Creating Blue Oceans

Perfect Calm Series: The D.I.Y. Foreign-Aid Revolution

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.

This week we select the story: The D.I.Y. Foreign-Aid Revolution

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 New York Times.]

Re-define the rules of competition

Companies today, facing an environment of great uncertainty, need to embrace the idea of challenging traditional industry assumptions.  This perspective of defying conventional wisdom goes hand-in-hand with the process of Blue Ocean Strategy, which is a systematic approach to turning unconventional ideas into winning strategies. This week, to provide some inspiration, we feature an example of  Defying Conventional Wisdom.

For our example, we turn to a recent article highlighting the Blue Ocean Strategy success stories like Apple and Samsung.  Through their pioneering efforts to defy conventional industry wisdom, these companies are making the competition irrelevant.  

From Khalij Times:

How did Apple forecast that we’d pine for the iPhone 4 despite the bad press? After all, fans were just coming off their highs from embracing the iPad. And how did du pull off its unique positioning as a lower cost alternative without sacrificing profits? Or how did Samsung succeed with its entirely new smartphone platform, “bada,” in a seemingly saturated market dominated by iPhone, Android and Blackberry?

Smart enterprises engage their customers in regular dialogue to ascertain what would excite them beyond what’s currently available. The ones that crack consumer demand are those that identify wants and needs that customers don’t even know they have. By challenging the assumptions of their industry incumbents, these companies virtually eliminate competition, because they actually redefine the benchmarks for their kind of product. Such market dominance is achieved by these companies adopting the “Blue Ocean” strategy, a new management metaphor causing a sea of change in technology innovation worldwide.

[Image via Flickr.]

Blue Ocean Strategy: Third-Tier Noncustomers

Continuing in our series on how to reach beyond existing demand, our focus advances to the final group of ‘noncustomers’—called Third-Tier Noncustomers.  Once featured, each entry from this series is made accessible through the Blue Ocean Strategy Basics archive.  For an overview of Third-Tier Noncustomers, we turn to pages 109 — 110 of the book Blue Ocean Strategy (co-authored by Professors W. Chan Kim and Renée Mauborgne):

The third tier of noncustomers is the farthest away from an industry’s existing customers. Typically, these unexplored noncustomers have not been targeted or thought of as potential customers by any player in the industry. That’s because their needs and the business opportunities associated with them have somehow always been assumed to belong to other markets.

It would drive many companies crazy to know how many third-tier noncustomers they are forfeiting. Just think of the long-held assumption that tooth whitening was a service provided exclusively by dentists and not by oral care consumer-product companies. Consequently, oral care companies, until recently, never looked at the needs of these noncustomers. When they did, they found an ocean of latent demand waiting to be tapped; they also found that they had the capability to deliver safe, high quality, low-cost tooth whitening solutions, and the market exploded.

This potential applies to most industries.

Related links:

Buy the Blue Ocean Strategy book

[Image via Flickr.]

Slingshot Living Radio – Featured Visionary: Razi Imam

TUNE IN TODAY for the broadcast of Slingshot Living Radio with featured visionary Razi Imam, award-winning entrepreneur, best-selling author and innovator, and find out the answer to the question:

What are the key inner qualities that great visionaries and trailblazers share?

What if you could re-engage your childhood creativity and sense of limitless possibilities – in order to overstep perceived limitations for continuous business and personal success?

SLINGSHOT is the first book-based journey addressing this very topic and to unfold on all media channels closest to you. With Gabor as your host, SLINGSHOT appears through national radio and online TV shows, downloadable text, live events, printed article series, accompanying illustrations and music.

Watch, listen, play, join fascinating personalities and apply concepts yourself that are helping to shape the world through meaningful creativity and innovation.

 

Let’s just stick with it

Companies today, facing an environment of great uncertainty, need to embrace the idea of challenging traditional industry assumptions.  This perspective of defying conventional wisdom goes hand-in-hand with the process of Blue Ocean Strategy, which is a systematic approach to turning unconventional ideas into winning strategies. This week, to provide some inspiration, we feature an example of  Defying Conventional Wisdom.

