Hey, everyone. Welcome to the show. Do you ever
feel like your business or maybe even just, you
know, your own efforts are stuck in this brutal,
exhausting wrestling match, you know, where everyone's
fighting for the same customers? Profits feel
squeezed tighter than toothpaste and everything
just feels sort of commoditized. Yeah, it sounds
familiar. Like there's no room to breathe, let
alone grow. It's the reality for so many industries
today, isn't it? You're constantly battling rivals
head to head in markets that seem, well, increasingly
crowded. And like you said, where products and
services start to look interchangeable. Exactly.
It feels like a constant battle just to hold
your ground. But what if there was a different
path? What if you didn't have to compete directly
at all? Oh, OK. What if you could actually create
entirely new market space where, like, you set
the rules? That's a pretty bold promise. And
it's really at the heart of the material we're
diving into today. It challenges the whole idea
that strategy is just about competition. Right.
And the genre we're exploring, it's business
strategy, specifically some truly groundbreaking
thinking. If you're someone who loves uncovering
powerful ideas that can genuinely change how
you see the world, business or otherwise, please
take a moment right now to like and subscribe.
Yeah, it really helps the show. It's the best
way to help us bring more of these deep dives
to you. So our focus for this deep dive, pulling
from the source material you shared, is the book
Blue Ocean Strategy, How to Create Uncontested
Market Space and Make the Competition Irrelevant
by W. Chan Kim and Renee Maborn. It's such a
refreshing perspective, isn't it? The link to
grab your own copy is in the description, by
the way. Good point. Our mission today is basically
to unpack the core ideas, the practical tools,
and some really vivid examples straight from
the material you've given us to show just how
powerful this concept of making competition irrelevant
can actually be. Okay, let's dive right in then.
The authors start by painting a picture of the
strategic landscape using these two powerful
metaphors, red oceans and blue oceans. Right,
red oceans. Think of that as the world we know.
All the industries that exist right now, the
established market space. The boundaries are
defined. Everyone knows the rules. And companies
are basically battling each other fiercely to
capture a bigger slice of the existing pie, the
existing demand. And because everyone's doing
this, focusing on beating the competition, the
space gets incredibly crowded. Products become,
well, commodities, right? Exactly. They start
looking so similar that customers often... only
see the price differences. And that inevitably
drives intense price wars and shrinks profit
margins for everyone. It's a market drenched
in competition, hence the red ocean, blood in
the water kind of thing. Makes painful sense.
Yeah. So blue oceans are the complete opposite.
They aren't about competing in existing space.
They're about creating new space. Okay, uncontested
space. Precisely. These are the uncontested market
spaces, the unknown territories, if you like.
In a blue ocean, competition isn't really the
main factor because the rules of the game are
being set by the creator. Ah, so the focus shifts.
Completely. It shifts from simply dividing up
existing demand to actually generating new demand.
And that leads to opportunities for highly profitable
growth. The whole aim here is to find a way out
of that bloody red ocean and into the clear,
open blue. OK, so how do you even do that? What's
the fundamental concept that lets you make competition
irrelevant? They call it value innovation, right?
That's the cornerstone. Yep. And it's crucial
to understand it's not just about value. And
it's not just about innovation and isolation.
It's the synthesis of both. Synthesis, okay.
Value innovation happens when you align innovation
with utility for the buyer, a strategic price
point, and your cost position. All three together.
OK, but doesn't that sound a bit like just, you
know, standard innovation? How is this different?
Is the making competition irrelevant the really
key part? That's precisely the distinction. Yeah.
Standard innovation might improve a product or
process, but it's usually within the existing
Red Ocean rules. You're still playing the same
game, maybe just a bit better. Value innovation
fundamentally changes the game. It creates such
a leap in value. for buyers and for the company
simultaneously, that it makes competitors' existing
strategies less relevant. You're essentially
operating in a space they haven't even defined.
Got it. And this is how they talk about breaking
that traditional value cost trade -off, isn't
it? That old idea that you either have to be
high value, which usually means high cost. Right,
or be low cost, which often means less value.
Yeah. Exactly. Value innovation. rejects that
compromise. It's about finding ways to simultaneously
increase value for the buyer and decrease costs
for the company. Wow. By getting rid of stuff.
