Today, the competition in Vietnamese market is becoming more tense and fierce. Most companies concentrate on doing better than rivals to gain the competitive advantage. The traditional competition strategies are necessary but they are not sufficient enough to sustain high performance because of tense competition in the market nowadays. Companies need to go beyond competing. Blue ocean strategy is a new approach which helps companies finding more business opportunities. With Blue Ocean Strategy, the aim is not to be better than or beating the competitors. On the other hand, Blue Ocean Strategy focuses on making the competition of no importance to the business. Thus, the aim of Blue Oceans Strategy is to create uncontested marketplaces (Blue Ocean) where the new needs of existing or new customers are met. "Blue Ocean strategy can help companies to find new market in which they can capture more customers while improving cost structure." (Gorrell, 2005)
"Strategy" has always been one of the critical issues of the management and contributed strongly to the success of the business. There were some studies about the way to creating "new space" to survive in the market. Of course, when the market are becoming more and more crowded, every company does not want to compete with each other but it is not easy to find a new space in the marketplace now. The question when a company want to create a new space is that how they can separate their product from the existence market to create the new space for their company. Recently, the new approach to make" new space" in the market, namely Blue Ocean Strategy (Kim and Mauborgne, 2005) is responded positively by the business people around the world. Indeed, Kim and Mauborgne (2005, p. 18) shared the market in two parts: Red and Blue oceans. Red oceans are nowadays existing markets, known market spaces. On the other side, Blue oceans represent none existing markets with unknown market spaces. In the blue ocean, the goal is "making competitors irrelevant" ( Kim and Mauboorgne, 2005) instead of competing with each other like in the red ocean area. From the blue ocean strategy, a new space is created by "value innovation", which is defined as the keystone of "Blue Ocean Strategy". According to the "Blue Ocean Strategy" book, Kim and Mauborgne (2005, pp. 12-16) defined that the "value innovation" is generated only when a company's actions affect both its cost structure and value proposition to buyers. Cost saving is built by reducing or eliminating the factors an industry competes on. Buyer value is formed by raising and creating the new elements the industry has never offered.
In practice, the idea of "Create new space for your business" is not completely new. Before the publication of "Blue Ocean Strategy" book, it has been signal to emerge in some studies before but with each study, it has different point about how they can create a "new space" for the business. Let look at some studies seem to be related to the term "Blue Ocean Strategy". In the 1980s with emphasis on the effective use of all the company's resources to gain competitive advantage, Michael Porter developed his analytical frameworks, including five forces analysis, the value chain, and generic competitive strategies, were widely acknowledged by both academics and practitioners. According to the "competitive strategy" book, Michael Porter (1998) emphasized the business will create competitive advantage by selecting one of the following strategies: Cost leadership strategy, Differentiation, Concentration. In the approach of Michael Porter about competitive strategies, the company has to attain competitive advantage via one of three strategies above to compete with their competitor in the market. Some people judge that the value innovation that Blue Ocean Strategy talks about is a different way of saying differentiation, and therefore is "an old wine in a new bottle". This notion rose from a misunderstanding about Blue Ocean Strategy as well as one about the strategic choice of differentiation in Porter's competitive strategy. The strategy definitely helps company gain competitive advantage over their rivals but it is not sure that can help the company achieve the "new space" for their business. From my point of view, the competitive strategy is used to compete with rivals in the "red ocean"- existing market rather than creating "new space"-uncontested market space. Because of overcrowded competitors, these days there is only limited space for a company to operate the business. The author of Blue Ocean Strategy opposed that a company can choose uncontested marketplaces (Blue Ocean) instead of following one of the strategies above to survive in the market. In the Blue Ocean, the rivalry does not exist and competition is irrelevant. As I mention above, the key element of "Blue Ocean Strategy" of Kim and Mauborgne is "value innovation". The "value innovation" seemed to be the combination of differentiation and cost leadership strategy. The implication of "value innovation", the cornerstone of Blue Ocean Strategy, is to implement the differentiation and cost leadership strategy simultaneously. However, the "value innovation" opposed to the "value cost trade off" in competitive strategy of Michael Porter. Porter argues that only one strategy should be followed, if not a firm will lose focus and thereby its direction. Michael Porter believed that a company can either bring greater value at a higher cost or bring reasonable value at a lower cost. The single strategy (differentiation or cost leadership) definitely helps company gain competitive advantage but it is not sure that can help the company achieve the "new space" for their business. The idea of value in "Blue Ocean Strategy" book of W. Chan Kim and Renee Mauborgne( 2005, p. 19) rejected the traditional view of Michael Porter on strategy, where "companies achieve competitive advantage through either one of the two competencies: product differentiation or cost efficiency" (Porter, 1998). Blue Ocean Strategy is not about making a trade-off between differentiation and low cost, but about breaking the trade-off between the two strategies. The key aim of blue ocean strategy is to create value innovation by driving costs down while simultaneously driving value up for buyers. Only by doing both things, the company is able to create the "Blue Ocean" for their business. In practice, the idea of "Blue Ocean Strategy" was emerged not only in the studies of Michael Porter but also from the view of Phillip Kotler-the ancestor of modern Marketing. It had a signal to appear from the idea of "niche market". In the "Principle of Marketing" book, Kotler (2005) demonstrated that businesses have three options of competitive strategy: Market-Leader strategy, Maker-Challenger Strategy, Market-Follower strategy and Market-Niche strategy. Philip Kotler (2005) described the Market-Niche Strategy as the subset of the market on which a specific product is focusing. So the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also considered as a small market segment. But Blue Ocean Strategy is not only to create a niche market- a small incremental. The aim of "Blue Ocean Strategy" is to aim to open up new markets, explore a new demand that is not existed in the market and especially create value innovation that creates value simultaneously for both the buyer and the company. It is possible that if these companies choose the niche market segment is large enough, it may create new and profitable space for their business but it is not strong enough to be considered the blue ocean strategy.
