Blue Ocean Strategy - review by B Lilly
Review of Blue Ocean Strategy, by Bryan Lilly
When you think about future growth, do you think creatively? This book is about finding new ways to grow, so you are not just competing on efficiency and ever thinning margins.
Consider two markets where you could compete; one is called a Red Ocean and one is Blue. A Red Ocean is a market that is already very competitive. Red is the bloody water you should avoid. To win in a Red Ocean you must steal customers from competitors, and of course these competitors are trying to steal customers from you. In contrast, a Blue Ocean is a market where competitors are irrelevant. You create a more profitable Blue Ocean by offering products and services that are very different from what the competition currently offers, and by attracting new customers. The idea is to think creatively about the current market, and then diverge to create a new market where competitors are less relevant. In developing this Blue Ocean, you must create a focused set of benefits, diverge from competition, and convey benefits clearly with a short tagline.
Because a Blue Ocean is new, you must think about future customers. The authors suggest looking at current customers, and more importantly to three types of noncustomers. These noncustomers include people who (1) minimally purchase and would rather jump ship, (2) have considered current offerings and reject them, and (3) have never seriously thought about buying in your product category. Common needs may exist among these non-customers. Find the unmet common needs, and Blue Ocean ideas will arise. To illustrate, the authors provide examples from companies in industries such as cement, hair care, fitness clubs, and many others.
For tactics, the authors discuss an analytic tool called the Strategy Canvas, and toward the end of the book they discuss implementation. The strategy canvas is developed through a process where people debate and identify ways to diverge from current competitors. During this process, list factors that currently drive customer purchase. To develop your Blue Ocean, consider what factors to eliminate or create. For example, are you providing a service that customers do not value? If so, eliminate it. And create factors that help you diverge from competitors in a meaningful way. When discussing implementation, the authors give examples that illustrate resistance to change and how some organizations have overcome this resistance.
If you do not work in marketing, this book will give you a good set of ideas. If you do work in marketing, you should recognize the Blue Ocean ideas. The Red versus Blue thinking is similar to the idea of Marketing Myopia, which has been in presented in basic marketing textbooks for over 40 years. The notion of divergence is essentially differentiation, which is also fundamental in marketing. And the strategic canvas is a new way to present positioning maps, which can be used in the same way as the canvas. Blue Ocean Strategy successfully ties these marketing ideas together in an appealing way.