About Blue Ocean Strategy

Companies have long engaged in head-to-head competition in search of sustained, profitable growth. They have fought for competitive advantage, battled over market share, and struggled for differentiation.

Yet in today’s overcrowded industries, competing head-on results in nothing but a bloody “red ocean” of rivals fighting over a shrinking profit pool. In a book that challenges everything you thought you knew about the requirements for strategic success, W. Chan Kim and Renée Mauborgne contend that while most companies compete within such red oceans, this strategy is increasingly unlikely to create profitable growth in the future.

Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that tomorrow’s leading companies will succeed not by battling competitors, but by creating “blue oceans” of uncontested market space ripe for growth. Such strategic moves—termed “value innovation”—create powerful leaps in value for both the firm and its buyers, rendering rivals obsolete and unleashing new demand.

Blue Ocean Strategy provides a systematic approach to making the competition irrelevant. In this frame-changing book, Kim and Mauborgne present a proven analytical framework and the tools for successfully creating and capturing blue oceans. Examining a wide range of strategic moves across a host of industries, Blue Ocean Strategy highlights the six principles that every company can use to successfully formulate and execute blue ocean strategies. The six principles show how to reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome organizational hurdles, and build execution into strategy.

Upending traditional thinking about strategy, Blue Ocean Strategy charts a bold new path to winning the future.

Value Innovation

Value Innovation is the cornerstone of blue ocean strategy. Value innovation is the simultaneous pursuit of differentiation and low cost. Value innovation focuses on making the competition irrelevant by creating a leap of value for buyers and for the company, thereby opening up new and uncontested market space. Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price and cost is aligned.

In the Blue Ocean Strategy methodology, the Four Actions Framework and ERRC grid assist managers in breaking the value-cost trade off by answering the following questions:

What factors can be eliminated that the industry has taken for granted?
What factors can be reduced well below the industry’s standard?
What factors can be raised well above the industry’s standard?
What factors can be created that the industry has never offered?

Red Ocean vs Blue Ocean


















Strategy Canvas

The strategy canvas is the central diagnostic and action framework for building a compelling blue ocean strategy. The horizontal axis captures the range of factors that the industry competes on and invests in, and the vertical axis captures the offering level that buyers receive across all these key competing factors.

The strategy canvas serves two purposes:

Firstly, it captures the current state of play in the known market space. This allows you to understand where the competition is currently investing and the factors that the industry competes on.
Secondly, it propels you to action by reorienting your focus from competitors to alternatives and from customers to noncustomers of the industry.
The value curve is the basic component of the strategy canvas. It is a graphic depiction of a company's relative performance across its industry's factors of competition.

As you can see on the diagram above, what makes a good value curve is focus, divergence as well as a compelling tagline.

4 Actions Framework

To reconstruct buyer value elements in crafting a new value curve, we use the Four Actions Framework. As shown in the diagram above, to break the trade-off between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industry's strategic logic and business model:

Which of the factors that the industry takes for granted should be eliminated?
Which factors should be reduced well below the industry's standard?
Which factors should be raised well above the industry's standard?
Which factors should be created that the industry has never offered?

ERRC Grid

The Eliminate-Reduce-Raise-Create Grid (ERRC) is complementary with the four actions framework. It pushes companies not only to ask all four questions in the four actions framework but also to act on all four to create a new value curve, essential for unlocking a new blue ocean. By driving companies to fill in the grid with the actions of eliminating and reducing as well as raising and creating, the grid gives companies four immediate benefits:

It pushes them to simultaneously pursue differentiation and low cost to break the value-cost trade off.
It immediately flags companies that are focused only on raising and creating and thereby lifting the cost structure and often overengineering products and services - a common plight in many companies.
It is easily understood by managers at any level, creating a high level of engagement in its application.
Because completing the grid is a challenging task, it drives companies to robustly scrutinize every factor the industry competes on, making them discover the range of implicit assumptions the make unconsciously in competing.

Pioneer-Migrator-Settler Map

A useful exercise for a corporate management team pursuing profitable growth is to plot the company's current and planned portfolios on the pioneer-migrator-settler (PMS) map. For the purpose of the exercise, settlers are defined as me-too businesses, migrators are business offerings better than most in the marketplace, and a company's pioneers are the businesses that offer unprecedented value. These are your blue ocean strategies, and are the most powerful sources of profitable growth. They are the only ones with a mass following of customers.

