I am reading the book Blue Ocean Strategy. It centers on the metaphor that red oceans represent the market space where all of your competitors operate. It is red, because it is bloody with competition. (sorry about the graphic imagery, I didn’t write the book!) On the other hand, blue oceans are uncontested new markets that a business can open up for itself.
In reading the book, I came upon a section that I kept reading over and over again:
“To set a company on a strong, profitable growth trajectory in the face of these industry conditions, it won’t work to benchmark competitors and try to outcompete them by offering a little more for a little less. Such a strategy may nudge sales up but will hardly drive a company to open up uncontested market space. Nor is conducting extensive customer research the path to blue oceans. Our research found that customers can scarely imagine how to create uncontested market space. Their insight tends toward the familiar “offer me more for less.” And what customers typically want “more” of are those products and service features that the industry currently offers.”
“To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategic focus from competitors to alternatives, and from customers to noncustomers of the industry. To pursue both value and cost, you should resist the old logic of benchmarking competitors in the existing field and choosing between differentiation and cost leadership. As you shift your strategic focus from current competition to alternatives and noncustomers, you gain insight into how to redefine the problem the industry focuses on and thereby reconstruct buyer value elements that reside across industry boundaries. Conventional strategic logic, by contrast, drives you to offer better solutions that your rivals to existing problems defined by your industry.”
So what does this mean? Honestly, I don’t really know, but it does spark an interesting new way of thinking. I spend a lot of time reading about how publishing and media are in a period of transition. Newspapers, magazines, record labels, television stations, creators of all kinds of media are working to protect the core value they have created for generations, yet find new business models that leverage the changing ways that people access, create, and purchase all forms of information and media.
There are so many businesses out there who are trying to innovate – to match the needs of their industry with a solid business model. It’s an incredible time to watch these changes occur, as new markets open up with exciting new products and services we never thought possible.
A book like Blue Ocean Strategy allows me to take a step back and view it all from a new angle. There are tons of business books like this one, some better than others, with many “flavors of the month” in terms of “hot” business strategies. But to me, it is less about the theory, than thinking about each industry as a community that is constantly changing to better meet everyone’s needs.