Applying Blue Ocean Strategy
A Case Study about Smartpen
Mark Parker
mparker@smartselling.com
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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.
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• 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
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• 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:
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Background ‐ Smartpen
• Smartpen is an Australian business that sells the
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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
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• The start up model could be described as
‘bootstrapping the business’

The Problem

The Problem
• The competition arrived shortly after Smartpen launched
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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
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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
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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
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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
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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
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Strategy steps:
1. Visual Awakening
2. Visual Awareness
2 Visual Awareness
3. Socialising the Strategy (Strategy Fair)
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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
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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
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What Does This Tell Us?
• Smartpen had little opportunity to differentiate
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• Officeworks controlled the factors that could most
damage Smartpen’s ability to remain in the market
• Retail Location
Retail Location
• Above the line advertising
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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
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enthusiasm.
• I b i
In business, who spends a lot of time taking notes or
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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).
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• 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
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Action Framework

Step 3 – Visual Strategy Creation

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

The Strategy Fair
• The To‐Be Strategy Canvas was successfully validated
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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
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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:
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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
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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
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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
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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
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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.
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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
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Other Background
Smartpen:
• Based in Brisbane, Smartpen supplies the Livescribe Pulse
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Smartpen throughout Australia and New Zealand.
Smart Selling:
• Provided the Blue Ocean Strategy and Social Media expertise
to Smartpen.
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• 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