Pretty much. By eliminating and reducing factors
the industry currently competes on, but which
might not add that much real value anymore. What's
fascinating here is how relevant this feels right
now. They argue that the need for blue oceans
is actually like... increasing because of the
current global economic climate absolutely we're
seeing supply exceed demand in many areas globalization
is tearing down geographical barriers that used
to protect niche markets dot commoditization
is accelerating and all of this is just fueling
more price wars and squeezing margins even further
Yeah, when everything looks the same, price becomes
the only battleground in the Red Ocean. So finding
ways to differentiate by creating genuinely new
value is becoming less of an option and more
of like a survival imperative. And this raises
an important question. Yeah. If we want to understand
how these blue oceans are created, where should
we look? At specific companies, at entire industries.
Right. What's the unit of analysis? Well, the
author's research. based on analyzing historical
strategic moves across loads of industries, led
them to a different conclusion. They found that
consistently excellent or visionary companies
don't necessarily stay that way forever. Things
change. Exactly. And industries themselves are
constantly evolving, shaped by the players within
them. So neither the company nor the industry
alone is the most useful unit of analysis for
finding the roots of profitable growth. through
blue oceans. So what is the key then? Their study
showed that the key lies in the strategic move,
those specific actions and decisions that result
in a significant leap in value and open up new
market space. Companies might rise and fall,
but it's these individual moves that create the
blue oceans. OK, that makes sense. Focus on the
action, not just the actor. So let's unpack the
practical side. How do you actually formulate
a blue ocean strategy? The material you shared
highlights some powerful analytical tools. One
of the core ones is the Strategy Canvas. Ah,
yes, the Strategy Canvas. It's a great diagnostic
tool, but also an action framework. It helps
you visually map out the current state of play
in an industry. Okay, so it's like a graph. Sort
of. The horizontal axis lists the key factors
that the industry competes on and invests in
things like price, features, service, whatever
is relevant. And the vertical axis shows the
level of offering buyers receive across those
factors, usually from low to high. So you can
plot the value curve for different competitors
or maybe the industry average showing where everyone's
currently focusing their energy and investment.
Yeah. Like a snapshot. Exactly. And the authors
point out that an effective blue ocean strategy
canvas or its value curve should have three complementary
qualities that really stand out. Focus, divergence,
and a compelling tagline. Focus, meaning you're
not trying to be everything to everyone. You're
concentrating investment on just a few key factors.
Precisely. And divergence means your value curve
looks different. It doesn't just mimic competitors.
It stands apart. It has a unique shape. And the
tagline, that's like the elevator pitch. Kind
of. The clear, simple message that encapsulates
the essence of your blue ocean strategy and really
resonates with potential buyers. If your canvas
is just a squiggly line trying to match competitors
on everything, lacking that focus and divergence.
And you can't summarize it easily. Then you're
likely stuck in a muddled, probably high cost
red ocean strategy. OK. They also mentioned a
tool for looking at a company's current. portfolio,
the Pioneer Migrator Settler Map. Yes, the PMS
map. It's a way to figure out where you stand
right now. They suggest looking at your company's
offerings through this lens. So settlers are?
Think of settlers as your Me Too products. They're
just fighting for scraps in existing red oceans,
basically value imitating. Okay. Migrators. Migrators
offer maybe better value, perhaps differentiating
a bit, but they're still fundamentally playing
in the existing market space. Value improvement.
But not creation. And pioneers. Those must be
the blue ocean creators. Exactly. They're the
ones opening entirely new ground, creating new
value curves. So a company with mostly settlers
has pretty limited growth prospects. Right. They're
just treading water. Migrators are OK, but still
vulnerable. Pioneers are where the exciting future
growth lies. It helps you see if your current
strategy is setting you up for future blue oceans
or just reinforcing your position in existing
red ones. Got it. Now, how do you actually design
that new divergent value curve? That's where
the four actions framework comes in, right? Yes.
This is a really powerful way to challenge the
underlying assumptions and the sort of conventional
logic of an industry. It poses four key questions
about the factors the industry currently competes
on. Okay. What are they? Eliminate. Reduce, raise,
and create. Eliminate. Like, which factors that
the industry has long taken for granted, maybe
things everyone thinks are competitive necessities,
should just be completely eliminated because
they no longer add real value? Spot on. Then
reduce. Which factors should be reduced well
below the industry standard? Perhaps they're
over -engineered or companies are over -investing
just because competitors are. Raise. Which factors
should be raised well above the industry standard?
