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Business Change Management

Blue Ocean Strategy® Can Create a New and Uncontested Market Space

Blue Ocean Strategy® Can Create a New and Uncontested Market Space

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Are you ready for your Blue Ocean Strategy?

Tired of competing against all those "others" that you have been benchmarking yourself against for years, without much benefit?

Isn't it time you started to "create a new market space" and make the competition irrelevant?

That is what a Blue Ocean Strategy can help you create, a market space where you are the "only" -- at least for a little while.

The term was coined by W. Chan Kim and Renee Mauborgne in 2005 to describe the contrast between opportunity-driven business strategies based on creating new, uncontested market space (blue oceans), and competitor-driven models based on existing wealth and rivalry on the known market (red oceans.)

In recent years, more and more businesses are finding success using the theory, method and tools of Blue Ocean Strategy. The main appeal is how to rethink their value. How can you offer greater value at lower cost to open a new market space by creating demand that may be waiting for you. In Blue Oceans we make the competition irrelevant.

Can you? Why not!

Let's get a better understanding of how blue ocean strategy can spark you to change your business model and find new, lucrative opportunities. Here are several success stories that will inspire you to rethink your strategy completely -- not the same but better but an entirely new focus.

1. Wawa: Shifting the Core Business

With over 800 convenience retail stores, Wawa is one of the best chain stores in the Mid-Atlantic market. In 2009, Wawa was drifting into a red ocean, as competitors started catching up to and threatened its market share. Determined not to let that happen, Wawa applied the blue ocean strategy to transform itself and redefine its existing target market.

WaWa Case Study Video

Until then, Wawa’s strategy was based on three main offers, all under one roof: a convenience store, fuel service, and food service provider. But the need for transformation became imminent, and they decided to push for a quick-service restaurant model, which is also a go-to store that sells gas and convenience goods.

The company started applying the blue ocean strategy in food service first because they identified it as their weakest link with a lot of growth potential. Wawa’s primary goal was changing people’s perception, as stores that sell gas don’t usually associate with a quality food offer. And to achieve it, the company focused on applying the blue ocean strategy to improve their business operations.

Instead of visible changes like menus and store design, Wawa changed its logistics model to raise the quality, convenience, and value of its food service for customers. Since they didn’t have the in-house expertise or facilities to achieve this, the company developed a third-party logistics network to gain this vital resource at minimal cost.

In doing so, Wawa shifted its core business model to a fast-casual-to-go, built-to-order restaurant that still offers convenience goods and fuel, but at a much higher level. So much so, that the company now has non-fuel restaurant-stores, and is looking to enter the home delivery and catering industry shortly. All the while using blue ocean strategy to open a new market and increase the convenience and quality for customers.

2. Quicken: Defying Expectations

Quicken is a financial software package that allows people to manage their finances. To create it, Intuit relied on its blue ocean strategy model to bring together the speed and accuracy of financial software and the simple use and low cost of pen-and-paper financial management. It transformed how people viewed this type of software and how they perceive to settle their financial affairs.

First, Intuit created the Quicken interface to resemble the standard checkbook. It made it recognizable for consumers, but also increased speed and accuracy of financial calculations. The software package also eliminated professional accounting language, opting instead for easy-to-understand language and a few essential functions consumers generally use.

Simplifying the process of financial management benefited the company in two ways. First, it cut the costs of production, as simpler functions were easier to develop which made the package more competitive and affordable. And secondly, the value innovation made it easier for consumers to adopt and use the financial software.

Now, thirty years later, Quicken is the best-selling personal financial-management software solution, which has turned it into the basic model for financial management, surpassing even the pen-and-paper alternative.

3. Estonia: Redefining Government and Country Reputation

Estonia, with a population of around 1.3 million, is one of the most advanced digital societies in the world according to Wired magazine. In 2017, the former Soviet satellite-state used blue ocean strategy to redefine itself as an open e-society for citizens, business and government.

This small European country managed to do this by reshaping external trends across time, instead of merely reacting and adapting to them. Using the Kim and Mauborgne six paths framework, Estonia identified critical trends in digitalization and globalization. It helped the country become the home of Skype (until it sold for $8.5 billion in 2011,) and the country with the highest number of startups per capita on the continent.

The country achieved this by providing a new solution to how citizens interact with the state. Through e-Estonia, the country created and offered more than 3,000 fast, accessible, and easy-to-use e-services, which included:

• E-Government – gives citizens a simple, quick and online solution to government paperwork;

• E-Business – offering entrepreneurs the ability to start a business online in around 20 minutes, and operate it remotely;

• E-Schools – offering citizens a digitized education system that allows children to do schoolwork online and parents to monitor progress;

• E-Health System – offering citizens access to doctors and their health data, and a chance to schedule check-ups and receive prescriptions online;

• E-Residency – a program that opened Estonia to indirect customers, allowing people in the rest of the world to become e-residents of the country and access its e-services.

All of this wouldn’t have been possible without Estonia’s blue ocean strategy. The country changed its direction, offering value to its citizens and entrepreneurs while aligning the same principles with its e-Residency program. Thus, Estonia could create a better:

• Value proposition – outside residents have access to all online services from their home countries, while citizens have access to more goods and services;

• Budget proposition – the state developed a secure IT infrastructure, and used it to increase its appeal for foreign business with e-Residency cards now costing around $1;

• People proposition – the country added so much value to its citizens and international trade that media and politicians generated free publicity (The Wall Street Journal, The Guardian, The New Yorker, Germany’s Angela Merkel, and Japan’s Shinzo Abe among others.)

Maximizing convenience, speed and value for its citizens and home and foreign entrepreneurs allowed Estonia to change the people’s perception not just of government efficiency, but also the country’s reputation on the world stage.

More About Our Work with Blue Ocean Strategies

Podcast: Ask Andi--Blue Ocean Strategy Part I

Podcast: 080: Ask Andi—Blue Ocean Strategy® Step 2

Blog: Mid-Year Update: SAMC's 10 Best Blue Ocean Strategy® Blogs/Podcasts/White Papers

Ready for Change? Perhaps a Blue Ocean Strategy is Right for You!

At Simon Associates Management Consultants, we can help you rethink your business strategy to find new opportunities for growth and success. Contact us to discuss how our team of specialized corporate anthropologists can work with you to discover, develop, and apply a blue ocean strategy that suits your business.

From Observation to Innovation,

Andi Simon, Ph.D. Corporate Anthropologist

Andi Simon, Ph.D.
Corporate Anthropologist | President
Simon Associates Management Consultants

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On Dec 12, 2018 7:57:42 PM

/ Andrea Simon

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