Blue Ocean Strategy - A book I've been wanting to read for years and finally got my hands on it during my last trip to India. If I were to summarize it in a sentence - A pragmatic guide for organizations to differentiate themselves in the market. No - I did not lift this from the back cover. ;-) It very candidly discusses reality as it is without covering it up. For eg., "
Organizational politics is an inescapable reality of corporate and public life." Books of this nature are mostly biographical or heavy research material which describes what
someone did. This book gives an almost step by step procedure on what
someone should do to build what they call as an "
uncontested market place". The flow of the book cannot be any better. It begins with explaining what a "
Blue Ocean" means, moves on to guidelines on formulating, executing and finally sustainability and renewal of the strategy. This last bit about sustainability and renewal is something not many people think about. Mr. Kim and Ms Mauborgne have really laid it out all the way through the end....and beyond. Of course I do not and cannot talk about every little tip the book offers, but wanted to paraphrase a few concepts that simply stands out.
Beating Competition - The only way to beat the competition is to stop trying to beat the competition. (Sounds like Karate - the art of fighting without fighting). :-)
Value Innovation - Innovation without value tends to be technology-driven, market pioneering, or futuristic, often shooting beyond what buyers are ready to accept and pay for. Value innovation occurs (only) when companies align innovation with utility, price and cost positions. Value Innovation aims at decreasing costs and increasing customer value. Do not deliver the most sophisticated technology without delivering exceptional value.
Strategy Canvas - A tool for mapping your strategy against peers based on factors that affect competition among industry players, current and potential competitors. To fundamentally shift the strategy canvas of an industry, you must begin to reorient your strategic focus from competitors to alternatives, and from customers to non-customers of the industry.
Four Actions Framework
- Eliminate factors that companies in your industry have long competed on...factors taken for granted even though they no longer have value or may even detract
from value.
- Determine factors to reduce cost where companies tend to over serve customers (for no gain)
- Raise the value to customers by eliminating compromises your industry forces customers to make.
- Discover entirely new sources of value for buyers and create new demand
Characteristics of a good strategy - Focus, Divergence and a Compelling Tagline. If not, strategy is quite likely to be muddled, undifferentiated and hard to communicate. It is quite likely to be costly to execute.
Understand your Buyer Groups - There will be different Buyer groups in any organization. The Purchasers who pay for the product or service may differ from the actual users, and in some cases there are important influencers as well. Although these groups may overlap, they often differ. When they do, they frequently hold different definitions of value. Look across your buyer groups and redesign the value curves to focus on a previously overlooked set of buyers.
Hidden Blue Ocean - Untapped value is often hidden in complementary products and services.The key is to define the total solution buyers seek when the choose a product or service. A simple way to do so is to think about what happens before, during and after your product is used. Can you identify and eliminate the pain points through complementary product / service offering across each stage?
Blue Ocean is not Fuzzy - The process of discovering and creating blue oceans is not about predicting or preempting industry trends. Nor is it a trial-and-error process of implementing wild new business ideas that happen to come across managers' minds or intuition. It is about reconstructing existing market elements across industry and market boundaries.
Four steps of Visualizing Strategy - Awakening, Exploration, Strategy Fair, Communication
Sequence of Blue Ocean Strategy - Determine Buyer Utility, Define (acceptable) Price, Derive Target Cost & Define ;">Adoption;"> strategy.
Typical Hurdles - Cognitive, Political, Resource, Motivational
Voluntary Cooperation - People's minds and hearts must align with the new strategy so that at the level of the individual, people embrace it of their own accord and willingly go beyond compulsory execution to voluntary cooperation in carrying it out. Voluntary cooperation is more than mechanical execution where people do only what it takes to get by. It involves going beyond the call of dury where individuals exert energy and initiative to the best of their abilities, even subordinating personal self-interest to execute resulting strategies.
3 Es of Fair Process - Engagement, Explanation & Expectations
In summary, a great book to read and have in your collection rather than renting from a library. As they say - It's a keeper!!
Happy Swimming in the Blue Ocean!!
C
