AI field report: 3 ways to unlock Blue Ocean strategy

Blue Oceans, fitness chess, and more...

Let minnow your next move, Bobby Fischer (created with Copilot)

Happy New Year fellow adventurers!

In the popular 2004 strategy book ‘Blue Ocean Strategy’, INSEAD professors W. Chan Kim and Renée Mauborgne outline an approach companies can use to strategically expand into uncontested product markets. In simple terms, Red Oceans are markets with a lot of competition, while Blue Oceans are free for the taking. Here’s the approach in the authors’ own words:

Blue Ocean Strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.

Perhaps the leading example of a successful Blue Ocean Strategy is the Nintendo Wii gaming platform, which when launched in 2006 captured widespread attention from non-traditional game players by adding motion control to gameplay, rather than competing directly against higher performing competitor products.

So, can we use GenAI tools to brainstorm our own Blue Ocean Strategies? To bring the framework to life, let’s shift our attention from Nintendo to a much older game, chess. How could a new entrant to the chess market position itself?

Today, we’ll attempt to create a Blue Ocean in the very traditional universe of chess.

In this issue:

• Case study: Blue Ocean Strategy for chess

• Spotlight: 2025 AI trends

• What we’re reading this week

Read to the bottom to see why Klarna’s CEO is upset…

Case Study: Blue Ocean Strategy for Chess

Blue Ocean Strategy is a great way to kickstart your own innovative thinking at work by helping you brainstorm new products and services. Here are 3 ways you can use LLM tools like ChatGPT to unlock Blue Ocean strategy:

1. Prompt ChatGPT for a Blue Ocean Strategy checklist to guide your brainstorming

2. Ask ChatGPT to provide a list of Blue Ocean opportunities for your industry

3. Convene your own CEO roundtable focused on Blue Ocean best practices

Let’s dig into each approach -

1. Ask for a comprehensive checklist to support you in your brainstorming. This approach can be particularly useful if you are unfamiliar with Blue Ocean Strategy and want to learn the basics first. Here is a simple prompt you can run to get you started.

   You are a seasoned market researcher and product innovation expert. First, reflect on the key dimensions of a winning "Blue Ocean Strategy" product step by step. Provide a checklist for the attributes of a successful "Blue Ocean Strategy" product that I can apply to any industry.

You can also reference the checklist we generated through ChatGPT here.

2. Prompt ChatGPT to build you a list of Blue Ocean opportunities. While simply asking ChatGPT to build a list of "Blue Ocean Strategy" opportunities yields some very innovative ideas, let’s leverage some prompt engineering best practices in order to land on a response that is more relevant and impactful. The prompt below takes advantage of personas and chain-of-thought prompting techniques: "let's think step by step" as well as giving ChatGPT time to think (“first, reflect”).

   You are a seasoned market researcher and product innovation expert. First, reflect on the "Blue Ocean Strategy" strategic framework. Then, using the "Blue Ocean Strategy" framework, please suggest some Blue Ocean Strategy opportunities related to [your industry]. Let's think step by step.

   Not only did ChatGPT build out a list of 8 opportunities, it also helpfully documented its reasoning process, giving you a blueprint for your own analyses:

   1. Reflect on the Blue Ocean framework, including the Eliminate-Reduce-Raise-Create (ERRC) Grid, a tool used to guide strategy/product design.

   2. Analyze the Traditional Chess Market

   3. Identify Unmet Needs and Potential Non-Customers

   4. Blue Ocean Opportunities for Chess

   5. Testing Commercial Viability

And in case you’re wondering, here’s the chess Blue Ocean opportunity from ChatGPT that I found the most fascinating:

We’d play!

3. Convene your own CEO roundtable focused on Blue Ocean best practices. Sometimes the best way to learn the finer points of implementing strategy is to learn from leaders who’ve already been there. Don’t have any CEOs to call? We can instead use ChatGPT to convene our own ‘CEO roundtable’ and learn from their collective (although artificial) wisdom using a prompt like this:

   You are a seasoned market researcher and product innovation expert. First, reflect on the key dimensions of a winning "Blue Ocean Strategy." Please identify 5 companies [in your industry] who have successfully launched Blue Ocean Strategy innovations. Imagine the CEOs of those 5 companies had lunch together and they asked a journalist to summarize their best tips. Share the journalist's conclusions in 300 words.

The ChatGPT “journalist” picked the following companies to lunch with: Apple, Tesla, Netflix, Airbnb, and Cirque du Soleil. The “journalist” learned how Apple and Tesla challenged industry norms, Cirque du Soleil and Airbnb focused on value innovation, and Netflix targeted noncustomers.

Here’s my favorite conclusion from the 300-word report:

Simplify and Innovate Simultaneously: Each CEO stressed simplifying the customer journey. Whether through seamless tech experiences or redefining service models, simplification attracts non-customers and adds value without overcomplicating.

Put these three approaches to work in your own industry and let us know what insights you uncover.

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Spotlight

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What we’re reading this week

• Early AI agent use cases in production at J&J, Moody’s, EBay. [WSJ]

  • “By 2028, at least 15% of daily business decisions will be made autonomously through agentic AI—up from 0% in 2024, Gartner said. But, also by that time, 25% of enterprise breaches will be tied to AI agent abuse.”

• The biggest change to the way search engines have delivered information to us since the 1990s is happening right now. [MIT Technology Review]

  • “Publishers are completely freaked out. The shift has heightened fears of a “zero-click” future, where search referral traffic—a mainstay of the web since before Google existed—vanishes from the scene.”

• Klarna’s CEO is Sad to Learn AI Can Do His Job. [Business Insider]

  • “My work to me is a super important part of who I am, and realizing it might become unnecessary is gloomy."

Adventure on.