Getting blue is not always a negative thing… Adopting the Blue Ocean Strategy model is a way to develop a company, in a different manner than in the 20th century.
Marc Sniukas, there are different “strategy models.” What is really new and interesting about the Blue Ocean?
“Most of the strategy models we use today have been invented in the 20th century when the economic circumstances and the objectives companies tried to achieve were quite different ones. Traditional strategic planning focuses, as the term already suggests, on planning the next three to five or even 10 years ahead. Now, we all know that the current economic and competitive situation changes much too fast and in shorter cycles. Other classic tools, like Porter’s five forces, for example, focus more on analysis than on strategy development and the suggested generic strategies have proven to be no longer the only ones that work today. Porter suggests a company has to make a trade-off between either being a differentiator or being a cost leader. Nowadays we see companies achieving both.
I’m not saying that these tools have no value at all. We just need to reflect better on why we use them and whether they really do make sense for every company in every industry. I would argue that the five forces, for example, are not really suited for SMEs (Small and medium enterprises). Blue Ocean Strategy addresses the challenges of the traditional way of thinking about strategy by bringing not only new tools but also a new way of thinking, which we’ll explore at the workshop.
Is it possible to use some parts of the model? Or is it a whole process, with every step “mandatory”?
“You can definitely use only certain tools that may be the most appropriate ones in your situation. Especially if you’re unsure whether you really want to spent the time and resources on a Blue Ocean Project, you might be willing to start slowly by trying out certain things and once you gained more confidence you can go for the whole process. Obviously you get the biggest benefits by going through step by step to be sure that you address all the necessary areas. There really are no shortcuts when you want to develop a new strategy that also is really promising to be successful.
Defining a strategy sounds good for very big companies. Is it something a SME can do? Creating a new market means having a lot of resources.
“Well, yes and no. First of all I believe that every company has a strategy. It might not be very explicit, but even in a small company somebody usually has the ideas and a plan on what to achieve and assumptions about what needs to happen to achieve these objectives. And developing a new strategy always needs at least some time investment from management and other stakeholders. Otherwise it simply can’t get done. But that’s just like with any other project in your company, isn’t it? And as we’ll see in the workshop, my suggestion for BOS is to start with an area, maybe a product, maybe a service, maybe a specific group of customers that does not perform really well at the moment. So you need to give it some attention anyhow to increase performance or you make the decision to let it die. And if you want to increase performance, and the traditional strategies haven’t worked so far, why not try a new approach? And then I would suggest to try the new approach first only on a small scale, maybe only with one product, or even one customer to see how it works, but you commit a lot of resources, be it time or money.”