For our example, we turn to a recent article from the world of technology, and Cisco’s re-imagining of server technology and how it operates in a system. 

From Business Wire Market Watch:

One of the truths of life is nothing great is ever achieved by playing it safe. Look at Christopher Columbus. It would've been easy for him to say "Hey, you know what? That trade route to India around the Cape of Good Hope seems to be working alright. Let's just stick with it." Instead, thinking there might be a faster, more direct route to India, he pointed his ships westward. It seemed to work out pretty well for him….

Like Columbus, Cisco has chosen to defy conventional wisdom by trying a new approach rather than simply following the crowd. And also like Columbus, that bold move has proven itself to be a smart one that is paying huge dividends to UCS customers.

[Image via Flickr.]

 

Blue Ocean Strategy: Second-Tier Noncustomers

Continuing with our series on how to reach beyond existing demand, our focus shifts to Second-Tier Noncustomers. Once featured, each entry is made accessible through the Blue Ocean Strategy Basics archive.  For an overview of Second-Tier Noncustomers, we turn to pages 104 — 106 of the book Blue Ocean Strategy (co-authored by Professors W. Chan Kim and Renée Mauborgne):

These are refusing noncustomers, people who either do not use or cannot afford to use the current market offerings because they find the offerings unacceptable or beyond their means. Their needs are either dealt with by other means or ignored. Harboring within refusing noncustomers, however, is an ocean of untapped demand waiting to be released.

Consider how JCDecaux, a vendor of French outdoor advertising space, pulled the mass of refusing noncustomers into its market. Before JCDecaux created a new concept in outdoor advertising called “street furniture” in 1964, the outdoor advertising industry included billboards and transport advertisement. Billboards typically were located on city outskirts and along roads where traffic quickly passed by; transport advertisement comprised panels on buses and taxies, which again people caught sight of only as they whizzed by.

This gave it the idea to provide street furniture, including maintenance and upkeep, free to municipalities. JCDecaux figured that as long as the revenue generated from selling ad space exceeded the costs of providing and maintaining the furniture at an attractive profit margin, the company would be on a trajectory of strong, profitable growth. Accordingly, street furniture was created that would integrate advertising panels. In this way, JCDecaux created a breakthrough in value for second- tier noncustomers, the municipalities, and itself. The strategy eliminated cities’ traditional costs associated with urban furniture. In return for free products and services, JCDecaux gained the exclusive right to display advertisements on the street furniture located in downtown areas. By making ads available in city centers, the company significantly increased the average exposure time, improving the recall capabilities of this advertising medium. The increase in exposure time also permitted richer contents and more complex messages. Moreover, as the maintainer of the urban furniture, JCDecaux could help advertisers roll out their campaigns in two to three days, as opposed to fifteen days of rollout time for traditional billboard campaigns.

In response to JCDecaux’s exceptional value offering, the mass of refusing noncustomers flocked to the industry…. Today, JCDecaux is the number one street furniture-based ad space provider worldwide.

Related links:

Buy the Blue Ocean Strategy book.

[Image via Guardian UK.]

Slingshot Living Radio – Featured Visionary: Rob Bell

TUNE IN TODAY for the broadcast of Slingshot Living Radio with featured visionary Rob Bell, best-selling author, orator, and recognized as one of the top-10 young spiritual leaders in America, and find out the answer to the question:

How can spiritual connectivity remain lifestyle-driving today?

What if you could re-engage your childhood creativity and sense of limitless possibilities – in order to overstep perceived limitations for continuous business and personal success?

SLINGSHOT is the first book-based journey addressing this very topic and to unfold on all media channels closest to you. With Gabor as your host, SLINGSHOT appears through national radio and online TV shows, downloadable text, live events, printed article series, accompanying illustrations and music.

Watch, listen, play, join fascinating personalities and apply concepts yourself that are helping to shape the world through meaningful creativity and innovation.

Trading Moss: Patriots defy conventional wisdom

Companies today, facing an environment of great uncertainty, need to embrace the idea of challenging traditional industry assumptions.  This perspective of defying conventional wisdom goes hand-in-hand with the process of Blue Ocean Strategy, which is a systematic approach to turning unconventional ideas into winning strategies. This week, to provide some inspiration, we feature an example of  Defying Conventional Wisdom.

