Skip to main content

Blue Ocean Strategy in the new reality

[PLACEHOLDER]



Since the COVID lockdown started over a year ago I have seen many restaurants in my neighborhood go through transformations - many became available in the top three delivery service: Ubereats, Doordash and Skipthedishes while the rest transformed to support pick up service and patio dining. However, among all of them, one of my favorite Indian restaurants impressed me the most. 


The restaurant initially became available via the delivery services just after the lockdown in early 2020. I first ordered from the restaurant via Ubereats. In the delivery the restaurant included a pamphlet encouraging me to order from them directly on their website with an initial enticing offer. I ordered immediately after a few days from their website. I was guided to create an account and subscribe to their newsletter in the process. 


The delivery for the order was on time and the food as always was delicious and of high quality. In a few days I received a questionnaire to provide feedback on the order which I duly obliged as I wanted to encourage them for their amazing service and quality of food. Soon I started receiving personalized newsletters from the restaurant with exciting new menu items, recommendations and even surveys for future dishes I would like to see in their menu. 


Soon I found myself ordering food from them every other week, always trying the new items in their menu and thus becoming a loyal customer. I also noticed that they always added an additional item, sometimes a small appetizer or a dessert in my order to show appreciation of my loyalty. This further impressed me and when it came for me to choose a delivery from an Indian restaurant I knew intuitively which one to pick. 


It quickly dawned on me that my favorite Indian restaurant intentionally, or unintentionally, was applying the Blue Ocean Strategy to create its own market space. In this article I’ll describe the Blue Ocean Strategy along with its three (3) core concepts: 

  1. The concept of value innovation which is the cornerstone of Blue Ocean Strategy 

  2. The four action framework which can be used to discover the value innovation

  3. The popular strategy canvas which can be used to understand the current state and the future prospect 


Blue Ocean Strategy 

The Blue Ocean Strategy is a set framework and analytical tools developed by W. Chan Kim and Renée Mauborgne to enable organizations to pursue and capture uncontested market space. They coined the terms red ocean and blue ocean


Red Ocean represents the known market space, e.g. the market in which all the Indian restaurants in my neighborhood operate. They all serve similar menu items and compete with each other for the customers. The Red Ocean has cutthroat competition which can turn the ocean bloody “red” and hence the “red” ocean.  


Blue Ocean on the other hand represents the new market space where there is no competition. E.g. the market in which my favorite Indian restaurant is operating, they created their own reliable delivery service, ecommerce platform for placing orders, newsletters to engage customers and minimized their menu to keep it fresh and relevant. By operating in uncontested market space my favorite restaurant is able to drive value for both customers and themselves. This is reflected in the fact that since my first order I haven’t received a single discount offer however I still continue to order from them because of the value or quality and service they provide. This is referred to value innovation by the authors of the strategy. 


Value innovation 

Value innovation is identified as the cornerstone of the Blue Ocean Strategy. For me, this is a mindset shift where it’s essential to anchor innovation with value for buyers and the organization. In the restaurant example the restaurant innovated how they operate however the innovation was focused to increase the value for the customer by providing great service, great quality food and engagement. This allowed the restaurant to differentiate in a competitive market and gain loyal, returning customers. The authors developed the Four Action Framework to identify the competing factors to drive customer value by posing four key questions. 


Four Actions Framework

Action

Question

Restaurant example

Eliminate

Which factors that the industry has long competed on should be eliminated?

Menu items, daily specials

Raise

Which factors should be raised well above the industry’s standard?

Customer engagement, customer satisfaction

Create

Which factors should be created that the industry has never offered?

Fresh menu, capture actionable customer feedback, surveys to create new menu items, reliable owned delivery service 

Reduce

Which factors should be reduced well below the industry’s standard?

Reliance on third party delivery services, offers

The diagram outlines an example of how the restaurant can apply the Four Actions Framework to identify the competing factors to drive customer value. 


Eliminate

Raise

Non popular items from the menu

Daily specials

Customer engagement

Customer satisfaction

Reduce

Create

Reliance on third party delivery service

Offers

Surveys to create new menu items

Fresh menu

Ability to capture customer feedback

Reliable delivery service



The competing factors identified in the Four Actions Framework can be used to plot the Strategy Canvas.


