Remember "Blue Ocean" Strategies

According to Kim and Maurbogne (2009), Porter's Five Forces analysis is a formula for remaining in “red oceans,” where the sharks compete mercilessly for the market. They argue that, the key to exceptional business success, is to redefine the terms of competition and move into the “blue ocean,” where you have the water to yourself. The goal of these strategies is not to beat the competition, but to make the competition irrelevant.

They conceptualised a highly competitive strategic space as being a ‘red ocean’ – full of blood and negative profits. By contrast ‘blue oceans’ are strategic spaces where nobody else has yet been. The concept encourages us to seek out blue oceans by being different and creating strategic choices that are new – market spaces not yet being served. The classic case usually given being that of Cirque du Soleil, a Canadian culture business, which transformed itself when faced with decline in the circus industry.

Three key concepts come from this thinking:

1. Value innovation: excelling on established critical success factors where others are performing badly, or creating new critical success factors that serve new customer wants and needs. 
2. The second part describes the four principles of blue ocean strategy formulation, namely a) how to create uncontested market space by reconstructing market boundaries, b) focusing on the big Picture c) reaching beyond existing demand and d) getting the strategic sequence right.
3. The third and final part describes the two key implementation principles of blue ocean strategy including tipping point leadership and fair process.

 According to HBR (2004) "Blue oceans denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. There are two ways to create blue oceans. In a few cases, companies can give rise to completely new industries, as eBay did with the online auction industry. But in most cases, a blue ocean is created from within a red ocean when a company alters the boundaries of an existing industry".

In your business, have you considered what your blue ocean is? I have a fantastic blue ocean idea for my consultancy firm, Northern Consulting Services, which we hope to launch early 2015. I also like the blue ocean strategy that a colleague of mine has to revolutionarise the meat industry (good luck JT).

I am finding more and more that as Zimbabweans , we want to learn, to have a piece of paper which shows what we have studied. The key problem is that we do not learn! Yes we learn but do not learn! There is a huge gap in application and therefore there is no evidence in practice of a learned society that we are on paper. No wonder some of the leading innovative ideas are from renowned college drop outs!

Blue ocean strategies are not necessarily going to come from the top. They will come from unfamiliar sources within the business. An organisation must be able to tap into these by being a learning organisation, by staff mobilization and respect for all employees in an organisation. My own experience has shown me that given an opportunity, a platform to contribute, the ordinary worker will come up with fantastic business ideas. So it's not just about boardrooms!

I like the observation given in one meeting that: "most of the staff we spend the whole day supervising (more like man marking in football) are the very same guys who are community leaders and church leaders that people gather around under trees over the weekends". Surely these same people must be given more room to shape the organisation's future through their input. This can only happen in an environment of mutual trust and respect.

My company is available to assist businesses in reviewing strategies, with a strong focus on looking at new business opportunities and efficiency improvements. I can be contacted on jshoniwa@nppsrecruit.com

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