Let me ask you a question: What do Viagra and Sesame Street have in common? What do iTunes and Bloomberg have in common with Cirque du Soleil?
Each of these companies created a new market space without disrupting an existing market space.
Each one lowered costs while increasing differentiation.
As you know, we have all been told that you can either have scale and consolidate with low fixed costs or you can be a boutique, highly customized, with high fixed costs.
Michael Porter told us that we had to choose either low-cost leadership or differentiation-based leadership.
But what if you - as a vendor - could deliver more value even though your costs went down?
Welcome to Blue Ocean Breakthrough, which enables us to provide BOTH low cost and better differentiation.
What you will hear today has been developed by professors who dreamed up Blue Ocean Strategy by studying 30 industries as they made 150 moves over 100 years.
Core idea: From market share to market creation, create your own blue ocean of new and uncontested market space.
Consider a buyer's experience of a product….Naked Conversations!
Why is this important to you? Because there are too many players in your world: supply exceeds demand. People are swarming around in your sandbox. This applies to more and more industries today.
Rather than finding ways to compete with companies that are already established in the market, you seek to find consumers that have been neglected, or are currently being underserved. By expanding your efforts in those areas, you could potentially access more consumers with fewer competitors.
Identify new demand, unlock hidden opportunities and redefine market boundaries.
Here's where you start.
Consider a buyer's experience of a product, from purchase to disposal, and any annoyances that that experience might present. You may well discover that you are making their lives unnecessarily difficult.
What are the major needs of your industry and how are alternate industries solving this need?
Can you move up or down the buyer chain, talking to upscale, midscale or downscale buyers?
Can you diverge or step away from where your industry typically focuses?
A conductor who moved a national youth orchestra from music excellence to ambassadors for peace, even inspiring enemy musicians to play together.
Blue ocean opportunities are everywhere…both established industries and new players can create new market space.
iTunes= in 2003 offered legal, easy-to-use, and flexible à la carte song downloads… iTunes broke a key customer annoyance factor: the need to purchase an entire CD when they wanted only one or two songs on it.
Bloomberg offering stock traders a leap in value, one with easy-to-use terminals and specially labeled keyboards
Canon shifted the copier industry from corporate purchasers to end users. With small, easy-to-use desktop copiers
Starbucks implemented the Blue Ocean Strategy successfully by becoming a social venue, not just a coffee shop.
Blue Ocean is a framework for structured, creative thinking, along with a set of tools and guidelines that minimize the risks of venturing into new waters. I'm handing one of those tools and guidelines out right now.
A blue ocean strategy is a leap beyond the existing industry norms.
It makes competition on the existing frontier irrelevant. That's why you're here today: to make your competition irrelevant.
However, your blue ocean will eventually attract competitors and the sea will turn red. So you have to constantly innovate and keep developing fresh iterations of your blue ocean strategy.