Articles
Blue Ocean Strategy – Escaping The Competition to Accelerate Profit Growth
21st Jan 2021
At our July meeting Andy Davison gave the group an introduction to Blue Ocean Strategy, the most significant development in strategic thinking since the era of competitive strategy began in the 1980s. He described the shift in mindset required to produce a rapid and sustainable growth in profits, noting that good strategy works even in unattractive markets or declining industries.
Instead of focusing on out-performing the competition, the most successful growth companies concentrate instead on:
- Addressing the total potential demand, including unmet demand from those who are poorly served or not served at all by the current industry.
- Breaking long-held industry assumptions about the scope and nature of its offerings to produce compelling total solutions that meet demand aggregated from many sources.
- Shifting the basis of appeal and challenging industry cost structure so that new offerings can create simultaneously a leap in value to buyers and radically lower costs – leading to exceptional prospects for profitability.
Citing many examples, Andy showed how the tools of Blue Ocean can be used systematically to modify a company’s offerings to increase their future profit potential. In smaller teams, members then applied the tools to their businesses.