These are often things where buyers are currently
forced to compromise or where there's significant
untapped demand. And finally, create. Create.
Which factors should be created that the industry
has never offered before? These are entirely
new sources of value that can attract new buyers,
maybe even non -customers of the industry today.
This is where the examples from the material
you provided really bring it home. Let's talk
about yellowtail wine. The U .S. wine industry
was like a super crowded red ocean. Oh, absolutely.
Tons of wineries, really confusing choices for
the average person, intense competition everywhere.
So Casella Wines, the Australian company behind
Yellowtail, they didn't try to compete on those
traditional wine metrics, did they? Not at all.
They used these four actions to create something
entirely different. They eliminated and reduced
things like the focus on tannins, oak complexity,
the need for aging. All that wine snob stuff.
Kind of. Also, the elaborate wine distinctions,
the overwhelming choice of varietals. They even
downplayed vineyard origin, which is huge in
traditional wine marketing. Okay, so they simplified.
What did they raise? They raised the price slightly
above the really cheap budget wines, positioning
it as accessible but suggesting better quality
than the absolute bottom shelf. Than the created.
And the created, an easy -drinking, fruity, slightly
sweet taste profile that appealed to a much wider
audience. Plus, incredible ease of selection.
Initially just two types, a Chardonnay and a
Shiraz. And that fun, approachable branding with
the kangaroo. Right. Instantly recognizable.
The result. They created a social drink. It was
accessible not just to existing wine drinkers,
but also to people who usually drank beer or
cocktails. They attracted non -customers of the
industry. Wow. And they became incredibly successful
without massive advertising spend, simply because
they offered something genuinely different and
appealing. Their value curve looked nothing like
the established players. It's such a clear illustration
of not competing head -to -head. Another great
example from your material is Cirque du Soleil.
Absolutely. A classic. They looked at the struggling
traditional circuits industry, which was really
a red ocean. Fading fast. Yeah. Using the four
actions. They eliminated expensive elements like
star performers and animal shows and things like
aisle concession sales. Get rid of the costly,
controversial stuff. Right. They even reduced
the focus on things like sort of slapstick fun
aimed purely at kids and the pure thrill and
danger element of animal acts. And what did they
raise and create instead? Well, they raised ticket
prices dramatically compared to traditional circuses.
They positioned themselves as premium entertainment
and they... Created things like a unified theme
or story for each show, multiple productions
running at the same time, a much more refined
viewing environment, and integrated artistic
music and dance drawing elements from theater.
So less sawdust, more sophistication. Pretty
much. They didn't try to make a better circus.
They created a completely new form of entertainment
that appealed to adult theatergoers, corporate
clients, people who wouldn't traditionally go
to a circus at all. Another blue ocean created
by totally reconstructing industry elements.
Okay, so we know how to build a new value curve,
but how do you systematically find these blue
ocean opportunities in the first place? This
leads us to the six paths framework, right? Which
is all about systematically reconstructing market
boundaries. Exactly. This framework encourages
you to look beyond the conventional lines that
typically define your industry or market. Path
one is look across alternative industries. Alternatives.
Meaning industries that look different on the
surface but actually serve the same fundamental
purpose or customer need. Precisely. Like NetJets.
They looked at two alternatives. Commercial airlines
and buying your own private jet. Very different
options. Right. Commercial travel is lower cost
per seat, but involves hassles, airports, delays,
fixed schedules. Private jets offer amazing speed
and convenience, but come with massive fixed
costs and high variable costs. So net jets didn't
just compete with airlines or jet manufacturers.
No. Yeah. By creating fractional jet ownership,
they combined the speed and convenience of private
jets with a much lower variable cost and, crucially,
the avoidance of those huge fixed costs. They
appealed to busy corporate travelers who wouldn't
buy a whole jet but needed more than commercial
could offer. Creating a market between the two
alternatives. Exactly. Or think about iMode in
Japan. They looked across cell phones and the
PC Internet. Okay. Phone versus computer. Cell
phones offered mobile convenience and voice calls.
