Your Portfolio and the Pioneer-Migrator-Settler Map

Many companies think they are so different and doing such wonderful things for their customers. They probably are doing OK, but based on my conversations with many of their customers, there is no differentiation at all from their competitors. The customers are saying they are all different in the same way.

How can you determine whether you are in a bloody red ocean or a true blue ocean? How can you determine if there is a possibility of creating a blue ocean for any of your current products or services? The Pioneer-Migrator-Settler Map helps you visualize where your portfolio of products falls in the proverbial ocean.

The products and services that are Pioneers offer unprecedented value, have a mass following of customers providing a huge opportunity for growth and diverges from the competition (have no competition). Many CEOs assume that to be a pioneer you must be technologically innovative. That is definitely not true.

Examples of Pioneers are the Nintendo Wii, which diverged from the competition to use lower technology rather than higher technology to appeal more to the masses. Also Curves utilizes the lower technology of simple hydraulic exercise equipment, rather than the higher technology equipment of the typical health club competitors.

Many companies have products and services that offer increased value but are not particularly innovative, offer the customer more for less, but basically stay within the realm of the industry competitors.

These products and services are considered Migrators because they might migrate into either the Pioneer or Settler status. If the product or service can be altered to be more innovative and offer unprecedented value, it will migrate into Pioneer status. If the product competitors copy easily and catch up it will fall into Settler status.

The Settlers are the products and services that have a great deal of competition and offer only incremental opportunities for real growth. It is important to understand the value of these Settlers and the Red Ocean business.

Red Oceans will always be around and you must be able to navigate these oceans well. The Blue Ocean Strategy tools can help you become more competitive in your bloody red ocean as well as help you create your true Blue Ocean Strategies.

To see how bloody red or true blue your portfolio is, create your P-M-S Map. Here is the structure. Place a dot in the Pioneer or Migrator or Settler square where each product or service falls today, based on the definitions above. Then look at where the dots are. If you have dots in the Pioneer square, what can you do to keep the Pioneer status into the future?

If most of your products and services are Settlers, you have a lot of company. The Settlers and the Red Ocean markets are now and will always be important. What is critical here is that you be able to navigate this ocean very, very well. Utilizing the tools of Blue Ocean Strategy and making critical strategic moves can keep you ahead of the competition.

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Posted by Dr. Sarah Layton in Blue Ocean Strategy on January 29, 2008.

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