Blue Ocean Strategy - An Australian Case Study

Applying Blue Ocean Strategy A Case Study about Smartpen Mark Parker mparker@smartselling.com p @ g

Introduction • This presentation covers how Smart Selling used Blue Ocean Strategy so as to create a sustainable business for Smartpen Australia. • This version of the presentation includes explanation of the core components of Blue Ocean Strategy. • Certain images within this presentation are owned by UCSI‐BOSRC and Blue Ocean Strategy. O St t • The Blue Ocean Strategy book is available from most good bookstores and Amazon

Background ‐ Livescribe • The Pulse Smartpen was launched in 2007 in the US p • http://www.livescribe.com • The Pulse Smartpen is a computer in a pen. It captures audio and synchronises this to what you are writing. • The Pulse Smartpen has won international acclaim, including: g

Background ‐ Smartpen • Smartpen is an Australian business that sells the p Livescribe Pulse Smartpen • http://www.smartpen.com.au • Smartpen was the first reseller to offer Livescribe for sale in Australia. in Australia • Smartpen has no retail presence – it’s a pure online store p p p • The start up model could be described as ‘bootstrapping the business’

The Problem

The Problem • The competition arrived shortly after Smartpen launched p y p online sales. It was announced that the Pulse Smartpen would also be sold through Officeworks • Officeworks are a national retail office supplies chain similar to Staples similar to Staples • Officeworks could spend more on above the line p marketing and could out‐discount • Officeworks had the retail presence to better capture impulse buyers

The Solution • Smartpen wasn’t in a position to compete on traditional ‘red ocean’ terms red ocean terms Going head to head wasn’t an option. They would’ve g p y destroyed us K. Palmer – Sales Manager Smartpen • Smart Selling suggested using Blue Ocean Strategy – Smart Selling suggested using Blue Ocean Strategy – focusing on value innovation rather than head to head competition p

The Solution • The Pulse Smartpen had significant hidden potential – The Pulse Smartpen had significant hidden potential – the question for Smartpen was whether they could tap into that potential p Don’t Compete with Rivals, Make Them Irrelevant www.blueoceanstrategy.com

Blue Ocean Strategy & Value Innovation

The Importance of Value Innovation • Focusing on value innovation is central to what Smartpen Focusing on value innovation is central to what Smartpen sought to achieve. • Save costs by eliminating and/or reducing the barriers for non‐customers • Lift value by raising or creating elements the industry has not offered has not offered Don’t Compete with Rivals, Make Them Irrelevant www.blueoceanstrategy.com

Using Blue Ocean Strategy • Smart Selling worked with Smartpen through the core g p g Strategy steps: 1. Visual Awakening 2. Visual Awareness 2 Visual Awareness 3. Socialising the Strategy (Strategy Fair) g gy ( gy ) 4. Execution of the Strategy

Step 1 – Visual Awakening

Step 1 – Create an As‐Is Strategy Canvas • The strategy canvas is both a diagnostic and an action gy g framework. • It captures the current state of play • It’s also used to create the To‐Be canvas • Looking at the current market we created an As Is Looking at the current market we created an As‐Is strategy canvas.

Step 1 ‐ Visual Awakening • The As‐Is strategy canvas looked like this gy

What Does This Tell Us? • Smartpen had little opportunity to differentiate p pp y • Officeworks controlled the factors that could most damage Smartpen’s ability to remain in the market • Retail Location Retail Location • Above the line advertising g

Step 2 – Visual Exploration

Visual Exploration – Six Paths Analysis • As Smartpen transitioned into the Exploration stage, time was spent on the Six Paths Analysis – l k h h l looking across alternate industries, groups, products and services • This analysis identified: • Apple stores – how they harness desire and pp y enthusiasm. • I b i In business, who spends a lot of time taking notes or h d l f i ki minutes? • How do the sub groups of educators work and communicate

Step 2 ‐ Visual Exploration • From this study we identified a number of new customer segments (see diagram). ( d ) • Our focus shifted to what barriers existed for these non‐ customers

What Did We Hear from Non‐Customers? • What does it do? • I work in a small rural school. How do we buy one? • This is my job. Will it help? • Can I use the pen to create mini tutorials for my students? • I work with students from non‐English speaking backgrounds; how will this help? • Will it work with this third party application? Will it work with this third party application?