If both the current portfolio and the planned offerings consist mainly of settlers, the company has a low growth trajectory, is largely confined to red oceans, and needs to push for value innovation. Although the company might be profitable today as its settlers are still making money, it may well have fallen into the trap of competitive benchmarking, imitation, and intense price competition.

If current and planned offerings consist of a lot of migrators, reasonable growth can be expected. But the company is not exploiting its potential for growth, and risks being marginalized by a company that value-innovates. In our experience the more an industry is populated by settlers, the greater the opportunity to value-innovate and create a blue ocean of new market space.

This exercise is especially valuable for managers who want to see beyond today's performance. Revenue, profitability, market share, and customer satisfaction are all measures of a company's current position. Contrary to what conventional strategic thinking suggests, those measures cannot point the way to the future; changes in the environment are too rapid. Today's market share is a reflection of how well a business has performed historically.

Clearly, what companies should be doing is shifting the balance of their future portfolio toward pioneers. That is the path to profitable growth. The PMS map above depicts this trajectory, showing the scatter plot of a company's portfolio of businesses, where the gravity of its current portfolio of twelve businesses, expressed as twelve dots, shifts from a preponderance of settlers to a stronger balance of migrators and pioneers.

Buyer Experience Cycle / Buyer Utility Map

The buyer utility map helps to get managers thinking from the right perspective. It outlines all the levers companies can pull to deliver utility to buyers as well as the different experiences buyers can have of a product or service. This lets managers identify the full range of utility propositions that a product or service can offer. Let’s look at the map’s dimension in detail.

The six stages of the buyer experience cycle. A buyer's experience can usually be broken down into a cycle of six distinct stages, running more or less sequentially from purchase to disposal. Each stage encompasses a wide variety of specific experiences. Purchasing, for example, includes the experience of browsing Amazon.com as well as the experience of pushing a shopping cart through Wal-Mart’s aisles.

The six utility levers. Cutting across the stages of the buyer’s experience are what we call the levers of utility – the ways in which companies unlock utility for their customers. Most of the levers are obvious. Simplicity, fun and image, and environmental friendliness need little explanation. Nor does the idea that a product could reduce a buyer’s financial or physical risks. And a product or service offers convenience simply by being easy to obtain and or use. The most commonly used lever – but perhaps the least obvious- is that of customer productivity. An innovation can increase productivity by helping them do things faster, better, or in different ways. The financial information company Bloomberg, for example, makes traders more efficient by offering on-line analytics that analyze and compare the raw information it delivers.

By locating a new product on one of the 36 spaces of the buyer utility map, managers can clearly see how the new idea creates a different utility proposition from existing products. In our experience, managers all too often focus on delivering more of the same stage of the buyer’s experience. That approach may be reasonable in emerging industries, where there’s plenty of room for improving a company’s utility proposition. But in many existing industries, this approach is unlikely to produce a market-shaping blue ocean strategy.

3 Tiers of Noncustomers

Typically, to grow their share of a market, companies strive to retain and expand existing customers. This often leads to finer segmentation and greater tailoring of offerings to better meet customer preferences. The more intense the competition is, the greater, on average, is the resulting customization of offerings. As companies compete to embrace customer preferences through finer segmentation, they often risk creating too-small target markets.

To maximize the size of their blue oceans, companies need to take a reverse course. Instead of concentrating on customers, they need to look to noncustomers. And instead of focusing on customer differences, they need to build on powerful commonalities in what buyers value. That allows companies to reach beyond existing demand to unlock a new mass of customers that did not exist before.

Although the universe of noncustomers typically offers big blue ocean opportunities, few companies have keen insight into who noncustomers are and how to unlock them. To convert this huge latent demand into real demand in the form of thriving new customers, companies need to deepen their understanding of the universe of noncustomers.