For our example, we turn to a recent article from the world of sports about recent trades of players by American football teams. The Patriots and the Eagles are setting themselves apart from the pack by making well thought out, proactive trades, that tend to defy conventional wisdom as opposed to the more reactive kinds of trades common to professional sports.

Via NFL.com :

Whether you love both deals [trading star players Randy Moss and Donovan McNabb] -- few fans seem to -- or hate them, you can't deny that the Bill Belichick and Andy Reid/Joe Banner philosophies of defying conventional wisdom, always keeping one eye on the future and making moves that resonate far beyond the here and now, has helped enable them to win as many games as they have. They're willing to absorb some short-term pain -- unlike the Redskins and Vikings -- paying as much attention to 2012 and 2013 as they are on the present.

"You don't win as many games as Philadelphia and New England have the last 10 years without being willing to sacrifice something here and there," said one longtime NFL executive. "New England is not a better football team without Moss, but Bill realizes he is rebuilding his program from within and he's looking at sustaining his product. You need draft choices to do that.

“In the short term it might hurt, but they know the blueprint for sustaining success….”

[Image via Jazzypam.]

Blue Ocean Strategy: First-Tier Noncustomers

Continuing in our series which takes a closer look at reaching beyond existing demand, our focus advances to First-Tier Noncustomers. Once featured, each entry is made accessible through the Blue Ocean Strategy Basics archive of our site.  For an overview of how to target First-Tier Noncustomers, we turn to pages 104 — 106 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne):

These soon-to-be noncustomers are those who minimally use the current market offerings to get by as they search for something better. Upon finding any better alternative, they will eagerly jump ship. In this sense, they sit on the edge of the market. A market becomes stagnant and develops a growth problem as the number of soon-to-be noncustomers increases. Yet locked within these first-tier noncustomers is an ocean of untapped demand waiting to be released.

Consider how Pret A Manger, a British fast-food chain that opened in 1988, has expanded its blue ocean by tapping into the huge latent demand of first-tier noncustomers. Before Pret, professionals in European city centers principally frequented restaurants for lunch. Sit-down restaurants offered a nice meal and setting. However, the number of first-tier noncustomers was high and rising. Growing concerns over the need for healthy eating gave people second thoughts about eating out in restaurants. And professionals did not always have time for a sit-down meal. Some restaurants were also too expensive for lunch on a daily basis. So professionals were increasingly grabbing something on the run, bringing a brown bag from home, or even skipping lunch.

These first-tier noncustomers were in search of better solutions. Although there were numerous differences across them, they shared three key commonalities: They wanted lunch fast, they wanted it fresh and healthy, and they wanted it at a reasonable price.

The insight gained from the commonalities across these first-tier noncustomers shed light on how Pret could unlock and aggregate untapped demand. The Pret formula is simple. It offers restaurant-quality sandwiches made fresh every day from only the finest ingredients, and it makes the food available at a speed that is faster than that of restaurants and even fast food. It also delivers this in a sleek setting at reasonable prices.

Related links:

Buy the Blue Ocean Strategy book

[Image via jive turkey.]

Slingshot Living Radio – Featured Visionary: Daniel Levine

TUNE IN TODAY for the broadcast of Slingshot Living Radio with featured visionary Daniel Levine, Founder of the Avant-Guide Institute and expert on consumer marketing, travel and tourism and global social trends, and find out the answer to the question:

What new lifestyle trends should you be thinking about in the aftermath of the recent global economic crisis?

What if you could re-engage your childhood creativity and sense of limitless possibilities – in order to overstep perceived limitations for continuous business and personal success?

SLINGSHOT is the first book-based journey addressing this very topic and to unfold on all media channels closest to you. With Gabor as your host, SLINGSHOT appears through national radio and online TV shows, downloadable text, live events, printed article series, accompanying illustrations and music.

Watch, listen, play, join fascinating personalities and apply concepts yourself that are helping to shape the world through meaningful creativity and innovation.