Glossary
The book's terms
The words the book uses, each one explained here so that no other page has to stop and explain it.
Core concepts
Red ocean / blue ocean. A red ocean is an existing, crowded market where companies compete head to head on the same known things.
The rest of it, and where it comes from
A blue ocean is space nobody is fighting over, opened by creating value that makes the competition beside the point.
blueoceanstrategy.com and Kim & Mauborgne, Blue Ocean Strategy, 2005.
Value innovation. Being different and being cheap at the same time, rather than treating them as a trade-off. A move only counts if it does both.
Where it comes from
blueoceanstrategy.com.
Strategy canvas. One picture of a whole market. Along the bottom, the things the industry competes on and spends money on. Up the side, how much of each thing a buyer actually receives.
The rest of it, and where it comes from
Every rival gets a line on the same picture.
Drawing your own line against the incumbents' shows where everyone is the same and where you genuinely diverge. blueoceanstrategy.com.
Four Actions Framework (Eliminate, Reduce, Raise, Create). Four questions that break the choice between being different and being cheap. Which things the industry takes for granted should be eliminated? Which reduced well below its standard?
The rest of it, and where it comes from
Which raised well above it? And which created that nobody has ever offered?
Eliminate and Reduce drive the cost side; Raise and Create drive the differentiation side. The ERRC grid is the same four questions as a fill-in table, which forces an answer to all four rather than only the comfortable two. blueoceanstrategy.com.
Focus, divergence, compelling tagline. The three tests of a finished strategy, read straight off the picture. It concentrates on a limited set of things. Its shape stands apart from everyone else's.
The rest of it, and where it comes from
And it can be said in one short, honest line that speaks to buyers.
These are tests of what comes out, not instructions for how to get there. Kim & Mauborgne via official materials.
Reconstructing boundaries
Six Paths Framework. Six systematic ways of looking across an industry's own boundaries rather than within them: at alternative industries, at the groups inside the industry, at the chain of buyers, at everything complementary to the product, at the industry's basis of appeal, and across time.
Where it comes from
blueoceanstrategy.com/tools/six-paths-framework.
Substitute vs alternative (Path 1). A substitute has a different form but does the same job: accounting software instead of an accountant.
The rest of it, and where it comes from
An alternative has a different form and a different job, but serves the same underlying purpose: a cinema instead of a restaurant, when what you wanted was an evening out.
Path 1 works by finding the few things that make buyers cross from one to the other, building on those, and eliminating or reducing everything else. Kim & Mauborgne, Path 1 chapter, cross-checked against secondary sources.
Strategic groups (Path 2). Groups of companies inside one industry all doing roughly the same thing, usually rankable on price and performance.
The rest of it, and where it comes from
Path 2 asks why buyers trade up or down between them, then takes the deciding advantage of both and drops the rest.
Kim & Mauborgne via official materials.
Chain of buyers (Path 3). The purchase decision usually runs through several people: the users, the purchasers who pay, and sometimes the influencers whose opinion sways it.
The rest of it, and where it comes from
An industry settles on one of them as "the customer".
Path 3 asks what the chain is, which link the industry focuses on, and what new value would open if the focus moved to another link. The book's case is Bloomberg, which built for the traders who used the terminals rather than the IT managers who bought them. the authors' post "How to be creative" on blueoceanstrategy.com and Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 3.
Complementary products and services (Path 4). Few things are used on their own.
The rest of it, and where it comes from
Path 4 asks what happens before, during and after a product is used, and which of the buyer's problems the industry ignores because they sit outside its own definition of what it sells.
The book's case is Philips' kettle with a limescale filter: a problem that had nothing to do with the kettle and everything to do with the tea. Same sources (the authors' post "How to be creative" on blueoceanstrategy.com and Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 3).
Functional versus emotional orientation (Path 5). Every industry settles not only on what it sells but on how it appeals: some compete on price and function, others on feelings. That orientation is learned, and companies teach it to buyers.
