Blue Ocean Strategy
The four questions that are critical for developing blue ocean strategy:
1. What are the factors, which your industry takes for granted, but should be eliminated?
This question helps you to think about removing certain elements which often organizations within your industry utilize as their competitive differentiators.
All those factors are usually taken for granted however they no longer truly provide much value for your customer.This is example of all those elements that have been used for a very long time within your industry and therefore are simply a part of everyone’s product or service.
Typically whenever you consider creating products within your industry you would probably include all of the existing elements however this question can help you stay away from this line of thinking by considering certain elements for elimination.
2. What are the factors that should be reduced below your industry standard?
This question helps you to evaluate if certain services and products have too many features because they are over designed in an effort to be competitive in each possible element within your industry.
By providing this type of product and service businesses over deliver and over serve the customers however in many cases without adding significant value for the customer.
At the same time organizations spend much more resources than the customer really demands and thus they accumulate more costs and lose their competitiveness.
3. What are the factors that should be raised above your industry standard?
This question helps you to discover the existing compromises which are pushed to the customers within your industry. There are always some elements where customers don’t get enough of some features that happen to be really important for them mainly because there is no such a product or service in your industry.
Simply by identifying these types of elements you are able to raise them at a higher level compared to any of your rivals which makes you a dominant leader within this product or service segment.
4. What are the factors that are not currently offered in your industry but should be created?
This question helps you discover completely new sources of value for your customers. By discovering brand-new value elements for your customers you are able to change your entire strategic position in your industry and make a lot of standard elements less relevant.
The first two questions enable you to decrease your current cost structure in comparison to your competitors. The next two questions enable you to elevate the customer value and by doing that create a whole new demand for your product or service.
The book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne was first published in 2005. The Blue Ocean Strategy recommends that a successful business should be able to develop a new demand in an uncontested markets rather than compete directly with other competitors in the industry.