There are three tiers of noncustomers that can be transformed into customers. They differ in their relative distance from your market. The first tier of noncustomers is closest to your market. They sit on the edge of the market. They are buyers who minimally purchase an industry’s offering out of necessity but are mentally noncustomers of the industry. They are waiting to jump ship and leave the industry as soon as the opportunity presents itself. However, if offered a leap in value, not only would they stay, but also their frequency of purchases would multiply, unlocking enormous latent demand.

The second tier of noncustomers is people who refuse to use your industry’s offerings. These are buyers who have seen your industry’s offerings as an option to fulfill their needs but have voted against them.

The third tier of noncustomers is farthest from your market. They are noncustomers who have never thought of your market’s offerings as an option. By focusing on key commonalities across these noncustomers and existing customers, companies can understand how to pull them into their new market.

Sequence of Blue Ocean Strategy

Companies need to build their Blue Ocean Strategy in the sequence of buyer utility, price, cost, and adoption. Have you got the strategic sequence right? Click on the picture on the left to find out the process.

4 Hurdles to Execution

Once a company has developed a blue ocean strategy with a profitable business model, it must execute it. The challenge of execution exists, of course, for any strategy. Companies, like individuals, often have a tough time translating thought into action whether in red or blue oceans.
The challenges managers face are steep. They face four hurdles:

A cognitive hurdle. waking employees up to the need for a strategic shift. Red oceans may not be the paths to future profitable growth, but they feel comfortable to people and may have even served an organization well until now, so why rock the boat?
Limited resources. The greater the shift in strategy, the greater it is assumed are the resources needed to execute it. But many companies find resources in notoriously short supply
Motivation. How do you motivate key players to move fast and tenaciously to carry out a break from the status quo?
Politics. As one manager put it, “In our organization you get shot down before you stand up.”
Although all companies face different degrees of these hurdles, and many may face only some subset of the four, knowing how to triumph over them is key to attenuating organizational risk.

To achieve this effectively, however, companies must abandon perceived wisdom on effecting change. Conventional wisdom asserts that the greater the change, the greater the resources and time you will need to bring about results. Instead, you need to flip conventional wisdom on its head using what we call tipping point leadership. Tipping point leadership allows you to overcome these four hurdles fast and at low cost while winning employees’ backing in executing a break from the status quo.

The key questions answered by tipping point leaders are as follows: What factors or acts exercise a disproportionately positive influence on breaking the status quo? On getting the maximum bang out of each buck of resources? On motivating key players to aggressively move forward with change? And on knocking down political roadblocks that often trip up even the best strategies? By single-mindedly focusing on points of disproportionate influence, tipping point leaders can topple the four hurdles that limit execution of blue ocean strategy. They can do this fast and at low cost.

Three ε Principles of Fair Process

What is fair process? Fair process builds execution into strategy by creating people's buy-in up front. When fair process is exercised in the strategy making process, people trust that a level playing field exists. This inspires them to cooperate voluntarily in executing the resulting strategic decisions.

There are three mutually reinforcing elements that define fair process: engagement, explanation, and clarity of expectation. Whether people are senior executives or shop employees, they all look to these elements. We call them the three Ε principles of fair process.










Conventional Wisdom vs Tipping Point Leadership

The conventional theory of organizational change rests on transforming the mass. So change efforts are focused on moving the mass, requiring steep resources and long time frames — luxuries few executives can afford. Tipping point leadership, by contrast, takes a reverse course. To change the mass it focuses on transforming the extremes: the people, acts, and activities that exercise a disproportionate influence on performance. By transforming the extremes, tipping point leaders are able to change the core fast and at low cost to execute their new strategy.

Website Marketing Turnoffs

13 things not to do when adapting your product to an online model.

Here's a compilation of 13 silly and even stupid ways some companies are hindering adoption of their products and services. So if you are doing any of them, don't.

1. Forcing immediate registration: Requiring a new user to register is a reasonable request—after you've sucked him in. The sites that require registration as the first step are putting a barrier in front of adoption.

2. The long URL: Say a site generates a URL that's 70 characters long or more. When you copy, paste and e-mail this URL, a line break is added. Then, people can't click on the link or it only links to the first part of the URL.

3. Windows that don't generate URLs: Have you ever wanted to point people to a page, but the page has no URL? Did the company decide it didn't want referrals, links and additional traffic?

