One of the most popular tools in my armament for innovation is the under-utilised Blue Ocean Strategy concept. Because the concept is also a book, most of the stuff you find on the internet only pushes more people to buy a copy rather than how to actually use the ideas encapsulated therein. So, because I reckon it’s one of the best tools there is, I’m gonna explain here how to actually use it in a very practical sense. First – you’ll need to look at this graph, taken from blog.delaranja.com. It highlights the Blue Ocean Strategy canvas of the Wii, PS3 and XBox.
This is the most useful tool from the BOS hymn-book. Use it in the following ways.
1) Map out the key factors of the industry you are trying to play in. You can do this via a number of methods, but PEST analysis is probably one of the best ways. Ask yourself, what are the table stakes in this industry? What are the norms for the industry as it currently stands? It always works best if you can ask an old hand in the industry to gain these.
2) Once you have figured out the key factors of the industry, place them on the ‘x axis’ of your blank strategy canvas.
3) Now, place the key competitors on your strategy canvas. If a competitor has a lot of one particular factor, place them quite high on the canvas (and visa-versa.) In the example above, both the PS3 and the XBox had high amounts of Storage, without having as much storage as a normal PC. Thus, the points have been placed mid-‘y-axis.’
4) Once you have mapped your main competitors on the canvas, you can see where the current competition is playing, and which parts of your business you can change to create a really unique value proposition.
In this case, Nintendo went through and created a game con-sol which was 1) lower in cost than the super expensive PS3/XBox 2) had more, simple, games that enabled the whole family to play and 3) have a simple interface which led to simple, unique game-play. You’ll notice that Nintendos Wii has blown PS3 and XBox out of the market. Why? And why haven’t the aforementioned game con-sols been able to take back their market share? Simple – because the Wii sold to people who never would have purchased a PS3/XBox anyways. They created a new market – a Blue Ocean – by simply refusing to play the game of intense, highly complex game play. And that, ultimately, is the strength of the BOS tool.
Why play in a red ocean, full of competition, price wars and continuous improvement when you can create a new, completely profitable blue ocean?You can use the Blue Ocean Strategy Canvas to achieve these same results. It’s a key tool, and helps immensely to play the game of intrapreneurship. Good luck! Flick me and email for a Word Template if you like.