Change The Playing Field

I just finished reading Blue Ocean Strategy. While I love to read, and there are many books that I take snippets from, Blue Ocean Strategy hit me a bit deeper.

The premise of the book is that many companies slug it out for market share, and define their markets in the exact same way. The main way to win in this game is to reduce costs and execute better than your competition. Another is to outspend- whether on branding, additional features and functionality, or other aspects to try and differentiate.

The authors central thesis: create new markets and compete differently.

Namely, change the game on your competition. Don’t compete against them, redefine the field of play, offer up a different game. Play where they are not playing.

Think about how many companies compete in the battle for a limited share of the pie: automobiles, computers, laundry detergent… this list goes on and on.

You might be saying–

• How can a traditional sector change the playing field?
• It is easier to change and define a new emerging sector
• Economies shift over time… computers could once compete in this ‘blue ocean’ but they are all the same now, they have to slug it out

I support the authors in their postulation.

Here is a fine example…. What is a more traditional business than grocery? Innovation really does not apply right--- you go to get your food, and want a reasonable price, right?

Whole Foods said wrong. They changed the playing field. While traditional grocers all offer the same staples, and compete on value pricing and convenience, Whole Foods changed the game. As anyone who shops there knows, price is not their competitive advantage, nor can you find the litany of P&G or Kellogg products. Whole Foods determined there is a customer set that does not think these points are important. Whole Foods determined the experience, the value system that Whole Foods stands for, the variety of products you can find at Whole Foods that you cannot elsewhere (unless you hit specialty shops all over town), are the strong points. They changed the playing field.

There are many more examples like this, and the book does a great job in bringing many to life. To be certain, the process is not easy, and takes fortitude, investments, and embracing a certain level of risk.

As can be seen though, the rewards can be great.