Where it comes from
Path 5 asks whether it could be flipped: stripping the emotional extras out of an emotional industry to make it simpler and cheaper, or adding feeling to a commodity to open new demand. The book's cases are Viagra (a medical treatment turned into a lifestyle purchase), QB House barbers (emotional turned functional) and Swatch (functional turned emotional). Same sources (the authors' post "How to be creative" on blueoceanstrategy.com and Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 3).
Across time (Path 6). Path 6 does not predict the future.
The rest of it, and where it comes from
It takes a trend that is already visible, clearly matters, cannot be reversed and has an obvious direction, and asks what the world looks like once that trend has finished happening.
It then builds for that world rather than for today's. The book's case is Apple reading the flood of illegal music file-sharing and building iTunes. Same sources (the authors' post "How to be creative" on blueoceanstrategy.com and Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 3).
Process
The five steps of Blue Ocean Shift. The authors' step-by-step sequel to the first book: get started by choosing the scope and the team; understand where you are now; imagine where you could be; find how you get there; and make your move.
Where it comes from
In more detail: step 2 draws the as-is canvas on five to twelve competing factors; step 3 uncovers the industry's hidden pain points and the three tiers of non-customers; step 4 applies the six paths and the four actions to build several candidate moves; step 5 selects one, tests it quickly with real buyers, and launches. The four steps of visualising strategy live inside steps 2 to 5. blueoceanstrategy.com/blog/five-steps-making-blue-ocean-shift and the book's chapter structure. The four steps of visualizing strategy live inside steps 2 to 5.
The strategic sequence (sequence of creating a blue ocean). The order in which an idea is tested, in strict series: does it give buyers something they truly want; is it priced so enough of them would pay; can it be made at a cost that still leaves a profit; and what stands in the way of people adopting it.
Where it comes from
The book's own names for those four are buyer utility, strategic price, target cost and adoption. They are serial gates: move to the next only when the current one passes, never let cost push the price up, and never let a later step reshape an earlier one. The sequence is applied after candidate strategies exist; it is the exam, not a lens for exploring. blueoceanstrategy.com, "Sequence of Creating a Blue Ocean", cross-checked.
Demand side
Noncustomers first. Look at people who do not buy before people who do; look for what they have in common before what separates them; and look to widen the market before slicing it finer.
Where it comes from
Existing customers asked what they want tend to answer with more of the same for less. New demand shows up in why people stay away. blueoceanstrategy.com blog on noncustomer analysis, INSEAD Knowledge.
Three tiers of noncustomers. Three groups, by how far they are from buying. Those at the edge of the market who buy the least they can and are ready to leave.
The rest of it, and where it comes from
Those who considered the offer and chose against it, or cannot afford it. And those whose needs were always assumed to belong to some other market entirely.
blueoceanstrategy.com/tools/three-tiers-of-noncustomers.
Buyer utility map. A grid of thirty-six squares. Across the top, the six stages a buyer goes through, from choosing to disposing of the thing.
The rest of it, and where it comes from
Down the side, six things any buyer wants: less time and effort, less complexity, convenience, less risk, something to feel good about, and less harm done.
The team walks every square and asks what the biggest block is and why, marking where buyers hurt and where the industry already pours in effort; the untouched squares are the ones worth exploring. The authors say the six stages are a template and can be renamed to fit the industry, which is what EKANA did: choosing and ordering, delivery, the season, beyond the match kit, mid-season changes, and end of season. The six wants were kept as the book's. blueoceanstrategy.com/tools/buyer-utility-map, the authors' blog post "How to turn your customers' pain points into opportunities" (Blue Ocean Shift), the official Blue Ocean Shift exercise template "Plotting Your Buyer Utility Map", and Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 6. EKANA's stages were renamed to fit club kit: choosing and ordering, delivery, the season, beyond the match kit, mid-season changes, end of season and after; the six levers were kept as the book's.
