Book review of The 7 habits of highly effective people by Stephen R. Covey: Blue Ocean Strategy ( Chapter 9 ) Conclusion: The Sustainability and Renewal of Blue Ocean Strategy

In the final chapter, Professor W Chan Kim introduces how to maintain a sustainability and renewal of Blue Ocean Strategy. He provides 8 imitation barriers to Blue Ocean Strategy. Since if one of the Blue Ocean Strategy is growing in the market space. Thousands of the imitators would like to join and it will become a Red Ocean market.

1) Value innovation does not make sense to a company’s conventional logic.

2) Blue ocean strategy may conflict with other companies’ brand image.

3) Natural monopoly: The market often cannot support a second player.

4) Patents or legal permits block imitation.

5) High volume leads to rapid cost advantage for the value innovator, discouraging followers from entering the market.

6) Network externalities discourage imitation.

7) Imitation often requires significant political, operational and cultural changes.

8) Companies that value – innovate earn brand buzz and of loyal customer following that tends to shun imitators.

According to Alibaba.com, Jack Ma reports that the 1^st year of the company is build up from a group of people who are not professionals. Some of them are his students; some of them are his colleagues. Alibaba.com is an ecommerce platform to explore the manufactories list to worldwide. It is an internet based business that includes online market place. Alibaba.com facilitates B2B international and domestic

China

trade. Nowadays, plenty of oversea buyers would like to search suppliers from

China

through Alibaba.com.

After the successful launch of Ailbaba.com, Jack Ma the founder of Alibaba group with his team establish another C2C platform for business and individual entrepreneurs. They also introducing a third party online payment platform – Alipay and these platforms are very similar to eBay and Paypal.

Alibaba Group and its affiliated entities now have more than 22,000 employees across some 70 cities and regions, including China, Hong Kong, India, Japan, Korea, Taiwan, the United Kingdom, and the United States.

Alibaba Group and its affiliated entities:

· Alibaba.com (HKSE: 1688) - publicly traded company in e-commerce for small businesses

· Taobao Marketplace - consumer-to-consumer (C2C) online shopping platform

· Taobao Mall - business-to-consumer (B2C) online retail marketplace

· eTao - search engine designed for online shoppers

· Alibaba Cloud Computing - advanced data-centric cloud computing services platform

· China Yahoo! - one of China’s leading internet portals

· Alipay - third-party online payment platform

· Tao magazine – a real magzine which is selling in the street and provides the latest items and news of TaoBao.

· Tao bangpai – forum group, usually the Taobao sellers and buyers would like to chat in this place.

· Aliexpress – for individuals to purchase in lots from wholesalers

Professor W. Chan Kim indicates that in order to maintain a steady growth of Blue Ocean Stragegy. You should set up the 8 imitation barriers. If you set up the barriers so high, the imitators won’t join into the market so easy. Alibaba.com is a good example, the Alibaba team getting each strategic element right and aligning them in an integral system to delivery value innovation. Once the success launch of Alibaba.com B2B platform, the team discovers that the need for expansion in C2C market space. Thus the formation of Taobao and Tmall is coming out. Another new Blue Ocean is created. Professor W. Chan Kim suggests that the managers should focus on operational improvements and geographical expansion to achieve maximum economies of scale and market coverage. This is the aim to maintain the steady growth of Blue Ocean Strategy, distancing yourself from your early imitators. You should become the leader of the market apace and discouraging the imitators in the process. As a result, you should dominate the Blue Ocean over your imitators for as long as possible.