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Why is sports the only profession where businesses actively trade employees with their direct competitors? There are frequent transactions between professional teams swapping athletes around. But we never hear, for example, of a high profile, veteran real estate agent being dealt from one agency to another in exchange for a couple of young prospects.
[Image via Pop Art Machine.]
As part of our Blue Ocean Strategy Basics series, over the course of the next six weeks we will highlight each of the Six Paths. These paths challenge the six fundamental assumptions underlying many companies’ strategies. Once published, each path will then become accessible in the Blue Ocean Strategy Basics archives. Today we turn to page 49 – 50 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne) for the first Path:
In making every purchase decision, buyers implicitly weigh alternatives, often unconsciously. Do you need a self-indulgent two hours? What should you do to achieve it? Do you go to movie, have a massage, or enjoy reading a favorite book at a local café? The thought process is intuitive for individual consumers and industrial buyers alike.
For some reason, we often abandon this intuitive thinking when we become sellers. Rarely do sellers think consciously about how their customers make trade-offs across alternative industries. A shift in price, a change in model, even a new ad campaign can elicit a tremendous response from rivals within an industry, but the same actions in an alternative industry usually go unnoticed. Trade journals, trade shows, and consumer rating reports reinforce the vertical walls between one industry and another. Often, however, the space between alternative industries provides opportunities for value innovation.
Consider NetJets, which created the blue ocean of fractional jet ownership. In less than twenty years NetJets has grown larger than many airlines, with more than five hundred aircraft, operating more than two hundred fifty thousand flights to more than one hundred forty countries. Purchased by Berkshire Hathaway in 1998, today NetJets is a multibillion-dollar business, with revenues growing at 30–35 percent per year from 1993 to 2000. NetJets’ success has been attributed to its flexibility, shortened travel time, hasslefree travel experience, increased reliability, and strategic pricing. The reality is that NetJets reconstructed market boundaries to create this blue ocean by looking across alternative industries.
Buy the Blue Ocean Strategy book.
[Image via AppInsight.]
A recent article highlights the absurd, red-ocean mentality of razor manufacturers and the push-back by fed-up consumers. Instead of tangible lifestyle enrichment, industry players continue to focus on increasing the number of blades and the price of their products.
As blades grow more expensive, they are increasingly kept under lock and key. A frustrating attempt to find a drug-store employee to unlock the blades case prompted Nick Meyers to give up his four-bladed Schick Quattro several months ago."It's easier to buy uranium," Mr. Meyers says. "They're so expensive, they have to keep them locked up, and that's when I realized what a gimmick all of it is."
[Image via Yahoo! .]
What is the Six Paths Framework, and how can it be used to reconstruct market boundaries in order to break from competition and create Blue Oceans? As part of our ongoing Blue Ocean Strategy Basics series, we turn to pages 47 – 48 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne), for the origin of the Six Paths Framework:
We found clear patterns for creating blue oceans. Specifically, we found six basic approaches to remaking market boundaries. We call this the six paths framework. These paths have general applicability across industry sectors, and they lead companies into the corridor of commercially viable blue ocean ideas. None of these paths requires special vision or foresight about the future. All are based on looking at familiar data from a new perspective.
Related links:
Buy the Blue Ocean Strategy book.
[Image via IDG.]
We’ve previously shared inspiring stories on how Blue Ocean Strategy can be tapped by artists to craft entirely new marketspaces. In fact, the leading off-Broadway theater group Naked Angels continues to benefit from its exploration of blue oceans since their seminal session with Gabor. Related to the application of Blue Ocean Strategy in art, we share a recent article from one artist describing how Nike was able to align itself with art to create an entirely new community of buyers.
Blue Ocean Strategy. Nike famously went from being a shoe company to being a global brand by doing things that no other company would have thought of doing. In addition to having a great product, Nike was one of the first companies to partner with graffiti artists to design their shoes. Nike now has a long-standing connection with the hip-hop community that has been a huge boost to their sales. It was risky for Nike to do, but they looked at what artists were doing and saw the underlying movement that they could align with.
[Image via Abdalla1.]
Continuing with the next installment in our Blue Ocean Strategy Wisdom series, this week we move to the fourth and final action in the Four Actions Framework. Once featured, each entry in this series is made accessible through the Blue Ocean Strategy Basics archive of our site. For an overview of the fourth action, 'Create,' we continue with the example of Cirque du Soleil, as depicted on pages 36 - 37 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).
Cirque du Soleil created a refined environment, multiple productions, artistic music, dance, and pageantry, thus appealing to a whole new, massive group of customers — adults and corporate clients prepared to pay a price that is several times that of traditional circuses for an unprecedented entertainment experience.Buy the Blue Ocean Strategy book.[Image via CoolYota.]
One of the most exciting spheres of application for Blue Ocean Strategy is the realm of Social Capitalism. This explosive market space is at the intersection of successful business and lasting social impact. Traditionally these two spheres were considered separate, but the two can be pursued simultaneously via Blue Ocean Strategy. Periodically, we feature stories which illustrate stimulating ventures, ideas and concepts targeting this very market space.
Do you know of other companies, organizations or business visionaries sailing along the intersection of good business and social good? Share your ideas with the Creating Blue Oceans Community.
[Image via Extra Zebra.]
We’ve regularly written about academia and its ripeness for Blue Ocean Strategy-based thinking and solutions. As a follow-on to this popular theme, we share a related article from Future Think, which recently published a great roundup on innovation in education.
From Future Think:
Microsoft’s High School of the Future – The High School of the Future is a Philadelphia public school where technology and innovation are at the core of the curriculum. A culture of innovation is developed by teaching students to learn from small failures they face on the way to achieving big successes. Students set college goals very early on and are frequently exposed to Microsoft and other large corporate sponsors to reinforce the belief that they can work anywhere and achieve anything. This year, all of the 117 graduates, most of whom are from economically-challenged West Philadelphia, have college plans.
[Image via Daniel J. Keating.]
As part of our ongoing Blue Ocean Strategy Wisdom series, we review the remaining critical actions of Blue Ocean Strategy through the example of Cirque du Soleil. Once featured, each facet in this series is made accessible through the Blue Ocean Strategy Basics archive of this site. We now move to the third action, Raise, from pages 36 - 37 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne).
Buy the Blue Ocean Strategy book.[Image via urb mtl.]
