Showing posts from November, 2023

Blue Ocean Chapters 10 and 11 - Renewing Blue Ocean and Common Red Ocean Traps

Blue Oceans once captured can be sustained for some time due to barriers to imitation. The barriers could be economic, cognitive, brand or alignment. Economic is of course scale needed to be viable - imitators have to bleed till they scale up. Cognitive is about going against conventional wisdom - even after seeing someone succeed imitators refuse to believe it. Brand - of course takes consistency over time to imitate. And finally alignment of value, profit and people - it may take some time to get the interlocks right. So while others are getting these right, the company can earn good profits. And once competition gets in, companies have to start looking for the next blue ocean. Which also brings us to the question of who are those companies entering next and what is their strategy. For if they do not enter it will always remain a blue ocean. Guess we need to look at other books to deal with that. Then the authors move on from product level to portfolio level talking of settlers, migr

Blue Ocean Chapter 9 - Aligning the three propositions

 This chapter talks about how one needs to align the three propositions to create a blue ocean that others can't replicate. The three are the value proposition, the profit proposition and the people proposition. Value proposition if of course the unique value for the customers - the job that gets done better cheaper. The profit proposition depends on the cost structure. If competitors do not understand and imitate the cost proposition, they would bleed and eventually have to stop. These two together are similar to the disruptive innovation proposition of opening up a market customer not served or who find existing services too expensive and quicky making it profitable to serve them. And finally, the people proposition which includes employees and all other stakeholders across the eco systems, including the channels for sales and delivery - the execution part. As the popular truism goes however good a strategy the true test is in the execution, which has to be really meticulous.  Si

Blue Ocean Chapter 8 - Embed Execution in Strategy

 This chapter is all about change management though the authors don't use the phrase explicitly. The key idea here is to closely engage the people who are going to implement the strategy and not push it top down. This topic is not specific to blue ocean strategy. It is something applicable to any change that you want to drive through an organization. But makes sense to include here because often best strategies fail at execution. One challenge writing about this topic is that you can't intellectually validate the authors' recommendations. These are aspects of internal workings of an organization and you may not really get reliable information. Everyone likes to say they run a company democratically involving all the people and all. Unless you are in there, you will never know how things were really run. Only way I can think of validating these kind of ideas is by comparing the advice on such matters given by different authors and while speculating causes when what seems lik

Blue Ocean - Chapter 7 - Overcoming Organizational Hurdles

 Strategy is always the fun part. Implementation is the messy part. I have heard people say one can even make a bad strategy work with great execution. I wouldn't go that far though but I acknowledged getting a strategy executes is much more tougher and the area where things come apart.  I have come to view execution as art or innate talent than a science. I mean you can follow step by step project management and change management methodology. But making them work needs that innate instinct that I personally lack. So I tend to view any approaches on this front with cynicism. Let us see what these good professors say. They break the problem into 4 problems - cognitive, resources. political and motivational. I do see overlap between cognitive, political and motivational. Resources is clear. Now let us see how the other 3 differ from each other. Cognitive is about getting acceptance for your framing of the problem and potential solution. Motivational is the next mile from recognizing

Blue Ocean Strategy Chapter 6 - Lining up the ducks

 This chapter gets into details of all elements of new product innovation - the features, the pricing, cost structure and mitigating adoption risks. In terms of features we go back to the strategy canvas and see what is needed to offer a compelling value proposition. The authors give us a framework to think through dimensions of value. They ask us to think about the full life cycle of the product from a customer perspective - purchase, take delivery, use, supplement, maintain and dispose from the perspectives of productivity, simplicity, risks, environmental impact, fun & image, convenience. Honestly this model itself suffers on some of these parameters. It feels more complex that required. Simplicity and convenience sound very similar and need not have been separate parameters. And it is not clear what is productivity. On a first look it feels similar to simplicity and convenience. But I guess it means the productivity in the job the solution gets done for the customer. I wonder i

Blue Ocean Strategy - Chapter 5 - Market for the Blue Ocean

 This chapter is very similar to right customers for the product in disruptive innovation. Here again the idea is very similar - focus on customers at the outer periphery of the market or non customers. Outer periphery of the market would be the ones likely to drop off and are very cost sensitive and hence likely to be lowest margin. This book talks of the markets in three circles. First circle is customers who are currently using your product but highly likely to drop off at the first instance of a cheaper product or improved performance on a feature important to them. An example I can think of is books. Customers who are buying books but don't necessarily see them as collector item are waiting to drop of the moment it is possible to read material without needing to possess the book. A library is an alternative. But library has disadvantages like not having the content available at one's convenience for future references, the logistics of needing to go to the library to borrow

How to create the Blue Ocean Strategy in practice

 This chapters deals with the nuts and bolts of how you create the blue ocean strategy in practice. The approach as such is not ground breaking - it is a variant of typical design thinking approaches consulting companies generally facilitate customized for the Blue Ocean thinking steps. One of the things the author say is how this intuitive approach gives better results than traditional data driven approaches that leads to lot of data crunching but limited insights. I understand most first principle problem solvers do not appreciate a data driven approach. But my personal opinion is some synergy has to be found between them like lean six sigma. While lean approaches problems from fundamentals in an intuitive manner, six sigma approaches them from a highly data and statistic oriented manner. Lean Six Sigma managed to tie these two together. Data based approaches have the limitation of bring black boxed requiring lot of work and a single wrong categorization of data can mess up everythin

Six general parameters around which a product or service can be improved

This section explores 6 potential paths along which to explore to find blue oceans. The first is to go beyond one's industry. This aligns with the Disruptive Innovation concept of focusing on the job to be done rather than product features. A romance novel and a science fiction both may be books but one may be competing against social media while the other may be competing against gaming and not against each other at all, though both belong to the publishing industry. The second is to go beyond one's strategic group. The name is a bit confusing but it is actually about market segments. Say you have multiple segments with different needs, one need not try to compete within those segments and instead try to carve out a new segment. This to me appears a more advanced variant of innovation to attack low end customers. Clayton Christensen keeps it simple with just two parameters - ease of use and cost while Kim and Mauborgne leverage around their strategy canvas with a whole bunch o