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This book (Blue Ocean Strategy by Kim and Mauborgne) may be worth a revisit. When it was first published in 2005 most small businesses had no need for it. After all, money was falling from the sky like manna from heaven. Even if revenues were soft you could go out and borrow just about anything you needed.
Fast forward three and a half years. The world is full of Chicken Little's, the national news anchors are having a field day with roller coaster ups and downs on Wall Street, and banks are going out of business left and right. Businesses are in a race to the bottom, mostly driven by cutting costs in a desperate attempt at survival. A year ago I was giving a presentation called Surviving and Thriving in Tough Times that focused on sound business practices and planning. Now, I'm telling people to go back and read Blue Ocean Strategy. Here's why.
Kim and Mauborgne put forth the premise that there are red oceans and blue oceans. Red oceans are defined as the traditional market for your service or product. They are rife with competition. Blue oceans represent uncontested market space where there is no competition (yet). Companies find blue oceans by examining the factors that define their industry and then choosing to do one of the following:
- Eliminate. If the market takes certain factors for granted they might be eliminated.
- Reduce. If factors aren't producing value for the customer they can be reduced.
- Raise. If customers are being forced to make compromises you can raise certain factors to eliminate that necessity.
- Create. Find out what customers value and produce it.
I think the concept of blue ocean strategy is particularly relevant today because many firms are engaging in activities 1 and 2. They are reducing or eliminating features, products and services, but they are doing so from a cost containment stance rather than a strategic one. Change is a hard thing to embrace. The reality of the current market is that companies are being FORCED to change. Why not harness that momentum and make something great come out of it? This truly is a time of extraordinary opportunity for those who are paying attention.