In Praise of Blue Ocean Strategy
I have loved the concept of blue ocean strategy since I first read about during the heady days of the Nintendo Wii. For the uninitiated, the basic gist of blue ocean strategy is that it avoids the “red” waters of direct product competition by finding a “blue” water of product independence. The most famous examples are Cirque du Soleil as an alternative to the traditional circus and the Nintendo Wii as an alternative to the X-Box 360 and Playstation 3.
The most powerful aspect (imo) is in recognition that an organization will always have limited resources to pump into a product. You will always run into time, material, or customer constraints — even if you have a service, rather than profit, motive. Blue Ocean Strategy fixes this constraint by saying, “hey, consider cutting something out and pumping that spare value into what’s really important.”
For Nintendo, that value was in the fun factor. Nintendo pumped the brakes on the expensive HD war and, instead:
- cut their console’s price to appeal to a more general market, and
- instituted a control scheme that brought customers more into the game
The result was the Wii outsold every previous home console they’ve ever released. It seemed like everyone owned an NES in the 1980s, but Nintendo succeeded in a 64% improvement on those numbers by hitting the bigger general-market pie.
Nintendo, of course, has succeeded again with the Nintendo Switch, illustrating the strength of the concept. The portability factor of the Switch, sacrificing only some next generation graphical capabilities, will eventually help the Switch pass up Sony Playstation 2 and Wii lifetime sales.
Decide what people actually want, realize that manufacturers sometimes have proxy fights that are irrelevant, and make that business model work. Are your competitors putting an inordinate amount of time in graphically rendering age spots and arm hair when they could instead be offering real value elsewhere?
To use a video game reference, think of it like the Pokemon’s stats on this background image. If you only have a certain amount of points that a Pokemon can earn, maybe you should avoid a mediocre Pokemon.
Maybe you should cut down Defense and create a speed demon or offensive wizard instead.
(this is a radar chart btw)
A boring product site would include a metric ton of royalty-free images of smiling, soulless business people in all of their blog posts. I intentionally don’t do that. Photos of the smiling-dude-in-the-button-up-shirt-pointing-to-a-report-the-thirty-year-old-woman-is-holding may make a blog look more professional, but I’d rather trade professional for interesting and culturally relevant Pokemon images. See what I did? I just blue oceaned this post.
Yes, there are criticisms that Blue Ocean Strategy isn’t scientific, but that’s not the point. This is about offering a new lens with which to view the product development process. Decide where you DON’T need to compete and then pick a new area in which to infuse value.
