Blue Ocean Strategy is one of the business buzzwordy concepts that’s actually worth knowing about if you’re trying to authentically bring your business into the world. Its a methodology and planning process that was penned and cultivated in a book, Blue Ocean Strategy, by a couple of strategists and professors from INSEAD (international business school) by the names of W.Chan Kim and Renee Mauborgne. They combed through mountains of strategic decisions made by firms over the last century and boiled them down into a strategic framework that you can use to help better position your business.
It’s an awesome idea and a great way to visualize how your business is making strategic decisions.
At the heart of it, Blue Ocean Strategy is all about finding the open and untapped waters of your market. You are literally looking for either new markets or under-served markets that you can pivot your business into and hopefully capture.
To quote one of my favorite authors and TED Talk speakers Malcolm Gladwell - you are giving your market some “extra chunky” (Here’s the TED Talk if you’re curious but make sure you come back!)
What this blog post is going to do is break out the major concepts of the Blue Ocean Strategy framework. This is not so much a review of the book but it will hopefully help you getting into a mindset that helps you find ways that you can differentiate and find a competitive space. That new mindset will give you the opportunity to offer a very specific and niche value.
The first big concept in Blue Ocean Strategy is working on Value Innovation. Value Innovation is not an easy thing to pull off as it’s simultaneously finding ways to offer more value while lower costs. One tools that you can use to help find your Value Innovation is something Blue Ocean Strategy calls the Eliminating-Reducing-Raising-Creating Grid. This grid is a tool to help you organize your business so that you can flush out where you can differentiate against other businesses in your industry. You are listing the factors in your business that follow the prompts in the grid and taking a strategic look at what’s happening outside of your business.
After you work on ways that you might be able to find your Value Innovations there is a four principle framework that will help streamline your strategy process. These principles will help you focus the factors you flushed out and really hone in on how you can position your business so that you are serving your own blue ocean.
1. Rethink your market boundaries.
Where can you create an uncontested (low competition) market? It’s not always easy to move away from trying to make your slice of the pie bigger and work on baking an entirely bigger pie. There’s no reason you can’t go out and redefine who your market is.
2. Think of the big picture.
Everything is variable in the long term so you need to think about what your business might look like a few years down the road. It will help in the planning process in the short term if you have an idea of the culture, processes, and value you want to offer in long term. Everyone wants profit so don’t just try to plan for that - this process will blow up in your face.
3. There’s always a little risk in this but you have to start thinking about offering value beyond what your customers think they need.
You are in business to provide a solution to a particular problem or set of problems. To find your blue ocean you have to try to get your finger on the pulse of the next set of needs your customers are going to have. How can you add value to what you are already doing so that your offerings are so full of value that you can’t possibly be substituted out.
4. Get your strategic sequence right.
This is not an overly complex sequence and it’s really powerful. It’s three big questions and if you are unsure or answer “no” to any of them you have to go back and rethink it through. The first is, are you offering the most value as possible, economists would call this utility? After that is the price you are asking aligned with your product or service for your market? Lastly, can you produce it at low enough costs to get to the profit goals you have set up for yourself and the business?
The last part of the Blue Ocean Strategy has to do with how you execute and implement. It relies on and utilizes tipping point point leadership and the development of fair processes. To boil those into the most actionable and digestible nuggets possible you should be thinking about how you can ignite the values and beliefs of your stakeholders and use passion to ultimately spread strategy. You get to leading with passion and conviction through trust. That’s where fair processes come in.
Fair processes happen when your stakeholders, employees, or partners trust that you will make the right decisions in terms of moving the business forward. What are the things that you can do to show the people that rely on you that you deserve their trust and have the compassion and drive to move your strategy forward.
Blue Ocean Strategy is a really robust framework and it would definitely take more than just one blog post to really do it justice. My hopes here were to present you with a different way to think about how you are bringing your strategy to life. How can you infuse a little Value Innovation, tipping point leadership, fair practice, and the four principles above into what you are doing everyday to push your business forward.