4. The unsearchable website: Some sites don't offer a search option. If your site goes deeper than one level, it needs a search box.

5. Sites without Delicious, Digg and Fark bookmarks: There's no reason why a company wouldn't want its fans to bookmark its pages. When my blog hits the front page of Digg, page views typically increase six or seven times.

6. Limiting contact to e-mail: Don't get me wrong; I live and die by e-mail. But sometimes I want to call or even snail-mail a company. Many companies only let you send an e-mail via their "Contact Us" page. Why can't companies be honest and just call it "Don't Contact Us"?

7. Lack of feeds and e-mail lists: Make getting information about your products and services easy by providing e-mail and RSS feeds for content and PR newsletters.

8. Making users retype e-mail addresses: How about the patent-pending, curve-jumping Web 2.0 company that wants you to share content but requires you to retype your friends' e-mail addresses? I have 7,703 e-mail addresses in Microsoft Entourage. I'm not going to retype them into some done-as-an-afterthought address book.

9. No e-mail addresses as usernames: I'm a member of hundreds of sites. I can't remember my usernames, but I can remember my e-mail address. So why not let me use that?

10. Case-sensitive usernames and passwords: I know; these are more secure. But then I'm more likely to type in my user name and password incorrectly.

11. Friction-full commenting: "Moderated comments" is an oxymoron. If your company is trying to be a hip, myth-busting, hypocrisy-outing joint, it should let anyone comment. Also, many times I've started to leave a comment on a blog but stopped when I realized I'd have to register.

12. Unreadable confirmation codes: A visual confirmation graphic system is a good thing, but many are too difficult to read. All you have to prove is that you're not a robot. So if the code is "ghj1lK," entering "ghj11K" should be good enough.

13. E-mails without signatures: Communication would be so much easier if everyone included a complete e-mail signature with their name, company, address, phone and e-mail address.

Three Ways to Make Conferences Better

The meetings and conference business has taken hits from the economy and Joe Biden telling everyone he wants his family to stay off airplanes.

But, much like the overall economy, the business is slowly turning around, or at least slowing its decline. So this is a good time to take a moment to consider the conference business in general.

What could it do better when it comes roaring back in 2010? Following are three radical suggestions for improving meetings and conferences;

1. Conferences and meetings should tell unique stories. Think about how conferences and meetings are typically planned. A committee picks a theme. Then someone finds a keynote speaker to open, and maybe one to close. Then the committee divides the rest of the time up into 60-minute slots and fills them with 'breakouts', panels, workshop leaders, and so on. The result? From the conference-goer's point of view, it's like a regular workday, only worse. You've got back-to-back meetings to attend, a day or days you don't get to schedule, and uncomfortable seating. The only choice you get to exercise is not to take part in some or all of the sessions. Then you feel guilty for sneaking off to the gym, or your hotel room, or the bar.

It's a dreary prospect, because it could be so much better. A conference should tell a story, one that unfolds and builds from the initial moments to the close. Like any good story, there should be moments of high excitement, followed by moments of relative calm. That's different from panic and boredom in ceaseless alternation. A good meeting should make linear sense from start to finish, in a way that allows attendees to retain what they see and hear rather than just feeling overwhelmed by the information.

2. Conferences should be for, by, and about the attendees. A meeting or conference should feel participative, and you, the meeting attendee, should have some significant part in it beyond being a warm body. Attendees should react, critique, judge, schedule, and vote for what they like and don't like. And that's just for starters. There are many ways to give attendees a larger role in meetings and conferences, from making them part of panel discussions to creating discussion groups to having them manage Questions and Answers.

Every meeting should have a master of ceremony, or M.C.s, and they should do more than just point out the bathrooms and introduce the next speaker. They should integrate, challenge, pull together, combine, disrupt, and generally function as the representative of the attendees, making sense of it all and demanding more from the speakers and other leaders.

3. Conferences should be about more than just eating and sitting. We live more and more of our lives in the splendid isolation of the Internet, with all the faux connectors like Facebook, Twitter, email, and the rest. Getting together is an increasingly rare and important privilege. Meetings and conferences should be constructed to take advantage of the gathered group. Every meeting or conference should use the power of the group to give something back to the community in which the meeting is held. Help a local charity, fix a local problem, champion a local hero, start a new movement. There are many ways one could imagine making use of the combined energies of the people assembled. It's a crime to waste that gathered power.

