

also chiefly important is the fact that huge goals can be achievable with scarce resources with

competition outside the strategic matrix

Contrastively, the red ocean approach to strategy was perceived as a competition-inspired

strategic logic, characterized by hard-won market leadership (if ever achievable), that pressurizes

a company to adopt competition-driven pricing and at least enjoy average profits; gradual yet

limited growth; capacity underutilization due to an exclusive choice between low cost and

differentiation (or due to getting stuck in the middle), among others. Further to that, the strategic

logic poses heavy expenditure on competitive maneuvers and consequently, the bigger the goals,

the more the resources needed due to a consistent provision for competition.



5.2.5 Long-term survival and going concern mechanisms for blue ocean strategy

This is the gist and mainstream theme of this study as it envisaged a great deal of sources of blue

ocean strategy survival. To that end, a list of mechanisms available for the fortification and

survival of the strategy was benevolently outstretched as follows.


Capitalizing on first mover advantages to raise structures in the particular industry

that will deter easy entrance (quickly developing uneasily imitable competences)






Reinvesting supernormal profits to lower costs even further to discourage new

entrants.


In light of the highlighted pool of survival options, it can be substantiated with sufficient levels

of empirical authority and confidence, that Blue Ocean Strategy is a sustainable business-level

strategy which should feel the center space of the Zimbabwean business culture. Hence, reject H0

and uphold the alternative hypothesis that: “Blue Ocean Strategy framework is a sustainable

business-level strategy in Zimbabwe”



5.3 CONCLUSIONS

Employing a triad of research findings; secondary data and otherwise, the researcher‘s own value

judgment, the researcher is vehemently, confidently and objectively empowered to conclude that

Blue Ocean Strategy framework as conceptualized and propounded by Kim and Mauborgne

(2005), is a robust and circumspect strategic framework, hence a sustainable strategic logic as a

business-level strategy in Zimbabwe.

All sample companies that constitute the platinum membership of the Confederation of

Zimbabwean Industries (CZI), have proved to be the top performing and most successful in

Zimbabwe as at the time of this study. This noted trend is chiefly because they all have elements

of blue ocean strategy in their strategic matrices with CBZ Holdings, British American Tobacco

(BAT) limited, Allied Timbers (Pvt.) Ltd and Tel One, to mention only just a few, topping the

list on embracing the radical strategic dimension as their redefined source of competitiveness in

their respective domains.

However, the nature of industry confers blue ocean opportunities variantly and depending on the

complexity of the particular industry‘s structure. Other industries such as power generation and

mineral value-adding have inherent highly repulsive structures such that perpetuation of once

created blue ocean prospects, is guaranteed. On the flipside, any efforts to value-innovate and

create blue ocean concepts in the retail sector, is a short-lived strategic maneuver as the

structures of this particular industry are very difficult if not impossible, to erect barriers that deter

imitation. As such, the sustainability of Blue Ocean Strategy in this particular industry, rides

heavily on continuous innovation and pioneering of unique value for customers, where a time-

based business model will be appropriate, lest a company have to continue swimming

aggressively and competitively after obsolescence of blue ocean prospects, to outperform others

raising the propensity to get trapped in red oceans of cutthroat competition which Kim and

Mauborgne (2005) referred to as analogous of bloody shark-infested waters.



5.4 RECOMMENDATIONS

Based on the research findings and personal insight, the researcher benevolently proffers

passionate recommendations on how to successfully revolutionize the Zimbabwean business

culture and permeate a new generation business philosophy in the land.

The first and foremost recommendation finds is direction towards the legislative system in

Zimbabwe, to redress the copyright law and ensure its high effectiveness in protecting

intellectual and novelty property to advocate and incentivize the culture of creativity and

innovation, otherwise a haystack of blue ocean ideas can revive, resuscitate and revamp the

economic situation rampantly deteriorating by the day.

It is also a heart-felt need to recommend Zimbabwean companies to jettison the traditional

strategic notion of thinking that the greater the leap forward needed, the greater the physical

quantity of resources required. Instead, they should embrace tipping point leadership at the heart

of all their strategic endeavors and focusing on the bigger picture rather than numbers. With the

levels of learnedness in Zimbabwe, we are half way towards revolutionizing the business culture

in the country, and this can only be actualized if companies can utilize simultaneous pursuance

of low cost and quality to improve capacity utilization and rebuild the currently freefalling and

crumbling down economy.

Other strategists should rigorously and empirically test Blue ocean strategy from all angles in

Zimbabwe, such that it can be practically refined beyond where Kim and Mauborgne (2005) left

it. This would call for commitment to study companies practically and successfully embracing

the strategic framework, in an effort to fine-tune and refine it, apart from just reading and

meditating Kim and Mauborgne (2005)‘s book

To achieve simultaneous low cost and great value, managers should buttress Blue Ocean

Strategy with other contemporary value-oriented concepts like the Total Quality Management

(TQM) and other cost efficient concepts like the Just In Time philosophy (JIT). Otherwise, no

matter how brilliant and robust, Blue Ocean Strategy may be, it cannot survive solo in isolation

of other contemporary strategic pillars and building blocks.

Like any other strategy, Blue Ocean Strategy is not exceptional to the best practices of strategy

implementation, otherwise, as good a strategy it is, it can also be vulnerable to succumb to



failure if managers miss the indispensible requirement for the best practice in strategy

implementation.