The PC internet offered data, information, services,
but it was expensive back then, complex, and
tethered to a desk. NTT Docomo combined mobile
convenience with simple, always -on data services,
email, basic info, games at an accessible price
point. They essentially created the mobile data
market for the mass consumer, targeting people
who found the PC internet too complicated or
just inaccessible. Okay, path two. Look across
strategic groups within industries. What are
strategic groups? Within any industry, you usually
find groups of companies pursuing similar strategies,
often defined by dimensions like price and performance.
Think luxury versus budget car makers or full
service versus discount brokers. Gotcha. Different
tiers within the same industry. Yeah. The insight
here is to understand why customers trade up
or down between these groups. What makes them
choose one over the other? Curves, the women's
fitness company, is a good example. They looked
across home exercise alternatives and traditional
big box health clubs. Two different strategic
groups for fitness. Right. Women might trade
up to health clubs for motivation and better
facilities, but they often traded down or avoided
them due to cost, time commitment, or feeling
intimidated or self -conscious. Makes sense.
So Curves eliminated things like bulky machines,
food courts, spas, pools, even locker rooms and
mirrors. They reduced the workout time to just...
30 minutes. And they created a women -only, non
-intimidating, super quick, low -cost circuit
training experience. So they deliberately targeted
the reasons women abandoned both home exercise
and traditional health gloves. Clever. Exactly.
Path three. Look across the chain of buyers.
Who does your industry typically focus on? Is
it the person who actually pays, the purchaser,
the person who uses the product, the user, or
maybe someone who influences the decision? An
influencer. Industries usually focus on one main
group, right? Often, yes. Shifting that focus
can unlock completely new value. Bloomberg is
a classic example here. The financial data industry
traditionally sold terminals to IT managers,
the purchasers. Okay, the people managing the
budget. But Bloomberg shifted focus to the traders
and analysts, the users. By understanding what
the users truly needed. Real time data, powerful
analytics tools right there, even personal concierge
type services because they had high incomes but
very little free time. Ah, focusing on the end
user's needs. Bloomberg made their terminal absolutely
indispensable to the people who actually use
the data day in, day out. They created such high
demand from users that the IT managers basically
had to buy it almost regardless of the cost.
They empowered the user to drive the purchasing
decision. Interesting. any other quick examples
yeah the material mentions canon focusing on
the user for their desktop copiers making them
easy for anyone in an office to use instead of
just the corporate purchasing department Or Novo
Nordisk targeting diabetics directly with user
-friendly insulin delivery systems like pens,
not just focusing on selling bulk insulin to
hospitals or doctors. Right, making it easier
for the actual patient. Okay, path four. Look
across complementary product and service offerings.
This is about thinking about the total solution
customers need to accomplish a task. What happens
before, during, and after your product or service
is actually used? What other things do they need?
Okay, thinking broader than just your product.
Exactly. Consider any buy buses. They sold buses
to municipalities. They looked beyond just the
initial purchase price of the bus. Which is probably
what most competitors focused on. Right, and
they looked at the total life cycle cost for
the city. This included big pain points like
maintenance, fuel consumption, and dealing with
corrosion, especially in harsh climates. Didn't
that add up over years? Hugely. So at ABI, started
using fiberglass for the bus bodies. This eliminated
corrosion issues and significantly reduced maintenance
needs and even fuel consumption over the bus's
lifetime, even though their initial purchase
price was higher. The dramatically lower total
cost of ownership created a blue ocean of value
for the municipalities. Precisely. They also
found ways to reduce manufacturing costs and
increase interior space by using composite materials,
which allowed for smaller engines and fewer axles.
Another example mentioned was CMEX in Mexico,
the cement company. Yeah, they didn't just see
cement as a functional product, you know, bags
of gray powder. They looked at the complementary
service or goal, building a home addition, which
for many people was seen as a really frustrating,
long, complicated process. Right. Not just buying
cement, but achieving the dream of a bigger home.
Exactly. So Samix reframed cement as enabling
the gift of dreams, and they added complementary
services like financing options and construction
know -how, essentially bundling the product with
the total solution the buyer truly wanted, the
finished home edition, delivered more easily.
