Bringing Blue Ocean Strategy to FMCG Markets

Abstract

An emerging concept in strategic management directed at finding new business and value propositions is the framework coined ‘Blue Ocean Strategy’ (BOS) by Kim and Mauborgne, from INSEAD, Fontainebleau. The authors developed the BOS-framework, which comprises of a set of tools, on the basis of ex post studies of over 150 cases from 30 industries. The results were most extensively covered in the book ‘Blue Ocean Strategy’, published in 2004. The success of their work may be illustrated by, for example, Deloitte, Procter & Gamble, and HP, who use this strategic management concept.
This scientific paper is one of the first that tests the applicability of BOS in Fast-Moving-Consumer-Good Markets (FMCG). Our prime objective is to investigate whether the application of BOS enables the identification of an uncontested market, or not. The second objective concerns the adaptations required to make the BOS applicable to the FMCG Industry. The field of research is the European fruit and vegetables industry (EFVI), which is one the most competitive industries in Europe, lacking fundamental innovations. The complexity of bringing BOS to FMCG Markets required a two-stage research strategy; the first stage comprises of the combination of desk research with orientational case study research, followed by a second stage comprising of a large survey. In the first stage, six CEOs, chairmen and consultants, were interviewed to tailor the research to the insider perspective. In the second stage, a quantitative questionnaire was send to 299 fruit and vegetable companies, active in Europe. The realized response was 24 (response rate: 8%). Although not high, the response may be understood as sufficient, because the research was primarily intended to learn whether the BOS-framework is strong enough to identify uncontested market spaces even in very competitive industries.