Build a Blue Ocean Strategy with Market Research

Competitive Intelligence for Marketing Strategy

blue ocean
Once You Have Your Blue Ocean Strategy, You Will Feel Calmer. Courtesy Michael Faes, Photographer. © January 1, 2011 Stock.xchng

To use the Blue Ocean strategy effectively, a business must be agile and have a beginners' mind. That is, a Zen orientation that allows one to listen and learn deeply and to conceptualize along a new path. Blue Ocean strategy helps a business strategically move ideas into an uncontested market. Instead of asking how it can compete in its existing marketplace-known as the Red Ocean-a company beginning to employ Blue Ocean strategy must ask itself what it wants to be when it grows up.

The idea is look outward toward unfamiliar horizons. Einstein never heard of Blue Ocean strategy, but he could have written the book. Instead, we have from him, many useful and entertaining quotes, one of which is, ​​We can't solve problems by using the same kind of thinking we used when we created them.

This is precisely where market research comes in.

Blue Ocean strategy thinking is based on competitive intelligence as much as it is based on ​proprietary business intelligence. In other words, in order to use Blue Ocean strategy effectively, a company needs to thoroughly understand what it currently does-its core business-and it needs to have the same information about the competition. As Kim and Maubourgne outlined in their book -Blue ocean strategy: How to create uncontested market space and make the competition irrelevant-there are six conventional boundaries of competition. Thoughtful consideration of these boundaries can help a company move from competing within to competing across (diverging and differentiating).

The conventional boundaries of competition ​are: Industry, strategic group, buyer group, scope of product or service offering, functional-emotional orientation of an industry, and time. The blue ocean strategic analysis guides a company through each of these boundaries of competition in order to develop a value innovation.

But in order to evaluate where the company is with regard to each of these competitive boundaries, it is necessary to have data. Market research techniques can be used to collect and analyze data that is relevant to each of these boundaries of competition.

Where Does Differentiation Fit In?

How do you know a blue ocean company when you see one? The first clue is differentiation. Blue ocean strategy starts with the premise that a company should strive to differentiate itself from its competition-not by focusing on doing the same things as its competitors, only better. But-instead- doing what competitors are not doing, and doing that better than anyone in the same business in the market can do. In other words, being a better copycat is not the goal. A different framework is called for, though it can use ​​​existing framework as scaffolding. Blue ocean strategy is not about invention, but it is often ​about innovation, and it is definitely about thinking about things in different ways (reconceptualizing) and preparing to preempt future imitators.

What is Meant by Value innovation?

In the Blue Ocean lexicon, the goal of Blue Ocean strategy is known as value innovation. When a company can substantially differentiate itself from competitors and do so at a lower cost, it has created something known in the Blue Ocean vernacular as value innovation.

The innovation has to generate market value that benefits both the company and the customer. It does this by eliminating or reducing services or products or features that are less valued in the market.

Good Blue Ocean strategy is characterized by three fundamental attributes: Focus, divergence, and a compelling tagline.

Focus. A value curve helps a company to conserve resources and focus on the most important aspects of the strategy. Without a value curve reference, a company could work away all day-in a scattered way-on all of the key variable of competition-or worse, the company could revert to the old ways of doing business. A well-executed blue ocean analysis will produce a value curve that will highlight the areas that will ​generate the highest competitive gain. The value curve areas of focus are detailed and analyzed in a four actions framework that is proprietary to Blue Ocean strategy.

Divergence. The Blue Ocean strategy is designed to help a company create divergence in its offerings or manner of doing business. If a Blue Ocean strategy has not been well-designed, it will be evident in the value curve. A Blue Ocean shows how the value curve diverges from the curve shapes of competitors-in fact, a value curve created by a Blue Ocean strategy will stand apart quite visibly from a great many of the variables and attributes being compared across the competition.

Compelling tagline. Selling good strategy requires a strong elevator pitch and a clear-cut, compelling tagline is required to sell good strategy. A good tagline will deliver a clear, single message and to truthfully advertise the offering