Path five, look across functional or emotional
appeal to buyers. This one's about how industries
often compete intensely on either the functional
utility or the emotional appeal of their offerings.
The idea here is to challenge that orientation.
So if your industry is very functional, add emotion.
And if it's emotional, add function. Basically,
yeah. Or shoot the emphasis. The classic example
is Swatch. The watch industry, especially at
the lower end, was primarily functional, focused
on telling time accurately, durability. Right,
a tool. Swatch transformed the budget watch into
an emotional fashion accessory. It became about
self -expression, collecting, fun. They completely
changed how people bought and wore watches, especially
inexpensive ones. And the other way around. The
body shop is a good example. The cosmetics industry
was heavily driven by emotional appear promises
of beauty, glamour, hope in a jar. The Body Shop
added a strong functional and ethical appeal,
focusing on natural ingredients, simple packaging,
and actively challenging traditional beauty standards.
Right. Appealing to practicality and values.
And C -Mix, as we mentioned, added emotional
appeal, the dream home, to a purely functional
product like cement. Exactly. Path six, the last
one. Look across time. This is about identifying
key trends that are already unfolding, trends
with a clear trajectory, and figuring out how
your business can shape the future and capitalize
on them, rather than just reacting incrementally.
So looking ahead at decisive trends, like iTunes.
Perfect example. Apple didn't just react passively
to the trend of digital music and illegal file
sharing. They saw the clear trajectory, but they
also saw the major pain points for consumers.
Like the illegality, the dodgy quality sometimes,
the difficulty finding music, having to buy a
whole CD for just one song you like. All of that.
They capitalized on the digital trend by offering
a better solution. A legal, super easy to use
platform with a la carte downloads at an accessible
impulse buy price, 99 cents. They created a massive
blue ocean by addressing the compromises consumers
were making with both physical CDs and illegal
downloading. OK, so those six paths give you
ways to find potential blue ocean ideas. But
once you've used these frameworks and generated
an idea, how do you know if it's actually viable,
if it'll work in the real world? It's crucial.
You don't want to invest heavily in an idea that's
doomed from the start. They provide a sequence
filter called getting the strategic sequence
right. A sequence, meaning you have to pass the
tests in order. Yes, exactly. It tests the idea
against four key criteria in a specific order.
Buyer utility, price, cost, and adoption. If
you fail on any of these early on, the idea is
unlikely to succeed commercially, and you should
probably rethink or abandon it. Okay, first hurdle,
buyer utility. Does your idea unlock truly exceptional
utility for the mass of buyers? Is there a really
compelling reason for people to switch from what
they're doing now and choose your offering? Right.
Is it genuinely useful in a new way? They suggest
using tools like the buyer experience cycle,
mapping the customer's journey from purchase,
delivery, use, supplements, maintenance, all
the way to disposal and the utility levers. Levers
like simplicity, convenience, risk reduction,
fun and image, environmental friendliness. To
systematically identify and eliminate the biggest
blocks to utility that customers currently face.
The material mentions the Model T example here.
Yeah, Henry Ford looked at the early car buyer
experience and saw huge blocks. Cars were unreliable,
so maintenance was a big risk. Roads were terrible,
making them inconvenient. He addressed these
directly by making the Model T simple, incredibly
robust, easy to fix, and building a dealer network
for service. That unlocked exceptional utility
for the mass market, not just the wealthy hobbyists.
Okay, so first, utility must be there. Next,
strategic pricing. Yes. Is your price set at
a level that's accessible to the mass of target
buyers? And this is important. It means looking
beyond your direct industry competitors. You
need to understand the price corridor of the
mass. Meaning? Meaning, what are people currently
paying for alternatives that serve the same function
or objective, even if they look completely different?
Products or services in other industries or even
totally different forms. So for Yellowtail, they
didn't just look at other wines, but maybe beer
and cocktails too. Exactly. That helps you find
a price point that attracts the largest possible
group of target buyers. This accessibility is
really crucial, especially because many blue
ocean ideas aren't easily protected by patents
long term. A mass accessible price encourages
widespread adoption and powerful word of mouth.
Which can be a strong defense against imitators
jumping in later. Precisely. Then, after setting
the strategic price, comes target costing. Can
you actually make money at that price? Right.