When a company had explored the new ocean for their business, the problem that they usually had to consider is that whether they can maintain the advantage of blue ocean strategy. In an interview with W. Chan Kim posted on http://www.businessinnovationinsider.com on October 2005, he said very openly: "After a while the first copycats will arise, competing on the very same value points as you. That's completely normal; however it forces the entrepreneur to find a new strategy every several years." In the "Six Misconceptions about Blue Ocean Strategy" report by JI Mi, the "blue oceans" that turn red rapidly are usually not truly blue oceans. And JI Mi claimed that many companies are misunderstanding the key characteristics of a blue ocean strategic move. Robynne Berg had the opposite point with JI Mi. He said that "Blue Ocean Strategy is never going to become a red ocean only if it's probably in a government sanctioned monopoly" (Robynne Berg 2012). He argued that any company who makes the mistake of thinking Blue Ocean strategic move will provide them with lasting sustainability will one day be repented because of their subjective thinking. I agree with the point of Robynne Berg that in the tense marketplace today, the copy and imitation from the competitors is difficult to avoid and the copycat are even only after a short time that you explore your blue ocean. If you have created a significant profit in "Blue Ocean", the competitors will swim into the marketplace. However, Blue Ocean may become red eventually but not easily. If the company have created a Blue Ocean move your offer will be difficult to replica, it will take competitors a long time to catch up. And by this time, if you're smart, you may upgrade your product to improve the sustainability of your ocean or discover another blue ocean.
And the next question is there any way to prevent the "fish" come from coming to" your ocean"? In the "Every Blue Ocean Will Eventually Turn Red - Create An Unfair Advantage Instead" article by Dan Herma, he mentioned about the unfair advantage to avoid the imitation from the rivals. He classified the "value innovation: in "Blue Ocean Strategy" into two types. They are "on-core differentiation" and "Off-core differentiation". "On core differentiation" gives benefit considered central to customer in the industry. The customer really expected from a new product such as your company. Because your company discovers a new the benefit is considered relevant by your consumer in the market so that then sooner or later imitations will mushroom, no matter how big your innovation is. On the other hand, when your innovation and differentiation offer further benefits which are not considered relevant in your category which is called "Off-core differentiation", there is a good chance of avoiding imitations, even after years of success. This kind of differentiation may be thought as silly or irrelevant, but the importance is not the idea but from how you can manage to excite consumers. The "Off core differentiation" creates the Unfair Advantage which have you avoid the imitation. Because what you offer is perceived by your competitors as weird, irrelevant, or overly-unique, such which is pointless to imitate. This is the big secret. This is your competitor's trap. There are two main types of Off Core Differentiation: Imported Benefits, and Peculiar Particularity. In many situations, we apply both of them to gain unfair advantage. The first type happens when you import a benefit which is important to consumers in other product categories, but are not considered relevant in yours. The other type is a unique style which is not typical to the category. But in my opinion, it is not easy to find the "off-core differentiation" which is accepted by the customer especially in Vietnam so that you should accept the danger of copycat from the competitions as an unavoidable thing. In fact, the blue ocean could be for a while, but then the rivals can penetrate into your blue ocean in order to break your exclusivity What you should do is that trying to "swim as far as possible" before other one penetrate into your blue ocean and also rethinking your industry, market place and innovation your products continuously.
With the accession to the World Trade Organization (WTO), Vietnam has to adapt and integrate into the globalization. The affiliation has brought both opportunity and threat to the Vietnamese business. Vietnamese companies, especially small companies are in danger of being swallowed by potential foreign companies. Blue Ocean Strategy is a preeminent strategy to draw a promising prospect for Vietnamese companies. The "Blue Ocean Strategy" along with the success of the business has recently applied it indicated that this strategy can help Vietnamese company to survive and develop in the tense market by finding out the "Blue Ocean"-market space not yet explored. In Vietnam, the products which have been known as the successful application of "Blue Ocean Strategy" are X-men shampoo, "Pho24", "0 degree" green tea, etc. The "Blue Ocean Strategy" provides an opportunity for a company to be able to make the breakthrough in their business. But the " Blue Ocean Strategy" still has the limitation when we apply in Vietnam. In fact, this strategy is mainly based upon the business practice of European and American companies over a period of more than 100 years. As Blue Ocean Strategy cites many examples of Western and American companies, does this mean that the theory is rooted in Western business practice and does not suit the need of Vietnamese company? The answer is "No" .What should we do is to consider the condition of Vietnamese market and not hollow "Ocean Blue Strategy" in Vietnam. We have to adapt with the situation of Vietnam. Besides the successes in application of X-men shampoo, "Pho24", "0 degree", we have also seen some failure of implementing blue ocean strategy such as the idea of fresh beer, spice from seaweed, etc. The ideas of these products are really good but the main reason of failure came from the way they operated and implemented the plan in the practice. The blue ocean is not difficult to find but the problem that Vietnamese company should consider is that by what way they can transfer their blue ocean strategy to the reality. And we can also percept the other limitation of this strategy in Vietnam is risk. By choosing blue ocean strategy, your company can gain big successes but also have to be accepted high risk. The ocean strategy finds out the demand that nobody has explored so that it is not easy to get the customer. Another problem is that that the "blue ocean" is not survival forever. We cannot avoid the penetration of the fish to your "blue ocean" and at this time, your ocean will become red. Blue Ocean Strategy does create sustainability, but long-term sustainability requires continuously innovation along with right plan. The fact to consider is that which risks Vietnamese companies have to face and how Vietnamese company can manage, implement "Blue Ocean Strategy" and also protect their "Blue Ocean".
