Strategy consultants seem to recommend to go beyond the core blue ocean. Confused? Let me explain.
Chris Zook’s book Beyond the Core describes how an organization can continue to grow after its core business has plateaued by finding adjacent opportunities which both leverage and reinforce its core strengths. Zook recommends a series of small, harmonious adjacent moves to maximize long-term growth. To quote Dilbert, organizations should “enhance [their] strategy into the next adjacency”:
Instead of trying to enhance adjacencies, Kim and Mauborgne’s Blue Ocean Strategy advocates moving from profit pools in core markets to new blue oceans: uncontested markets in which competition is irrelevant. By contrast, red oceans represent bloody fights over market share in both core and adjacent markets, turning products into commodities. Those who don’t re-assess their strategy are destined to become little more than fish food:
Both ideas are intriguing (and presumably sold lots of books) but neither are appropriate to every organization. Simplistically, larger multinationals may want to think about growing from their core while smaller organizations and divisions of multinationals might be better advised to jump into another ocean.
Regardless, most organizations don’t fail due to poor strategy. Instead they fail because what they do doesn’t match what they say they will do. Their execution isn’t aligned with their strategy.
So, what do you think? Is Zook rotten to the core or are Kim and Mauborgne all wet?