Can you profitably deliver the offering? at the
strategic price you've set. This usually isn't
about just cutting costs incrementally. It often
requires significant cost innovations or streamlining
processes, like how Swatch radically simplified
watch design and manufacturing. Or partnering.
Or partnering strategically, yeah. Like SAP did
for its enterprise software, or NTT Docomo did
for iMode content. If hitting the cost target
is really difficult, you might even need pricing
innovation itself. Like Blockbuster changing
the game from selling expensive tapes to renting
them cheaply. Exactly. Changing the revenue model
entirely can sometimes bridge the gap if the
cost target seems unreachable through operational
changes alone. Okay, utility, price, cost. What's
the final hurdle in the sequence? Adoption. Have
you thought about and planned for the hurdles
to adoption? And this isn't just about customers
accepting the new offering. It crucially includes
your own employees, your business partners, maybe
even the general public or regulators. People
resisting the change internally. Yes. Or external
partners being unwilling or unable to adapt.
You need to anticipate fears, resistance, potential
roadblocks, and address them proactively. This
requires really open discussion and clear communication
about the strategy and its implications. They
contrast Morgan Stanley and Merrill Lynch here,
don't they? Yeah. Morgan Stanley openly discussed
the disruptive threat of the Internet with its
brokers, got their input, and gained their buy
-in for their online strategy. Merrill Lynch
initially was less communicative, which apparently
led to significant internal resistance and slowed
down their response. So you need to bring everyone
along. The book provides a tool. The Blue Ocean
Idea Index or BOI Index. Yes, it's basically
a checklist or scorecard to help you systematically
test your idea against these four criteria. Utility,
price, cost, adoption. Successful blue oceans
like iMode tend to score highly across all four.
And ideas that look promising but fail these
checks during development. Philips' CDI multimedia
player or Motorola's Iridium satellite phone
system often end up as costly commercial failures
despite the technological innovation. The business
model wasn't right. OK, so even with a brilliant
strategy and a commercially viable idea tested
through that sequence, execution can still easily
derail everything. The authors identify four
common organizational hurdles. Yep. The execution
challenge is huge. First is the cognitive hurdle.
Meaning getting people, especially managers,
to even recognize the need for a major strategic
shift and accept a new reality, breaking free
from the comfortable status quo. Exactly. We've
always done it this way. Second. The resource
hurdle, the perception or sometimes the reality
of having limited resources, money, people, time
to actually implement the new strategy. We can't
afford to do this right now. Right. Third, the
motivational hurdle. How do you get the mass
of employees, the frontline troops, to be genuinely
enthusiastic and actively work towards the new
strategy rather than just complying passively
or worse, resisting? Getting buy -in from everyone.
And fourth, the political hurdle. Dealing with
internal politics, powerful individuals or groups
with vested interests who might actively resist
the change because it threatens their power,
status or resources. OK. Cognitive, resource,
motivational, political. How do you overcome
these? They propose something called tipping
point leadership. The core idea is that you don't
need massive resources or universal buy in from
day one. Instead, you focus disproportionate
influence on the extremes. Extremes. Like what?
Like. Key influential people, specific acts or
initiatives that have high visibility and impact,
and critical activities that can create momentum.
The goal is to rapidly tip the organization toward
the new strategy with relatively low cost and
effort by focusing your energy intelligently.
Okay, how does that work for each hurdle? For
the cognitive hurdle? Seeing is believing. You
need to get managers out of their nice offices
and expose them directly to the harsh operational
reality. Make the problem undeniable. Like the
example of William Bratton when he became chief
of the NYC Transit Police. Exactly. He made his
senior staff ride the chaotic, crime -ridden
subway system day and night. Not just look at
crime statistics, but experience the electric
sewer firsthand. That forced them to confront
the true extent of the problem and the need for
radical change. Or getting leaders to meet directly
with unhappy customers instead of just reading
filtered reports. Yes, like the Boston Police
District, for example, where understanding residents'
real fears about minor quality of life crimes,
not just major felonies, led to a strategic shift
that actually made people feel safer. That visceral
experience reveals the true pain points and galvanizes
action. OK, how do you jump the resource hurdle
with limited resources? You need to concentrate
your existing resources on the hot spots, those
areas or activities that have the highest performance
impact if you improve them. And just as importantly,
identify the cold spots. Areas that consume resources
but have low impact. And actively redeploy resources
away from them towards the hot spots. You can
also engage in horse trading, swapping resources
you have, but don't really need for ones you
desperately do need from other departments or
units. Bratton's buses example. fits here, right?