To be sure, some meetings and conferences do some of these things now, but not enough, and few, if any, get them all done. Meetings take their toll on the environment, the workplace, and the families of the attendees. It's time to raise the conference stakes and make them serve us better.

Chasing Down Large Accounts

Six tips to help you land larger clients.

Ready to go after bigger business? Here are six ways to get you started and keep you going:

1. Make sure you’re still focusing on the small and mid size accounts as a base. This will give you a safety net in the event that you lose a large account. Having solid small and mid size accounts will also give you the confidence to go big.

2. Once you have a large account in your sights, figure out who’s at the top. Learn as much as you can about his or her company and its goals. How can you help them sell what they sell? Next, go directly to the top--to the CEO or the president. This will give you a clear picture of the organization, its decision makers and its hierarchy. There is nothing more powerful than the CEO walking you into the vice president’s office and saying, “Linda, please look into this idea with Mark. It can help us with the new line of laptop products.”

3. Become the mayor of the account. I often travel in the field with a select group of top performers from certain companies. They typically have relationships with everyone in the account, from the receptionist to the office manager to the president. Many times, those contacts get promoted or assigned to other locations where they can use your services or recommend you to other individuals inside the company. Never underestimate the power of networking.

4. Look for problems, challenges and solutions. As I’ve always said, problems are opportunities. They allow you to focus on providing valuable ideas and solutions and help you stand out from competition that might only be interested in pushing their own product. Look at the company’s website, talk to its sales force and take the time to understand why its customers buy. If you can identify a problem, you can provide real-world solutions and new ideas.

5. Forget about what you sell. Sell what the account sells and learn how they run their business. Who do they sell to? Who’s the competition? What’s stopping them from growing and succeeding? This kind of sales focus turns you into an asset.

6. Most important: If it’s right, don’t stop the fight. Most people give up when they’re on the 1-yard line, not realizing how close they are to closing that large account. If you’re certain you can add value to the account, then be persistent. If the value isn’t there, then it’s time to move on.

Please let me know if you need further assistance.

Five reasons to purchase new hardware during a recession

When business is bad or the economy takes a dive, new hardware purchases are often delayed indefinitely. While this is prudent, even essential, for companies struggling to survive, suspending hardware investments can sometimes prove shortsighted and can actually cost you more in the long run. This episodes of Sanity Savers for IT executives explains why there are times when new hardware purchases shouldn’t be delayed - even during a recession.

Five signs to look for when identifying future leaders

To ensure that your IT organization remains vital, you need to identify individuals who show leadership potential and help them step into that role when they’re ready. But what do future leaders look like?

Five prerequisites for successful IT projects

According to some estimates, 68 percent of IT projects fail. That’s a sobering statistic, but there are ways to stack the deck in favor of IT project success. This episode of Sanity Savers shares five strategies to help you overcome some of the common problems that plague many IT projects.

Protect company assets during employee departures

Employment transition is an often overlooked danger to company security. Whether it’s massive layoffs or routine separations, IT should have standard security policies in place that detail the steps to take when an employee leaves the company. In this IT Dojo video, I’ll go over four critical areas of employment transition security, including:

* User accounts
* Documentation
* Inventory
* Personal electronics

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Deze oplossingen zijn nu ook toegankelijk voor het midden- en kleinbedrijf.

ServLabs works with partners to create web-based business solutions, and manages the implementation of those solutions!

De aanpak is gebaseerd op ervaring, wetenschappelijk onderzoek en een branchebewust interpretatie van de bevindingen.

Missie
ServLabs is een landelijk opererend adviesburo met een duidelijke missie: bijdragen aan de continuïteit en winstgevendheid van onze klanten. Wetenschap en praktijkervaring worden gebundeld om een uniek oplossing te genereren.






