Mike introduces Blue Ocean Strategy at Blue Buddies

Mike had recently attended a retail industry conference where Blue Ocean Strategy had been presented by both Professors Chan Kim and Renée Mauborgne.  This insightful new approach to producing high profit growth through creating uncontested market space and making competitors irrelevant resonated strongly with him.  He reflected on the real business successes he had had in the past.  He was the one who had first suggested that making shopping for toys easy and simple and convenient at every step would be the key to raising sales volumes.  He also remembered proactively finding the lowest cost way of delivering these changes and how profits had then grown so impressively.  He was proud to have created the strongest profit growth record in his region that his previous organization had ever seen.

Mike bought the ‘Blue Ocean Strategy’ book and read it a few times.  When he arrived at Blue Buddies, he brought with him a copy of the book for each of his new team and asked them to read it.  Mike was under pressure from the stock market analysts and he believed that the strategic logic of high profit growth as outlined in ‘Blue Ocean Strategy’ would be the basis of his success and that of Blue Buddies in the future.  It was also a compelling message to give to the Board (who later all bought their own copies of the book) and to the analysts.

Mike and the Executive Team discussed what they should do and made two vital decisions:

•   To focus just on the Product (rather than Service and Delivery) for the moment

•   To begin by conducting their own Visual Exploration of the market, focusing more on noncustomers of the industry than existing customers. 

Mike’s reason for concentrating on the product alone for the moment is that his opinion of Blue Buddies capability as an organization was not sufficiently high enough for him to feel comfortable to undertake too many substantial changes simultaneously, particularly in delivery.

Although Sally originally expressed doubts about the Visual Exploration process, once they started conducting their observations and interviews she rapidly became a convert.  “Basing a strategy on noncustomers – this is something really revolutionary” she said.  They decided to examine each of the Six Paths to see which ones would expose potentially valuable insights:

•   Path 1:  Look Across Alternative Industries to Video Gaming – what were people doing to relax and entertain themselves in a competitive way rather than play with video games?

•   Path 2:  Look Across Strategic Groups Within the Industry, including video game arcades and the like

•   Path 3:  Look Across the Chain of Buyers and Users – children, their parents and carers, young adults, adults, those of advanced years

•   Path 4:  Look Across Complementary Product and Service Offerings which could remove the major hassles and compromises people may have to make when considering buying and using a gaming console

•   Path 5:  Look Across the Functional and Emotional Appeal for Buyers – is there a potentially more valuable orientation for this high technology industry?

•   Path 6:  Look Across Time – what certain trends will impact the value that people may gain from video gaming in the future?

The Executive Team decided to meet again in three weeks’ time to compare observations and to try and focus on those things they heard most consistently from noncustomers.