Lastly but obviously not the least, this recommendation is specifically direct to the financial

sector in Zimbabwe to take a lead and spur the entrepreneurial culture in the country by

developing keen interest to radical unconventional business ideas as opposed to the traditional

culture of risk aversion and skepticism about change; whereby sources of finance are availed to

conventionally tested and existing business endeavors shunning the potential for blue ocean

pioneering.

5.5 TRAIL FOR FUTURE STUDIES

This study focused on the sustainability of Blue Ocean Strategy as a business-level strategy with

particular focus on Zimbabwe, in terms of which a superficial analysis of the framework as a

business model in Zimbabwe was the least possible due to time constraints and other resource

hurdles which confronted the researcher. To that end the researcher wishes to guide future

research on Blue Ocean Strategy, along the triad of applicability, viability and sustainability of a

business model pivoted this new strategic paradigm.

5.6 CONCLUDING REMARKS

It has been substantiated by research findings and the researcher‘s own value judgment that blue

ocean strategy is a sustainable strategic logic and business-level strategy in Zimbabwe,

empowering the research with the audacity to conclude that Blue Ocean Strategy is the dawn,

mainstay and definition of the future of strategy. Recommendations were proffered based on the

congruency of literature and research findings, and it is in the best hope of the researcher that

should the Zimbabwean business community choose to rise on their feet and join hands as

implicitly emphasized in the recommendations, we will complete the half step left to change the

world!



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www.biztaxlaw.about.com

www.blueoceanstrategy.com.

www.docstoc.com.

P

http://www.biztaxlaw.about.com/

http://www.blueoceanstrategy.com/

http://www.docstoc.com/



APPENDICES

APPENDIX 1: QUESTIONNAIRE/INTERVIEW GUIDE

Dear respondent

This questionnaire is used as an aid to data collection for a research project on Blue Ocean strategy, to

be submitted in partial fulfilment of the Bachelor of Commerce Honours Degree in Management

currently being studied at the above alluded institution.

The target respondent is so crucial in the determination of the success of this particular study as they

have the technical expertise and sufficient levels of experience as well as direct and practical interface

with the phenomenon the researcher wishes to investigate. The success of this study will be a stepping

stone in revolutionizing the business world, and permeate a new generation business culture in

Zimbabwe. The respondent is free to express their views and opinions with guaranteed confidentiality,

as all the information that shall be provided herein shall be used purely and wholly for academic

purposes, in terms of which no harm or prejudice shall befall on the part of the respondent as a result of

their contribution to this study.

Should any issues arise, directly or indirectly emanating from this study, please feel free to contact the

researcher on the contact given below. Your contribution is half the step towards changing the world,

together we will get there!

Thank you in advance!!!

Tendai Moyo (P0114310F)

0779371295

1. (a) Is Blue Ocean Strategy a sustainable business level strategy in Zimbabwe?

YES NO



(b) Why would you say so?

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2. (a) In your opinion, what may be some of the benefits and constraints that can be realized in implementing Blue Ocean Strategy as a business level strategy in Zimbabwe?

Benefits………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...

Constraints

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(b) In light of the benefits and constraints you have highlighted in 2(a) above, how do you view the

viability of Blue Ocean strategy as a business level/competitive strategy in Zimbabwe?

Not Viable Viable Very Viable

(c) Can you qualify your response to (b) above

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3. Given that a Blue Ocean tends to turn red at some point, how far can Blue Ocean strategy thrive

as a winning strategy?

Temporarily Intermediately Sustainably



4. (a) To what extent can there be any noticeable differences between organizations that compete in

red oceans and those that continuously create blue oceans

To a lesser extent Not sure To a larger extent

(b) What may be some of these differences?

Red Oceans Blue Oceans

5. In each case choose a rating that best reflect your opinion and place it in front of the assertions 1 to 5.

Strongly Disagree

Disagree Slightly Disagree

Neutral Slightly Agree

Agree Strongly Agree

1 2 3 4 5 6 7

1 Blue ocean strategy is a temporary strategy

2 Blue ocean strategy is not applicable in Zimbabwe

3 It is possible to achieve both differentiation and low cost simultaneously

4 Every blue ocean will turn red with time

5 Blue ocean mirrors the future of strategy

6. How can you best describe Blue Ocean strategy as a business level strategy in Zimbabwe?

+2 represent the highest positive description, 0 represent Neutral value and -2 represent the

highest negative description. In each case encircle the number that reflects your opinion.

ineffective -2 -1 0 +1 +2 effective

inefficient -2 -1 0 +1 +2 Efficient weak -2 -1 0 +1 +2 Robust Mediocre -2 -1 0 +1 +2 Superior Inconsistent -2 -1 0 +1 +2 Consistent mortal -2 -1 0 +1 +2 Perpetual

7. How can blue oceans be fortified so that they don’t turn red in the long run?

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8. What are the most important aspects necessary to sustain blue ocean strategy as a business

levelstrategy…………………………………………………………………………………………………………………………………

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It would never have been the same without your contribution! Once again, thank you!

MAY GOD BLESS YOU!



APPENDIX 2: FORMULAE EMPLOYED BY THE RESEARCHER

n = (

)

Where n = sample size percentage.

= the two-sided standard normal distribution value corresponding to a 95%

confidence coefficient

p = is the guessed value of the population proportion

m = researcher’s acceptable margin of error in estimating the population proportion.

final draft-blue ocean strategy project

Documents