Perfectly. He converted old city buses into mobile
processing centers parked right outside subway
stations. This wasn't a huge new resource investment,
but it drastically cut the time officers spent
processing minor arrests, so maybe 16 hours back
at the station down to about one hour on the
bus. Bring them up. Bring them up to actually
patrol the subways, which was the high -impact
hotspot they needed to focus on. Smart reallocation.
Makes sense. What about the motivational hurdle,
getting the masses on board? Here, you need to
engage the mass of employees. One key is using
fair process, which we need to discuss more,
making people feel heard and respected. Another
is identifying the kingpins. Kingpins. The natural
leaders, the most influential people within the
organization at various levels, whose buy -in
and enthusiasm can sway many others. Focus your
efforts on winning them over first. You also
need atomization. Breaking it down. Yes. Breaking
down the big, perhaps overwhelming strategic
challenge into concrete, manageable tasks that
people feel they can actually accomplish. Celebrate
small wins along the way. Like how the NYPD under
Bratton identified key precinct chiefs as kingpins
and broke the huge goal of reducing crime into
specific, measurable tasks like cracking down
on fare evasion and cleaning up graffiti atomization.
Success in those visible areas motivated everyone
else. Exactly. Finally, jumping the political
hurdle dealing with internal resistance. The
toughest one sometimes. Often. You need to proactively
manage the politics, identify your angels, those
who strongly support the change, and leverage
their influence. You also need to anticipate
and neutralize or silence the devils. Those with
vested interests who will actively try to undermine
the change. Right. And having a politically savvy
insider, someone who understands the internal
landscape and can navigate the corridors of power,
what they call a conciliar on your core team,
can be absolutely invaluable here. OK, and this
brings us to a concept that you mentioned ties
formulation and execution together, building
execution into strategy through fair process.
This is so critical because strategy isn't just
crafted by senior management in a vacuum. It
has to be executed by everyone down the line.
And if the process used to arrive at and communicate
that strategy isn't perceived as fair by the
people who have to carry it out... It breeds
mistrust. Exactly. Mistrust, resentment, lack
of commitment, which leads to resistance or even
outright sabotage. The book's example of the
coolant supplier, Lubber, is stark. Their sales
force deliberately undermined a new expert system
because they felt excluded from the decision,
threatened by it, and hadn't been properly consulted
or informed. The process felt unfair. So what
are the principles of fair process? They emphasize
three core principles, the three E's. First,
engagement. Involving people. Yes, involving
people in the strategic decisions that will affect
them. Genuinely asking for their input, allowing
them to challenge ideas, understanding their
perspective. Second. Explanation. Even if you
can't incorporate everyone's input into the final
decision, you must clearly explain why decisions
were made the way they were. Provide the rationale,
the thinking behind the new strategy or the changes.
Don't just announce it. Makes sense. People want
to understand the why. And third, expectation
clarity. Once the strategy is set, you need to
clearly state what is expected of people under
the new rules of the game. Define the new responsibilities,
performance standards, consequences. No ambiguity.
The material you shared highlights a contrast
between two manufacturing plants, Chester and
High Park. implementing similar changes. Right.
At Chester, management brought in consultants
secretly, didn't really explain the why behind
the changes clearly, and basically fueled employee
fears of job losses. The process felt imposed
and unfair. And at Hyde Park? At Hyde Park, management
engaged employees early, explained the competitive
reasons for the changes thoroughly, listened
to concerns, and set very clear expectations
about new roles and processes. And the outcome
was very different. Dramatically different. Chester
employees felt unfairly treated, resisted the
changes, even actively sabotaged new equipment,
causing huge delays and costs. High Park employees,
even those who weren't necessarily thrilled with
every single aspect of the change, trusted the
process. They felt respected. So they committed.
