Blue Ocean Strategy: When failure isn’t an option

The other day someone asked me when Blue Ocean Strategy should be considered as a process for their company. I kept wondering when shouldn’t it be considered as a process?

Most companies seem to be in a do or die situation with our economy today. Blue Ocean Strategy tools and processes are the very best way to navigate past all that mess and create something you don’t have to worry about. Wouldn’t it be nice not to have to worry about your competitors?

Do you want failure to be an option? The obvious answer is “no”. But then why do you stay rooted in the Red Ocean and wonder why you continue to see your market share shrink and profits diminish.

Take a look at the P-M-S map for your company. This is more in-depth than a prior posting. Consider each of your divisions or product groups or customer groups of business. How does it look today? Do you have competitors that are making you crazy? Do the prospects for the future look like more of the same…price cutting, profit eroding, and market share shrinking? Very Red Ocean. So your PMS map would look something like this:

Your market share, revenue and profits all erode over time.

Let’s look at the situation if you could add a blue ocean product or service to your offering. Would you necessarily get out of the red ocean completely? Probably not. It is paying the bills right now and you need your red ocean, it is very important. But here is what a blue ocean chart would look like:

Your blue ocean business will have no competition and may start small until you get established but will continue to grow in revenue, profit and market share. This business will help to offset the negative trends in the red ocean, but at some point you may want to have more blue ocean products and services than red ocean products and services.

Doesn’t seem very hard to understand when or why to use Blue Ocean Strategy in your company when you see the potential impact, does it?

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Posted by Dr. Sarah Layton in Blue Ocean Strategy, Governance, Growth, Strategic Planning on March 7, 2008.

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