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“This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” Vice AdmiralJames Bond Stockdale (December 23, 1923–July 5, 2005) Source: Good to Great, Jim Collins
Today’s Realities Midst of a worldwide recession Other forms of communication are proving effective and cost efficient Overall print volume is shrinking Price of print is declining Operating costs continue to increase Costs have been cut to highest levels Smaller businesses do not have the critical mass to be profitable in a commodity market The printing industry will look very different at the end of this recession
To Survive and Thrive Increase profitable sales Print as a stand alone medium is becoming marginalized Profit comes from creating value The industry must find NEW ways to create value Those ways will cannibalize our traditional business We need Blue Ocean!
Blue Ocean Strategy Value Innovation – focus is not on beating the competition but rather making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up “new and uncontested market space.”
The DIP Quit the wrong stuff Stick with the right stuff Have the guts to do one or the other
Why? We forget Why were here What we want to accomplish Why people will buy from us
Your Competitive Advantages Differentiate your company Give people a reason to buy from you Help you stay focused
Jay B. Barney “A firm is said to have a sustained competitive advantage when it is implementing a value-creating strategy not simultaneously being implemented by any current or potential competitors and when these firms are unable to duplicate the benefits of the strategy. Gaining and Sustaining Competitive Advantage, Jay B. Barney
True Competitive Advantages Objective, not subjective “Do business with us because we have great quality and terrific customer service.” Is quantifiable not arbitrary “95% of our business comes from referrals.” Is different from the competition Is not a cliché “We exceed customer expectations.” Sustainable!
5 Fatal Flaws of Most Companies They don’t have a competitive advantages but think they do They have a competitive advantage but don’t know what it is They know what their competitive advantage is but don’t communicate it to their clients They mistake strengths for competitive advantage They don’t concentrate on competitive advantages when making strategic and operational decisions
Another Key Concept The people who invest the time and the energy and the effort to power through the Dip become the best in the world Make the Dip longer, deeper and harder for all those who follow The ‘Right’ One
Which Dip? The mass market is dying Not just in communications in all things Today there are a million micro-markets Each micro-market has a ‘best’ Best is subjective; the customer decides
Are We Getting This? What’s Apple’s market for personal computers? “style-conscious, designer’s, multimedia, student, family computer.” They Own This One!
Blue Ocean: Value Innovation Creates value simultaneously for both the buyer and the company Occurs when companies align innovation with utility, price and cost positions. Requires companies to orient the whole system toward achieving a leap in value for both buyers and themselves. Believes that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players.
What’s Remarkable Criticizes Michael Porter’s idea that successful businesses are either low cost providers or niche-players Proposed instead that value can be found by crossing conventional market segmentation and value and lower cost.
How? The innovation raises and creates value for the market while, simultaneously reducing or eliminating features or services that are less valued by the current or future market.
Southwest Airlines Emphasize friendly service, speed, and frequent point to point departures Focus Price against car transportation No extra investments in meals, lounges, and seating choices Divergence
The Final Test… Compelling Tagline Delivers a clear message Advertises an offering truthfully Promotes interest and trust from customers "The speed of the plane at the price of the car—whenever you need it." Southwest Airlines
A New Breed of Company High Service Offering Low
Capitalizes on Trends Movement away from TV, Radio, Print advertising Focus on digital media New media – social media Provides automation for faster implementation and analysis Need to integrate all channels
Now Let’s Add the Spice Ingredients: the right ‘micro’ niche Clear competitive advantages Remark-ability
Blue Ocean Cross channel communication Integrated channels Direct mail Email Landing pages Search Engine Optimization Social Media Cell video Automated tracking Campaign Management Marketing Automation Web to print for cross channel communication
Combined with a Micro Niche Vertical Markets Horizontal Applications Delivery channels Geographic/Regional Company Characteristics
Reinforced by Clear Competitive Advantages Know them Tell Them Keep Them