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By Jonathan Gibson
Blue Ocean Strategy(BOS) is a fabulous book filled with tools and insights on how to run a successful business by steering away from the competition. BOS provides simple frameworks such as the strategy canvas (SC), the four actions framework (4A), six paths (6P), and others that make strategy and strategic marketing easy to understand and easy to communicate. The following is a summary of my question, new thoughts, and reaffirmations after reading the first 3 chapters. QUESTION:
The crux of the Blue Ocean Strategy (BOS) is to differentiate a company’s product and service offerings (offerings) so as to avoid direct competition; thus freeing the company to ‘compete’ in an uncontested blue ocean of opportunity. At first this may sound obvious, I mean differentiation is the crux of marketing management (what do you think?); however, the usefulness of BOS lays in the frameworks and processes that allow us business strategists to systematically pursue these fruitful blue oceans.
Businesses need rules and processes to maintain their company’s relevance across all business functions from product development to marketing, to operations. The BOS Strategy Canvas (SC) organizes key competitive factors of a given industry and allows a manager to literally see where the competition is. This allows businesses to act appropriately and target the right customers. The BOS four actions (4A) framework helps managers create and focus on four key areas for action, spanning the entire firm, in one table. The book suggests that ERRC table be used to communicate the firm’s business strategy to employees and can also serve as the basis for strategic marketing plans! How many of you wish you could see your employer’s strategy? Another tool is the Blue Ocean Strategy six paths (6P), which provides a deeper investigation of six areas that red ocean (head to head competition) businesses generally overlook, yet still provides a simple systematic format for carrying-out this important market analysis. A manager can go through all six paths and create a map of value to pursue through the ERRC (4A) action framework. The six paths and all the other BOS tools can be found here.
BOS has reaffirmed several of my key business principles such as the idea of thinking systematically, establishing processes to live by, thinking about non-customers as opportunities (I naturally think about the outcasts as friends), remembering that extensive customer research is not always the way to new products, and that businesses are best run as friendships between customers and firms (Kim 2005). Going back to my question of differentiation, remember that successful businesses often do things differently; they get away from established industry norms. BOS is all about ‘creative destruction.’ The idea: companies must continually pioneer their strategies. We must go and systematically search for new ideas to make our businesses last. If you are looking to take your business or business ideas to the next level, I recommend reading Built to Last, by Jim Collins and Jerry Porras, in conjunction with Blue Ocean Strategy.
Like a good trainer or a good coach, BOS pushes strategists and marketers to be disciplined and to look far and wide for value-creating opportunities. Following these processes takes a lot of hard work but doing so will yield profitability and fulfillment and will likely lead to long-term, win-win outcomes for businesses and customers. These are the principles I have studied at Presidio Graduate School; would you like to learn more? Feel free to reach out to the school for more information or to contact me with any of your thoughts on this article or any other sustainable business topic. I look forward to hearing from you and hope to see you in the sustainable business community again soon.
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