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Let's start with 3 questions...
1) Who wants to make their competitors irrelevant?
Say that again very slowly...'make your competitors irrelevant'.
'Yes please!'...everyone says, but why don't we do it?, or even hardly get close to doing it.
Imagine not worrying about your competitor moves each week.
2) Who wants to create sustainable profitable sales growth?
Above market margins, with more stability to the seasonal or innovation cycle.
3) Who wants to stop chasing customers vs customers attracted to you?
There is a lot of costs in chasing customers...sales people, digital marketing etc. Or the more transactional customer relationship where customers just drift between competitors.
It definitely gets you thinking! Doesn't it?
"We believe that an understanding of blue ocean strategy will help today’s companies as they struggle to thrive in an accelerating and expanding business universe." (W. Chan Kim & Renée Mauborgne)
These type of questions are continually asked in month-to-month business review meetings, but yet most companies keep chasing the same old thing, in the same old 'red ocean' way. And there are plenty of great businesses and brands doing it - most do it that way. But we do tend to get caught in more of a fixed mindset with the industry constraints we started with...and thats how things roll on. But what if we could use just a little bit of this thinking to help us grow?
In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.
BLUE OCEAN STRATEGY in summary.
At first glance, when you start thinking 'red vs blue' it looks so obvious! And the more you dive into the research and case studies that support this strategy, you realise it's pretty powerful.
Where it gets really interesting is when you start thinking of 'value innovation' or creating differentiating while you shave cost. Why do you have to choose between them?
And if you think about it...have you ever seen a new product with added features for less cost fail? Not many I can think of.
In a study of business launches in 108 companies, we found that 86% of those new ventures were line extensions (RED OCEAN)
By contrast, the 14% invested in creating new markets and industries delivered 38% of total revenues and a startling 61% of total profits. (BLUE OCEAN)
Yes, It's Harder In Practice
For sure, these concepts sound great in theory and yes they are harder in practice. But even if you use some of this type of thinking, you can push the boundaries of your business and open up some pretty incredible opportunities that could be right in front of you.
Our Top 10 Tips To Use 'Blue Ocean' Thinking In Practice
1) Focus on you - your company, your brand (forget everyone else for a moment)
Blocking out things you can't control can really help keep you focused.
2) Go back to what made you great in the first place
Reconnect with your heritage, your foundations.
Think about how that fits today.
3) Turn your perceived weakness into a threat
Yes we are smaller - but we are faster, more agile, with less overheads.
Yes we are independent - but we relate better to our customers.
i.e. big companies promote they are big to scare others off - they have to.
4) Don't assume too much
Check in with a few customers - always.
Ask them the things in their day (pain points) that annoy them - alot of the time it's actually just little things initially.
Ask them for some wild ideas too.
5) Think beyond your standard product definition
Think broader, about nearby products.
Think services to support.
Think pre-sell, after-sell, think up-stream and down-stream products.
6) Think - if you had no money at all
Pushes to your current resources.
7) Think - if we had unlimited budget
Opens your mind to paint a picture of the end result with no constraints.
8) Think - if we had to implement next week
Pushes to your current capabilities.
9) Think - if we had no timeframe constraints
Helps you relax about the right design vs fast-tracking everything.
i..e. doesn't matter if it takes 3-5 years.
10) Relate what you do with other industries for a minute
Mix and match different brands, industries...'if we were...' to help open your thinking
Conclusion
Every company has a bit of 'blue ocean' in them.
And every planning meeting has a bit of 'blue ocean' thought that can be thrown on the table.
Don't be scared off by the theory, just use some of it to help expand your thinking in a practical way.
And remember that well-worn quote...
"Things that don't grow (or change, or adapt) usually fade."
REFERENCES:
The official website is packed full of great summaries, the books and courses.
Harvard Business Review - one of the original papers presented.
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