1. In the previous article we discussed the necessity
of identifying uncontested market spaces - where
competitors are rendered irrelevant.
blue ocean strategy framework
2. We discussed that in order to do this, we must pursue value
innovation - recognizing the value system behinds people's market
choices structuring enterprise resources into a superior, innovative
alternative But how? What metric do we use to build these superior,
innovations? Blue Ocean Strategy gives us this metric This metric
lets us recognize how other enterprises are positioned, and to
identify overlooked niches Position Yourself Along the
Emotional-Commodity Axis For example, products are generally
seen as either having an emotional appeal or of being merely
commodities
3. By shifting a product's position along this emotional-commodity
metric, we often find the uncontested market space we're looking for
As an example, investment advise has traditionally had a heavy
emotional element, heavily based on a personal relationship and
trust between the client and the broker However, enterprises like
Charles Schwab and Vanguard Mutual funds, by shifting their
offerings more towards the commodity end - offering low-cost,
no-frills service - have acquired a huge customer base, people
uninterested in the traditional niceties of investment management
companies Focus on Buyers, Users, or Influencers Another metric is
customer type
4. Customers can be divided into buyers, users, and influencers By
switching focus from one customer type to another, competitors can
often be completely outflanked When the financial information
vendor, Bloomberg, started, most financial information systems
providers focused on buyers
5. These buyers - purchasing agents in IT departments - tended to
value low price and standardized easily maintained machines
Bloomberg, however, recognized that the users - the traders - were
people with high disposable income but little time He added
features to allow them to do online shopping during downtime on the
trading floor
6. He also added features for easy financial calculations - features
most IT purchasing agents were oblivious to Think in Terms of
Product Line Rather Than Product A corollary of Blue Ocean
Strategy is to improve marketing efficiency and drastically reduce
cost structure by thinking in terms of product line rather than product
Doing so, marketing efforts are not wasted because of the failure of a
particular offering
7. For example, when Fred Weiss started his web site AllMath com, a
site devoted to math puzzles and exorcises, he met with limited
success He went on to start AllWords
8. com, which also had limited success However, he struck it big when
he started AllLottery com, a provider of nationwide lottery data,
partially due to the branding of the word "All
9. " Another example is Black and Decker, the power tool company
Faced with increasing competition and unable to anticipate whether
the market would demand electric drills or electric hammers etc from
year to year, they instead built a "meta" tool
10. A power tool platform which could easily be extended as an electric
hammer or electric drill or any one of their blue ocean strategy
framework tool line This meta-product approach, with its
standardized parts and flexibility, gave Black and Decker a cost
structure far superior to their competitors