Terms from the book we have not needed yet
Four steps of visualizing strategy. The book's own drawing process: agree the picture of today before discussing change; go into the field; draw the new curves and get reactions to them; then put before and after on one page so everyone can see the move.
Where it comes from
The authors' names for the four are visual awakening, visual exploration, the visual strategy fair, and visual communication. Kim & Mauborgne, focus on the big picture chapter, cross-checked across official and secondary sources.
How the book presents the six paths. The 2005 book sums the six paths up in one table with two columns: where an industry fighting its rivals looks, against where a company creating new space looks instead.
Where it comes from
Row by row: the rivals inside the industry against alternative industries; the position inside a strategic group against the groups themselves; the buyer group the industry serves against the whole chain of buyers; the product as the industry defines it against everything complementary to it; the industry's accepted basis of appeal against the other one; and adapting to trends as they happen against walking a trend to its conclusion. This site's six-paths page borrows that two-column shape. Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 3, closing table.
The six paths recording sheets (Blue Ocean Shift, step 4). The authors publish one recording sheet per path, each with the exact questions a team asks buyers in the field.
The rest of it, and where it comes from
EKANA did not run them: the family decided against formal research and reasoned each path from what it already knew.
In outline, the sheets ask: why customers chose one industry over its alternative, and what put them off the other (Path 1); why buyers trade up or down between groups of suppliers, and what compromises they still make (Path 2); what an untargeted buyer group would value most if anyone built for it (Path 3); what happens before, during and after use, and the biggest block at each stage (Path 4); whether the industry is functional or emotional, and what flipping it would mean in specific terms (Path 5); and which three to five trends are decisive and irreversible, and what each does to what buyers value (Path 6). the authors' exercise template "Applying the Six Paths Framework to Reconstruct Market Boundaries", blueoceanstrategy.com.
Output of step 4. Step 4 ends with several candidate moves, not one. Each carries its own four actions, its own new line on the picture, and its own tagline.
Where it comes from
blueoceanstrategy.com/blog/five-steps-making-blue-ocean-shift.
The four hurdles to strategy execution. Four things that stand between a strategy and its execution: people who cannot see why change is needed, the belief that a bigger change needs bigger resources, players who will not move fast, and those who lose from the change and fight it.
Where it comes from
The book's names for the four are the cognitive, resource, motivational and political hurdles. blueoceanstrategy.com/tools/four-hurdles-to-strategy-execution and Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 7.
Tipping point leadership. Rather than trying to change a whole organisation, concentrate on the few people, acts and activities that carry disproportionate weight, and tip each obstacle at those points.
Where it comes from
The idea comes from epidemiology: change happens fast once a critical mass of people's beliefs tip towards it, and the key is concentration rather than spreading effort thin. The book's case is William Bratton at the New York Police Department in the mid-1990s. blueoceanstrategy.com/tools/tipping-point-leadership and the same chapter.
Hot spots, cold spots, horse trading (the resource hurdle). Hot spots take few resources and could give a lot back. Cold spots eat resources and give little.
The rest of it, and where it comes from
Moving what you have from the second to the first buys lower cost and higher value at once, without asking anyone for more money.
Horse trading is the third piece: exchanging what one part of a business has spare for what another part is short of. The book's two questions are which activities consume the most and return the least, and which would return the most and are starved. blueoceanstrategy.com/blog/four-hurdles-strategy-execution and the same chapter.
Kingpins, fishbowl management, atomization (the motivational hurdle). Motivate the natural leaders others follow rather than everyone; make what they do visible to all; and break the challenge into pieces small enough that each person can see exactly what to do and believe it is possible.
Where it comes from
The book's three names for those are kingpins, fishbowl management and atomization. Kim & Mauborgne, Blue Ocean Strategy, 2005, chapter 7, cross-checked against secondary summaries.
Terms we use in our own words
Strategic contradiction. Used on this site for a high promise on one factor that nothing in the offer delivers; the book's exact wording is still to be confirmed against its chapter on visualising strategy.