Blue Ocean Strategy Refined: Focus, Divergence, and a Compelling Tagline

Author: tracysigler | Posted: April 22nd, 2011 | | Tags: , , , | No Comments »

“Focus, Divergence, and a Compelling Tagline. These three criteria guide companies in carrying out the process of reconstruction to arrive at a breakthrough in value both for buyers and for themselves.” – Blue Ocean Strategy

Last time I wrote about Blue Ocean Strategy I covered how the Eliminate-Reduce-Raise-Create framework can help companies develop a “value curve” on the “strategy canvas” that will differentiate them from Red Ocean competitors. Going through that process helps point out where you may be over-engineering your product (spending time and money on things customers don’t really care about) and how you can deliver more value at a lower cost.

Figuring that out for your business is a fantastic achievement, but, according to the authors, there are three more essential characteristics of a good strategy.

Focus

What were we talking about? Oh yeah… Let’s say we’re looking at a strategy canvas (see chart in post). The value curve, points plotted low-to-high for various competing factors such as price, convenience, selection, for a typical Red Ocean strategy would look relatively flat compare to a Blue Ocean. Essentially, Red Ocean companies are trying to compete on all the traditional factors and they end being middling on most.

Blue Ocean companies on the other hand will have a value curve that is radically unbalanced. Competing factors are either very high or very low.

The authors use Southwest Airlines as an example. Southwest focused on “friendly service, speed, and frequent departures” while most airlines tried to compete with meals, lounges, and other things customers don’t care about as much. As a result Southwest was able to lower prices and suddenly they were competing with car travel, not other airlines. Blue Ocean.

Divergence

If you are going for a Blue Ocean Strategy your value curve will diverge from the mainstream. You’ll become less average, and closer to unique or “differentiated.” Clearly focus helps here, as does eliminating and reducing the unwanted, and costly to produce factors. Probably even more important they create new buying factors where there is no competition. For example Southwest “pioneered point-to-point travel between midsize cities” no longer relying on the hub-and-spoke system.

Compelling Tagline

The authors point out that “a good strategy has a clear-cut and compelling tagline.” Oh man. This one can be tough, and it’s something few companies have even if their strategy deserves it. The authors suggest that Southwest could use “The Speed of a plane at the price of a car–whenever you need it.” What could other airlines say? “We’re like all the rest and our prices are high.”

There’s some homework for you, and us. Come up with a compelling, and authentic, tagline. If we can’t do that, maybe it’s time to go back to the strategy drawing board.

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