Step 3 ‐ Visual Awareness – ERRC Grid • Our field research led us to develop the following Four p g Action Framework

Step 3 – Visual Strategy Creation

Visual Strategy Creation – To‐Be Canvas • Through a series of iterations a To Be Strategy Canvas was g gy developed

The Strategy Fair • The To‐Be Strategy Canvas was successfully validated gy y with all stakeholders. • Executing the strategy involved two things: 1. Changes to the core Smartpen site 1 Changes to the core Smartpen site 2. Development and execution of a social media p strategy

Creating the Blue Ocean • The Blue Ocean for non‐customers was in the social sphere – using social technologies to remove the barriers for these non‐customers so they could become customers • To do this Smartpen focused on a social media strategy To do this, Smartpen focused on a social media strategy that would allow it to connect with these non‐customers

Blue Ocean Strategy & Social Media • At the core of the strategy were principles that included: gy p p 1. Listening – initially passive but soon conversational listening 2. Be in their social space – go out to their worlds and contribute. 3. 3 Help everyone – even if they didn’t purchase from Smartpen – Help everyone even if they didn’t purchase from Smartpen help them anyway 4. Encourage Innovation – encourage users to innovate; crowdsource how and where the product could be developed 5. Be Patient – being social builds loyalty. It won’t happen overnight but it will happen

Social Media Strategy This is one way of looking at the strategy Out here we listen and learn The destination The tools to facilitate the dialogue SMARTPEN

Social Media – Listen and Learn Goal – Listen to the community and learn from them y Strategy 1. We use tools like Google Alerts, Twitter, and Scout Labs to listen to the conversation 2. Scout Labs has proven more effective as we can track sentiment 3. Twitter search is good for Twitter specific traffic

Social Media – Engage. Dialogue Goal – Go into the social world and engage g g Strategy 1. We contribute advice and knowledge in specific social networks and forums 2. Be very diligent about not trying to sell 3. If we can’t meet their immediate need – send them to where they can (i.e. the enemy)

Social Media – Encourage Innovation Goal – Capture innovative uses of the Livescribe Smartpen p p Strategy 1. By engaging with users we capture examples of how the Smartpen is being used 2. Twitter, the blog, and Facebook attract users who want to share ideas and experiences p

Summary Problem: Smartpen needed to compete against a major legacy retailer for sales of the Livescribe Pulse Smartpen Solution: 1. Smartpen used Blue Ocean Strategy to identify non‐ customers and the barriers that prevented them becoming customers. b i 2. Social Media provided the means to capture these non 2 Social Media provided the means to capture these non‐ customers and create a blue ocean outcome

Acknowledgements Blue Ocean Strategy: • Special thanks to Phillip Ng and his team from USCI‐BOSRC l h k h ll dh f • Copyright for many of the standard Blue Ocean Strategy images in this presentation are owned by USCI‐BOSRC. • Phillip can be contacted on (03) 9854 6166 phillipng@ucsi‐bosrc.com Blue Ocean Strategy: • Visit their website – www.blueoceanstrategy.com Contacts: • Mark Parker – Smart Selling – mparker@smartselling.com Twitter ‐ Twitter @smartselling (0414) 72 5549 • Contact Smart Selling if you’re interested in learning how Blue Ocean Strategy could help your business O S ld h l b i

Other Background Smartpen: • Based in Brisbane, Smartpen supplies the Livescribe Pulse d b l h b l Smartpen throughout Australia and New Zealand. Smart Selling: • Provided the Blue Ocean Strategy and Social Media expertise to Smartpen. p • Based in Brisbane Smart Selling is focused on delivering innovation through the use of Blue Ocean Strategy and social business design business design • Smart Selling has since made a financial investment in Smartpen

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Blue Ocean Strategy - An Australian Case Study

by Smart Selling on Oct 06, 2009

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Blue Ocean Strategy - An Australian Case Study — Presentation Transcript