Can there be a Blue Ocean Strategy in the Training and Development Industry?

Note: A few days ago I attended the ASTD conference in Washington, DC specifically to hear the keynote address given by Renee Mauborgne. Rene is co-researcher and co-author for the best selling book Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant.

According to Tim Hill, President, Blackboard Learn Professional Education, Blackboard Inc, the training and development industry is a splintered industry with a lot of competition. “Very red”, he says, when putting it in the context of Blue Ocean Red Ocean terminology, where blue oceans are new market spaces with no competition, and red oceans are the current market spaces where all the competitors compete.

Renee suggested that if you can answer the following questions, you can determine if Blue Ocean Strategy is relevant to your situation.

· Is your company facing heightened competition from domestic and international rivals?

· Do your sales representatives increasingly argue they need to offer deeper and deeper price discounts to make sales?

· Are you finding you need to advertise more to get noticed in the marketplace, yet the impact of each advertising dollar spent is falling?

· Is your company focused more on cost cutting, quality control, and brand management at the expense of growth, innovation, and brand creation?

· Do you blame your slow growth on your market?

· Do you see outsourcing to low cost companies or countries as a principal prerequisite to regain competitiveness?

· Are mergers and acquisitions the principal means your company sees to grow?

· Is it easier to get funding to match a strategic move made by your competitor than it is to get internal funding to support a strategic move that allows you to break away from the competition?

· Is commoditization of offerings a frequent worry of your company?

· List your key competitive factors; now list your competition’s. Are they largely the same?

If you answered “yes” to many of these questions, then you are swimming in a red ocean and should be looking for new markets to serve. Blue Ocean Strategy would be relevant to your company.

If Blue Ocean Strategy is relevant for you, then what can you do to bring it to your company? If you answered Yes to half or more of these questions, then I would argue that Blue Ocean Strategy is right for you.

Let’s look at the video game industry. Nintendo was lagging behind Microsoft and Sony, and didn’t like it. When they created the Wii, they went to several levels of non customers. The first line of non customers were the occasional users, typically other males who were outgrowing electronic games and were ready for something else. The next tier of non customers were girls who preferred connecting with each other than playing with technology. The third tier was everyone else, families, seniors and others.

Nintendo asked them what would make them play games and then designed a game that would fit their needs. Thus the Nintendo Wii was born and has been wildly popular with girls, families, and seniors. They reduced their costs by going low tech and increased the value by making it easy to understand, fun to play and active. Thus the Wii has outsold their competitors at a very high profit.

Let’s look at the performing arts industry, specifically classical music. Audiences are shrinking, costs are going up. The value is perceived in the well known artists who are very expensive. Andre Rieu has created a Blue Ocean Strategy in performing arts. He has no star performers, and brings classical music to the people in a fun and entertaining manner.

How did he do that? He researched the non customers and saw that they were intimidated by opera and concert halls. He lowered the veil of mystery and made the concerts people friendly. His concerts are in the top ten of all performing arts venues and outsell Bruce Springsteen.

Can there be blue oceans in the training and development industry? Renee argued that if Nintendo can do it going low tech, Andre Rieu can do it bringing concerts to the people and Perdue Farms can do it with a dead naked chicken, you can do it in your industry as well.

To check availability of Dr. Sarah Layton for speeches, workshops or strategic planning sessions, email her at info@corporatestrategy.com