Blue Ocean Strategy: How the Nintendo Wii Became the Theory's Poster Child

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Blue Ocean Strategy, published in 2005 by INSEAD professors W. Chan Kim and Renée Mauborgne, argues that most companies fight in red oceans, crowded markets with fixed boundaries where firms must choose between low cost and differentiation. The authors propose blue oceans, uncontested market space reached through value innovation, the pursuit of both at once. Kim began developing the ideas in the 1990s on a consulting project for Philips with C.K. Prahalad and the MAC Group. The core tool is the four actions framework of eliminate, reduce, raise and create, walked through here with a hypothetical coffee shop, along with the six paths framework and three tiers of non-customers. Nintendo's Wii, which sold over 100 million units despite weaker hardware, is the signature example.

The second half of the book addresses execution through four hurdles: cognitive, resource, motivational and political, answered with tipping point leadership borrowed from epidemiology and a fair process built on engagement, explanation and expectation clarity. The book sold more than 3.5 million copies in 43 languages and was ranked by the Chinese government and China Daily in 2009 among the 40 most influential books in the history of the People's Republic. Critics note that few companies beyond Nintendo have documented success using it, that it describes past winners rather than prescribing a method, that it lacks control groups and is unfalsifiable, that markets have porous boundaries, that it neglects marketing, and that Hamel and Prahalad described uncontested white space in 1996.

• Nintendo eliminated the complex controller, reduced processing power, raised social play and created motion controls to reach grandparents and casual families.
• The authors contrast a structuralist view of markets as concrete walls with a reconstructionist view of walls made of paper.
• Tipping point leadership targets a company's kingpins, the influencers whose belief spreads through the organization.
• Thinkers 50 named it a book of the decade, and Forbes still called it a corporate trend ten years after release.
• Gary Hamel and C.K. Prahalad's Competing for the Future made a similar case under the name white space.