They committed to the new strategy and voluntarily
cooperated to make it work, leading to rapid
and successful execution. Fair process isn't
just a nice -to -have soft skill. The authors
argue it builds intellectual and emotional recognition,
fostering trust and commitment, intangible capital
that is absolutely crucial for effective execution.
Okay, so you found your blue ocean, formulated
a strategy, filtered it for viability, and built
execution through fair process. What about sustainability?
Blue oceans won't remain uncontested forever,
surely. Imitators will come. You're absolutely
right. Success inevitably attracts imitators.
That's the nature of markets. However, blue oceans
created through genuine value innovation often
have significant built -in barriers to imitation
that can give you a valuable period of uncontested
time. What kind of barriers are we talking about?
Several kinds. The imitator's existing value
curve might need such a radical shift to match
yours that it just doesn't make sense for their
established business model or brand image think
brand conflict. Right. Like a luxury brand trying
to copy a budget offering. Exactly. Yeah. Sometimes
there's a natural monopoly effect where the market
created really can only support one dominant
player efficiently. Patents, if applicable, offer
legal protection for a time. Okay, what else?
You might gain significant cost advantages from
the scale and experience you build rapidly in
the new market, making it hard for followers
to match your price -value proposition. Network
externalities can also be powerful, where the
value of your offering increases as more people
use it. creating a virtuous cycle. Like social
networks or online marketplaces. And sometimes
the sheer scale of organizational change required
for a large incumbent competitor to pivot and
truly replicate your blue ocean strategy is just
too high a hurdle for them to overcome quickly
or effectively. Plus, if you've delivered that
significant leap in value at an accessible price,
you build strong brand buzz and customer loyalty
very quickly, making it much harder for rivals
to just come in and steal your customers. Imitating
a whole system of activities designed for value
innovation is much, much tougher than just copying
a single product feature. Okay, so there are
defenses, but imitation will likely happen eventually.
When do you need to think about value innovating
again? When do you launch the next blue ocean?
The signal is when you start seeing competitors'
value curves beginning to converge on yours again.
When the competition starts to look more like
you, threatening to turn your blue ocean increasingly
red. So you monitor the strategy canvas? Constantly.
The goal isn't necessarily to stay in one blue
ocean forever. It's to swim as far ahead as possible
in your current one, building scale advantages,
brand loyalty, and profitability before you need
to launch your next blue ocean strategic move
to stay ahead. It's about being a moving target
then, and understanding that long -term profitable
growth comes not necessarily from perpetual excellence
in one's space, but maybe from the ability to
repeatedly create these new market spaces. That
seems to be the core message. And importantly,
their research shows that these blue oceans aren't
just created by nimble startups out of nowhere.
Most actually come from within existing industries,
often by established companies that find ways
to challenge their own boundaries and assumptions.
That wraps up our deep dive into the really powerful
ideas from Blue Ocean Strategy. It's such a compelling
argument for shifting our focus, isn't it? From
just battling harder in crowded spaces to actively
finding and creating entirely new ones. Definitely.
By using frameworks like this strategy canvas
and the four actions to formulate the strategy,
applying the six paths to discover new opportunities,
testing viability rigorously with the strategic
sequence, and then ensuring smooth execution
with tipping point leadership and fair process.
Yeah. The material really shows that making competition
irrelevant isn't just some abstract ideal. It
can be a systematic process. We really hope you
found this exploration as fascinating as we did.
Thank you so much for bringing these sources
to us and for joining us on this deep dive. dive
we truly appreciate you being here and listening
in now we'd love to hear from you what was your
biggest aha moment or maybe your favorite example
from today's deep dive share it in the comments
below we genuinely love hearing what resonated
with you yeah definitely let us know and please
if you found value in this discussion like the
video and maybe share it with someone else who
you think might find these ideas insightful and
just as a final provocative thought for you to
consider Perpetual excellence in any single company
is incredibly rare, historically speaking. But
maybe the ability to repeatedly create blue oceans
by focusing on these kinds of transformative
strategic moves is the real key to sustained
long -term profitable growth. So take a moment
to think. In your own professional life or even
personal endeavors, are your efforts mainly focused
on fighting harder in a crowded red ocean? Or
are you actively looking for and maybe pursuing
opportunities to create a clear blue one? Something
to mull over. Definitely something to mull over.
Until next time.