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Technology: Sound Beaming

TIN FOIL HAT ALERT: NWO Technology Beams Voices Directly into your Brain
Hear Voices? It May Be an Ad
An A&E Billboard 'Whispers' a Spooky Message Audible Only in Your Head in Push to Promote Its New 'Paranormal' Program

Source: AdAge

New Yorker Alison Wilson was walking down Prince Street in SoHo last week when she heard a woman's voice right in her ear asking, "Who's there? Who's there?" She looked around to find no one in her immediate surroundings. Then the voice said, "It's not your imagination."
No, he's not crazy: Our intrepid reporter Andrew Hampp ventures to SoHo to hear for himself the technology that has New Yorkers 'freaked out' and A&E buzzing.

Indeed it isn't. It's an ad for "Paranormal State," a ghost-themed series premiering on A&E this week. The billboard uses technology manufactured by Holosonic that transmits an "audio spotlight" from a rooftop speaker so that the sound is contained within your cranium. The technology, ideal for museums and libraries or environments that require a quiet atmosphere for isolated audio slideshows, has rarely been used on such a scale before. For random passersby and residents who have to walk unwittingly through the area where the voice will penetrate their inner peace, it's another story.

Ms. Wilson, a New York-based stylist, said she expected the voice inside her head to be some type of creative project but could see how others might perceive it differently, particularly on a late-night stroll home. "I might be a little freaked out, and I wouldn't necessarily think it's coming from that billboard," she said.

Less-intrusive approach?
Joe Pompei, president and founder of Holosonics, said the creepy approach is key to drawing attention to A&E's show. But, he noted, the technology was designed to avoid adding to noise pollution. "If you really want to annoy a lot of people, a loudspeaker is the best way to do it," he said. "If you set up a loudspeaker on the top of a building, everybody's going to hear that noise. But if you're only directing that sound to a specific viewer, you're never going to hear a neighbor complaint from street vendors or pedestrians. The whole idea is to spare other people."

Holosonics has partnered with a cable network once before, when Court TV implemented the technology to promote its "Mystery Whisperer" in the mystery sections of select bookstores. Mr. Pompei said the company also has tested retail deployments in grocery stores with Procter & Gamble and Kraft for customized audio messaging. So a customer, for example, looking to buy laundry detergent could suddenly hear the sound of gurgling water and thus feel compelled to buy Tide as a result of the sonic experience.

Mr. Pompei contends that the technology will take time for consumers to get used to, much like the lights on digital signage and illuminated billboards did when they were first used. The website Gawker posted an item about the billboard last week with the headline "Schizophrenia is the new ad gimmick," and asked "How soon will it be until in addition to the do-not-call list, we'll have a 'do not beam commercial messages into my head' list?"

"There's going to be a certain population sensitive to it. But once people see what it does and hear for themselves, they'll see it's effective for getting attention," Mr. Pompei said.

More disruptions
A&E's $3 million to $5 million campaign for "Paranormal" includes other more disruptive elements than just the one audio ad in New York. In Los Angeles, a mechanical face creeps out of a billboard as if it's coming toward the viewer, and then recedes. In print, the marketing team persuaded two print players to surrender a full editorial page to their ads, flipping the gossip section in AM New York upside down and turning a page in this week's Parade into a checkerboard of ads for "Paranormal."
AM New York's gossip page got turned upside down as promo.

It's not the network's first foray into supernatural marketing, having launched a successful viral campaign for "Mind Freak" star Criss Angel earlier this year that allowed users to trick their friends into thinking Mr. Angel was reading their mind via YouTube.

"We all know what you need to do for one of these shows is get people talking about them," said Guy Slattery, A&E's exec VP-marketing. "It shouldn't be pure informational advertising. When we were talking about marketing the show, nearly everyone had a connection with a paranormal experience, and that was a surprise to us. So we really tried to base the whole campaign on people's paranormal experiences."

So was it a ghost or just an annoyed resident who stole the speaker from the SoHo billboard twice in one day last week? Horizon Media, which helped place the billboard, had to find a new device that would prevent theft from its rooftop location. Mr. Pompei only takes it as a compliment that someone would go to the trouble of stealing his technology, but hopes consumer acceptance comes with time. "The sound isn't rattling your skull, it's not penetrating you, it's not doing anything nefarious at all. It's just like having a flashlight vs. a light bulb," he said.