Lesson 2: (Blue Ocean Strategy)
Arriving at a Blue Ocean implies a strategy canvas that allows you to win the competition.
Every business will have to fight its battles in the Red Ocean, regardless of its industry.
Competition is a natural part of every company’s environment and growth, but it’s up to its executives to come up with ways to tame it while focusing on innovation. In other words, you’ll need to swim in the Red Ocean till you reach the Blue one.
One way to do this is by applying the canvas suggested by the authors. This canvas consists of four essential questions to ask yourself before you jump into the Blue Ocean:
1)Which of the factors that the industry takes for granted should be eliminated?
2)Which factors should be reduced well below industry standard?
3)Which factors should you raise above industry standard?
4)Which factors should be created that have never been offered?
The first question tries to open up a space for companies to evaluate the services or products they offer that consumers don’t care about and that they should eliminate to grow margins and focus on innovation.
For example, low-cost airlines eliminated airport lounges and offered more flights, which in turn grew their figures and increased their support from consumers who wanted more frequent flights instead of better lounges.
The second question is similar, but it asks what you can focus on to be the best while reducing the focus on another aspect just enough to keep it going at the bare minimum.
Be the best in your area, not in all areas. This takes us to the third question: what would that area be? Where are you more likely to succeed? Focus on that area. Finally, the fourth question is all about innovation, or the Blue Ocean.
