In these Tough Times, what is your Blue Ocean Strategy?

In todays tough times, those that reinvent themselves and adapt will excel. As Darwin rightly says, it is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change. When we think of strategy, we think of Michael orters classic definition! "strategic positioning is a#out doing different things or performing similar activities in different ways.$ %e &uotes the example of '. '. Donnelley ( )ons *ompany, who were excellent in achieving organi+ational efficiencies in its commercial printing #usiness #ut failed to adapt &uickly enough to adapt to the onset of *D 'om duplication. %ence, a leading glo#al commercial company had to downsi+e rapidly and restructure completely in order to survive. Most companies try to outperform their rivals through incremental changes in price or &uality , assessing what their competitors do and striving to do the same things #etter. *ost and value are seen as trade,offs. As the market space #ecomes more crowded, supply overtakes demand causing products and services -ust #ecome commodities, encouraging price wars and duplication among rivals. .aining market share #ecomes the norm and profits gradually diminish across the entire industry. An example of this can #e found in the airline industry where price wars resulted in numerous #ankruptcies in many smaller airlines over the last /0 months. We have all #een aware of those poor unfortunates stranded with children and grandparents in *anada, .reece or 1rance, as the airlines no longer has the funds to fly them home. *ontrast this with the likes of )outhwest Airlines, who focus heavily on price and convenience, sensitive customers. 2hey consistently outperform rival operators as their whole #usiness id focused on performing their activities very differently from competitors. What is a blue ocean strategy anyway? W. *han 3im and 'enee Mau#orgne, %arvard 4usiness )chool ress have descri#ed a new way forward, called 4lue 5cean )trategy,moving into new innovative areas where there is no competition,it makes us uni&ue and "unimita#le$ as 6ay 4arney, 7899:;, would argue. 2he authors studied 8<: strategic moves in over thirty industries over the last 8:: years to determine how they #ecame successful through value innovation. 2hey discovered common factors which led to the creation of #lue oceans and the key differences separating winners from those that were -ust surviving. What is the difference between red and blue oceans? R ! O" #$ STR#T %& *ompete in existing market space 4eat the competition =xploit existing demand Make the value,cost trade,off Align the whole system of a firms activities with its strategic choice of differentiation or low cost B'( O" #$ STR#T %& *reate uncontested market space Make the competition irrelevant *reate and capture new demand 4reak the value,cost trade,off Align the whole system of a firms activities in pursuit of differentiation and low cost

Markets that are well explored and already crowded with competitors are called >red oceans>. 2hey are called red #ecause the only way to increase profits is #y taking away market share from the competition. 2his usually results in #loody #attles where few companies emerge unscathed. %owever, since the dominant focus of strategy research has #een on competition, #ased red ocean strategies, this is not uncommon or unexpected. >4lue oceans> are uncontested market space , pools of demand and customers that have not #een reached #y any competitor. 4lue oceans have always #een around. 2he advances made #y )teve 6o#s in Apple *omputers with the ?ipod, ?iphone and now the ?ipad were at one stage -ust a dream,now they have changed how we listen to music and communicate glo#ally. 2his is a great example of where creative thinking ignores conventional wisdom and current product design. What is the differentiator in your #usiness@