Wednesday, October 06, 2010

Blue Ocean Strategy

Listening to Renee Mauborgne - author of Blue Ocean Strategy. Blue Ocean Strategy is one of my favourite books. A must read for any leader. What Renee is saying:

"The role of management is to enhance productivity or creativity of organizations.". Clearly we should spend more time on the creativity but reality is we tend to focus more on just the productivity.

Increasingly creativity is going to take on a more important role. In the future, productivity alone will not be enough.

Blue Ocean is about going beyond competition. Too often I see companies chasing the competitor rather than looking for the new untapped markets. The key is to go for market creating rather than market competing moves.

She gives examples of companies entering new markets. They not only can have the lowest cost structure but no price competition. Wow - a business persons' dream.

4 ways to find a Blue Ocean:

1 - Eliminate what customers do not need
2 - Reduce what they do not value

3 - Raise value of what people get from your industry
4 - Create new markets completely

If you can redefine your industry challenge, you will find a Blue Ocean.

They tend to not get copied easily since the market share can become so dominant so quickly and at the same time, they tend to be non-traditional.

Blue Ocean particularly works well in a high cost country like Canada or the US. Over time all Blue Oceans become Red (meaning lots of competition)

In the current economy, Blue Ocean Strategy seems to be the solution. I think the key is to be able to take time to reflect in an environment that stimulates creativity (for me, a conference like this does that for me as does reading a good book) Easily said but ...


At 3:15 PM, Anonymous Success is said...

I think this ranks right up there with Jim Collin's work! Great post!


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