Entrusted Business

Historically, major global companies came predominantly from the United States, Europe, and Japan. But that is changing at incredible speed. Over the last fifteen years, the number of companies from China in the Fortune Global 500 has increased more than twenty times, the number of Indian companies has increased roughly eightfold, and the number of Latin American companies more than doubled. This suggests that these big emerging economies do not only represent oceans of new demand to unlock. They also represent oceans of new potential competitors with global ambitions no different than Toyota's, General Electric's, or Unilever's. But it's not just companies from these big emerging markets that are on the rise. That is just a tip of the iceberg of what the future portends.

In the last decade, there has been a fundamental shift in the cost and ease of becoming a global player from virtually any corner of the globe. This is a trend no organization can afford to downplay. Consider just a handful of facts. As for global advertising, there is Twitter and YouTube where you can market your offerings for free. With the low entry cost to become a global player, new players from virtually all corners of the world can increasingly participate in global markets and offer their wares or services. While, of course, these trends don't mitigate all barriers to becoming a global player, they certainly intensify global competition. To stand apart in these overcrowded markets, you need to be creative through value innovation. Today both the challenges and opportunities we all face are great. By providing methodologies and tools organizations can apply to pursue blue oceans, it is our hope that these ideas will help to meet these challenges and create opportunities so we all come out better. Strategy, after all, is not just for business. We invite you to join us on this journey. And we have worked together ever since, often seeing ourselves along the journey as two wet rats in a drain. It has made our lives rich and our worlds more beautiful. But we were excited every day of that journey because we were on a mission to learn and improve. These ideas are not for those whose ambition in life is to get by or merely to survive. That was never an interest of ours. If you can be satisfied with that, do not read on. But if you want to make a difference, to create a company that builds a future where customers, employees, shareholders, and society win, read on. We are not saying it is easy, but it is worthwhile.

Our research confirms that there are no permanently excellent companies, just as there are no permanently excellent industries. To improve the quality of our success we need to study what we did that made a positive difference and understand how to replicate it systematically. Opportunities have been out there. As they have been explored, the market universe has been expanding. This expansion, we believe, is the root of growth. Yet poor understanding exists both in theory and in practice as to how to systematically create and capture them. Cirque du Soleil succeeded because it realized that to win in the future, companies must stop competing with each other. The only way to beat the competition is to stop trying to beat the competition. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean bloody. But with supply exceeding demand in more industries, competing for a share of contracting markets, while necessary, will not be sufficient to sustain high performance. Companies need to go beyond competing.

Accelerated technological advances have substantially improved industrial productivity and have allowed suppliers to produce an unprecedented array of products and services. The result is that in increasing numbers of industries, supply exceeds demand. The trend toward globalization compounds the situation. As trade barriers between nations and regions are dismantled and as information on products and prices becomes instantly and globally available, niche markets and havens for monopoly continue to disappear. While supply is on the rise as global competition intensifies, there is no clear evidence of an increase in demand relative to supply, and statistics even point to declining populations in many developed markets.