Do It Yourself Oceaneering
INSEAD
professors W. Chan Kim and Renée Mauborgne deliver the navigation chart needed
to reach blue oceans.
Blue Ocean Shift: Beyond
Competing — Proven Steps to Inspire Confidence and Seize New Growth
by W. Chan Kim and Renée Mauborgne, Hachette Books, 2017
INSEAD professors W. Chan
Kim and Renée Mauborgne hit the thought leadership lottery with the idea of
blue oceans. Their 2005 book, Blue
Ocean Strategy: How to Create Uncontested Market Space and Make the Competition
Irrelevant Harvard Business School Press, which
described the advantages of setting sail for new “blue ocean” markets
devoid of competitors versus battling for percentage points of share in mature,
commoditized “red ocean” markets, sold more than 3.5 million copies. The two
professors, having found their own blue ocean, quickly ascended to the pinnacle
of strategic consulting: INSEAD presented them with an institute and built blue
ocean strategy into its MBA curriculum. Given all this success, the only truly
surprising thing is that it took 12 years for Kim and Mauborgne to publish a
follow-up.
For the most part, Blue
Ocean Shift proves to be worth the wait. It is a practical,
well-written guide to finding and exploiting blue ocean markets, informed by
the experiences of companies and other organizations that have chosen to seek
them out rather than compete toe-to-toe in established markets.
Kimberly-Clark Brazil (KCB), for example, sought a blue ocean for
one of the most commoditized consumer products: toilet tissue. Competing in the
US$1.5 billion market against 50 other companies and 200 brands, KCB needed to
break out of the pack. It discovered a way by investigating how Brazilian
shoppers took toilet tissue home — most of them lugged it a long way on foot or
via public transportation. This led to the idea of significantly compressing
the rolls in a vacuum pack, which had the added benefit of lowering shipping
costs and reducing the amount of retail shelf space needed. KCB added a handy
plastic carrying strap, patented the whole deal, and set sail on a
competition-free blue ocean.
Experiences such as KCB’s provided Kim and Mauborgne with the
fodder they needed to codify the journey to blue ocean markets. “While
achieving a blue ocean shift may seem like magic, it is not,” they write.
“There is actually a systematic process that is accessible to everyone, whether
you see yourself as particularly creative or not.” This process, named in
accordance with the rules of consultantese the “Blue Ocean Shift Process,” has
five steps:
1. Get started by
choosing the most promising place to focus your initiative and creating a team
for it.
2. Understand where
you are now by mapping the current state of play in your industry and
making a compelling case for change.
3. Imagine where
you could be by identifying customer pain points and the total demand
landscape for your product.
4. Find how you get
there by discovering the paths to reconstructing market boundaries and
the strategic moves needed to travel those paths.
5. Make your move by
selecting and executing the most promising option.
If this sounds like a generic change management process, well,
that’s because a blue ocean shift typically entails organizational change, with
all of its implications. And some of the authors’ advice is generic, too: Put
together a cross-functional team of people with skin in the game and appoint a
champion who has the power to help them over internal hurdles.
But Kim and Mauborgne also offer less familiar and obvious
insights. One of them involves the idea of noncustomers, which they introduced
in their first book. “For the past 25 years the business mantra has been
‘customer first,’” they now write. “The blue ocean strategist’s mantra is
‘noncustomers first.’”
The authors identify three tiers of noncustomers who have the
potential to be converted into customers. In ascending order of potential
market size, they are: soon-to-be noncustomers, who are buying only because
they have no choice; refusing noncustomers, who have thought about buying, but
have rejected it; and unexplored noncustomers, who have never been — and have
never been considered as — customers. What’s the demand potential of
noncustomers? Ask Apple how many noncustomers there were for an MP3 player.
Another intriguing idea is the “six paths” framework the authors
offer for reaching blue oceans. These paths expand the conventional search for
market opportunities. For instance, instead of analyzing your own industry, Kim
and Mauborgne suggest looking across alternative industries. “The objective in
this path is to identify the problem or needs your offering currently solves,”
they write, “and then to generate a list of other solutions or industries
noncustomers use to address the same problems or satisfy the same needs.”
Ideas like these make Blue
Ocean Shift a useful and compelling read for leaders, whether they are
seeking new markets or just trying to paddle ahead of the competition.
by Theodore Kinni
https://www.strategy-business.com/article/Do-It-Yourself-Oceaneering?gko=de52f&utm_source=itw&utm_medium=20171026&utm_campaign=resp
