Contributed by: Victor Rattanavong

A "blue ocean" strategy as coined by authors Kim and Mauborgne from INSEAD, states that companies can create a sustainable competitive advantage and reap the huge profits that follows by building demand for a product or service in uncontested market space, rather than competing head-to-head with existing players within the competitive landscape.

A relevant example of the blue ocean strategy currently being implemented or attempted can be found in the case of a South Korean music label company, SM Entertainment. As part of the Korean Wave that has been going on for a while in East Asia and most other parts of the world, the company has practically redefined the business of creating "idols" and commoditizing solo singers, boy and girl bands for mass consumption. The company started out in the domestic Korean market producing top-selling artist groups such as H.O.T, Shinhwa, S.E.S and then built on these successes by riding the Korean Wave phenomenon of increased popularity and consumption of Korean pop culture by marketing such acts like BoA, Girls Generation and TVXQ on the Asian mainland (including Southeast Asia) and Japan.

SM Entertainment's most recent indication of a blue ocean strategy being used is when they recruited local talent in the major markets that they exported to and then training or "packaging" these artists in the mould of a traditional korean celebrity or "idol" complete with trappings of industry measures of success (in the East Asian entertainment industry) of good-looks, dancing and acting skills. For example, BoA, the Korean singer, was given Japanese language and dancing training for 4 years before releasing material in Japan as part of a joint-venture with the Japanese label Avex Trax in 2004. Since then, BoA has grown to be accepted among the mainstream of Japanese pop music while at the same time doing much to improve the marketability of other successive Korean acts from the company. In the Chinese market, the company has promoted the recruitment of Chinese members to their current crop of boy bands as a method of buying credibility and appeal to the local market against a growing backlash of anti-korean wave movements brewing across China and other Asian countries.

In summary, the economic success of South Korea and relative affluence of the country has positioned it to take advantage of the throngs of rising middle-class admirers across the Asian continent and beyond who aspire to the same level of development. From an economic standpoint, the circulation of South Korean popular culture and the appealing images of hyper-modern lifestyles they portray allows for the mass consumption of cultural exports from the country and propelling it to one of the top 10 exporters of culture in the world. As mentioned prior, these exports have been growing to the extent that national governments in Asia decided to restrain the growth of expansion in their markets by promoting local content and other measures, citing "cultural imperialism" reminiscent of the current situation of America's position in the world. This in turn, formed the basis of SM's blue ocean strategy of creating uncontested market space where the artists themselves represent the product, which were engineered to profile attractive elements of Korean culture (a factor which is difficult to replicate) and then sold abroad.

Sources:
Washington Post (article can be found here)
Wikipedia
SM Entertainment