Strategy canvas

The Strategy Canvas is developed by the authors to use as an action framework and diagnostic tool to understand the current state of the market and to identify future prospects where the organization can create value innovation. 


The horizontal axis represents the competing factors for the market while the vertical axis represents the level of value received by the custom across the competing factors. 


The diagram below displays the Strategy Canvas for the restaurant example. As you can see in the example below how my favorite Indian restaurant differentiates itself from the competition while still driving customer value. 


Strategy canvas of my favorite Indian restaurant



In conclusion, the Blue Ocean Strategy is applied by many organizations like Cirque du Soleil, Apple and Netflix to create new market space without any competition and thus continue to drive profitability while still creating differentiation. However given the pandemic and persistent lockdown this has become more important for many organizations going through transformation to survive and thrive in the new normal.


Please refer to https://www.blueoceanstrategy.com to learn more about Blue Ocean Strategy and the analytical tools and frameworks provided by W. Chan Kim and Renée Mauborgne to further explore the possibilities of the Blue Ocean. 

Trending posts

Democratizing AI

Democratizing AI is all about empowering others to use it, by making it available to them. Audiences, such as marketers in a company, will be able to access AI capabilities as part of their MarTech solutions, without the need of being technical. It could also be schools, where the younger generations are learning how to use it in responsible, secure, innovative, and creative ways. This is the year where companies, after discovery phases and teams experimenting, are looking to activate and take advantage of the AI advances. Generated with Microsoft Designer   And so, questions emerge, such as “What to democratize when leveraging AI?” There are common scenarios, as well as specific ones, that will depend on the company, and the industry they belong to. A common scenario, seen in many industries, when democratizing data is the data visualization and reporting . In digital marketing, as an example, data scientists and data analysts can automate reporting, making them available to the c...

Productivity framework for 2024

Recently I was at a Christmas party and I found myself giving advice to a friend on being more productive. I shared the approaches that I take which helped me become more productive at work and in my personal life. The conversation with my friend inspired me to share my approaches in this blog .  Photo by Moose Photos from Pexels   My productivity framework has five key pillars and to remember them I use the mnemonic, POFOR = P lan your tasks, O rganize yourself, F ocus on your tasks, O ptimize yourself with habits and R eflect to ensure you are being productive on the right tasks. Plan Planning is very crucial as it sets the tone for the rest of the pillars. I always found I was more productive when I planned my tasks compared to when I didn’t, and hence planning has become my rule of thumb. I recommend taking 30 minutes at the end of each day to plan your next day. This means prioritizing your tasks and blocking your calendar accordingly. By not doing so, you are at risk o...

SRE, DevOps and ITOps

 If you are wondering what the differences between the SRE and DevOps are, as well as how these roles work with ITOps within an organisation then you are not alone; and best of all you are on the right blog post. Often enough business units in a company get confused, assigning the ServiceNow or Jira tickets or any other ticketing system of your preference, to the wrong group, and even having the incorrect expectations when doing resourcing. Let us go through definitions, insights and scenarios that will help you understand the difference. DevOps software development operations - AI Generated When it comes to DevOps and SRE, then you might be wondering which practice came first. While SRE may have originated a bit earlier, internally at Google, DevOps came first publicly as a practice and started to be used by companies. A few years later was when Google decided to open SRE to the world after the publication of the "Site Reliability Engineering" book. Therefore, technically sp...

Effective framework to resolve conflict in the Workplace

 Conflicts are a part of our daily lives and are often unavoidable at work. Therefore, it's essential to have the tools to effectively manage conflicts and leverage them to our advantage - to spur new ideas, challenge and strengthen our beliefs, and evolve our perspectives when necessary. However, conflicts often trigger our fight-or-flight response and can cause chronic stress and mental fatigue and diminish our productivity. Having the right tools can help us face conflicts confidently.  AI Generated with Microsoft Copilot + Designer by Beolle   Recently, I took a course from Harvard ManageMentor® * to enhance my conflict resolution skills. I summarized the key takeaways from the course in the framework below to help you better prepare for resolving conflicts. The framework consists of six (6) parts Identify the type of conflict   Identify your own and your counterpart's conflict styles   Determine how you want to address the conflict   Prepare to resolve...

This blog uses cookies to improve your browsing experience. Simple analytics might be in place for pageviews purposes. They are harmless and never personally identify you.

Agreed