January 08, 2008

Do you work in "red" or "blue" oceans?

On page 78 of their book Blue Ocean Strategy, Renée Mauborgne and W. Chan Kim write:

"Cisco Systems created new market space by thinking across time trends. It started with a decisive and irreversible trend that had a clear trajectory: the growing demand for high-speed data exchange. Cisco looked at the world as it was and concluded that the world was hampered by slow data rates and incompatible computer networks. Demand was exploding as, among other factors, the number of Internet users doubled roughly every one hundred days. So Cisco could clearly see that the problem would inevitably worsen. Cisco’s routers, switches, and other networking devices were designed to create breakthrough value for customers, offering fast data exchanges in a seamless networking environment. Thus Cisco’s insight is as much about value innovation as it is about technology. Today more than 80 percent of all traffic on the Internet goes through Cisco’s products, and its gross margins in this new market space have been in the 60 percent range."

Interested in knowing more about the Blue Ocean Strategy concept? If yes, then read this.

How about yourself - do you work in “red” or in “blue” oceans? To find out, try asking yourself these questions.
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