Certified Strategy
Consultant | Motivational Speaker | Corporate Planning | Blue Ocean
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Certified Strategy
Consultant | Motivational Speaker | Corporate Planning | Blue Ocean
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What
Is Blue
Ocean Strategy is a series of managerial decisions that drive customer value
up while driving costs down with a series of moves that create value innovation. The
well-defined process looks at existing markets in a different way and
identifies new competitive factors that add value and eliminate head-to-head
competition. When you apply the Blue
Ocean Strategy, you unlock new
market demand and make the competition irrelevant. By contrast, the Red Ocean Strategy focuses on existing customers and is where most companies compete, seeking customers from the same market as their competitors. Researchers Kim and Mauborgne suggest that companies break out of the red ocean of bloody competition and create uncontested market space in the blue ocean.
What
a Successful Blue Ocean Company Looks Like
A
Blue Ocean Strategy successfully
implemented provides strong barriers of imitation, giving companies a 10- to
15-year lead over the competition. While companies have been creating blue ocean strategies for decades,
recently successful blue ocean companies include Callaway Golf, Net Jets, Cirque
de Soleil, and Southwest Airlines. Applying
the Blue Ocean Strategy, Callaway Golf targeted non golfers intimidated
by the sport, gave them a club head so huge they couldn’t miss the ball, and
won over duffers in the process. Net
Jets took the speed and flexibility of the corporate jet and the lower cost of
commercial travel and offered the best of both industries in fractional
“timeshare” jet ownership. Cirque
de Soleil redefined the circus by eliminating the animals, the travel, and the
three rings, thereby appealing to an upscale market looking for entertainment.
Southwest Airlines chose to look at automobile transportation, not other airlines, as the alternative for comparison. By focusing on friendly service, speed, and frequent point-to-point departures, Southwest Airlines was able to price against car transportation. They diverged by eliminating, reducing, raising, and creating value that differentiated their profile from the average airline. Their tag line, “the speed of a plane at the price of a car—whenever you need it,” was very compelling, and sales took off. For additional information, visit our Blue Ocean Strategic Planning Blog . Prevent the downward profit spiral many companies face, and
contact Corporate
Strategy today.
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