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ISSUE 4, 2013
DEAR BOS COMMUNITY,
We are pleased to announce the launch of our newly remodeled Blue Ocean Strategy website. A clean interface,
streamlined navigation, and intuitive controls will help you to discover
the world of blue ocean strategy in a bright and interactive new way.
The new website has an exciting new resource – the BOS Electronic Library ("eLibrary") –
housing over 700 news articles, academic articles, and teaching materials
from around the world that can be filtered by industry, region, or a
specific BOS tool. You can read more about the eLibrary in this issue's In
Focus section.
We are also happy to announce that a publisher in Kazakhstan has just
signed on to publish Blue Ocean Strategy in Kazakh, making it Blue
Ocean Strategy’s 43rd language translation. In addition, Blue Ocean
Strategy was selected as one of the top 20 books that have shaped
Polish leaders by ThinkTank, a platform for dialog and discussion on
effective management.
We hope that these new developments and enhancements will help you and your
organization swim towards a blue ocean. This issue of the Blue Ocean
Strategy Global Current features both established companies and start-ups
trying to create uncontested market space. The Zoom-in section looks
at real estate development, introducing innovative companies, which
embraced blue ocean strategy in their planning and execution. We hope you
will find this issue both inspiring and informative.
Blue Oceans Ahead!
The BOS Team
www.blueoceanstrategy.com
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Our newly redesigned website has a completely new resource:
the BOS Electronic Library ("eLibrary"), a
collection of over 700 articles on blue ocean strategy from around the
world. Updated regularly, the articles come from over 60 countries and
are written in over 30 languages, making it a truly global resource for
anyone interested in diving into blue ocean theory and practice.
For easy navigation, the eLibrary features a number of filters to target
your area of interest whether it is date, geography, specific BOS concept
or tool, industry, or language.
We invite you to familiarize yourself with this new resource by watching
our orientation video tour.
In the eLibrary, you will find three types of content:
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BOS
News Articles going back as far as 1997,
cataloguing developments in blue ocean strategy across industries,
disciplines, and regions;
Academic
Articles – collected theoretical and empirical research
on the topic of blue ocean strategy;
Teaching
Materials along with an easy method to request BOS
proprietary videos and lecture slides, as well as direct links to
publisher resources.
We encourage you to send us your feedback and hope that this new
resource provides you with inspiration to break free from the red
oceans of ruthless competition and sail into the serene blue.
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WHEN
GROWTH IS DECEIVING
Founder and co-CEO of Panera Bread, Ron Shaich, describes the red ocean
that foodservice companies are swimming in and why his company's growth
was deceiving at first sight. "Most foodservice companies compete
in a bloody, shark-infested red ocean," says Shaich. "The big
fish are always looking to make a quick meal out of a laggard; schools
of hungry new entrants are always anxious to tear into you. Thanks to
the competition, it's not hard to lose more customers than you're
gaining, for a net decrease. To thrive in those hyper-competitive seas,
a company must continually unleash value-creating innovations. If
you've got a mature retail concept and you simply continue with what
has worked in the past, plus a little more, competitors will take a
bite out of your customer transactions. The size of the loss will vary
by company and market. But rest assured, in our industry, failing to
create game-changing products and services will likely lead to a
significant drop in customer transactions. With that, the steep descent
into the red begins."
Read more
HBR Blog Network, July 3, 2013, United States
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TO
HAVE A PORTFOLIO OF 7-8 CARS IN INDIA WITH AN ENTRY LEVEL CAR AT THE
HEART OF IT: CARLOS TAVARES, COO, RENAULT
The COO of Renault, Carlos Tavares, comments on the question of whether
it is too late for Renault to enter the small car space in India:
"The small car market in India is red ocean. We will have to
create something which is blue ocean to distinguish ourselves. So if
you tell me we are very late in the small car space, I would say, yes,
you are right. The reason why we are taking time is because we are
trying to create something which will help us create that blue ocean
within that vast red ocean."
Read more
The Economic Times, June 13, 2013, India
MICROSOFT AND NOKIA: WINDOWS PHONE ADVERTISING WORKING
A breakdown of the latest Windows Phone from a red ocean/blue ocean
perspective. On the one hand, trying to compete with the iPhone by
offering a range of apps could be considered red ocean. However, innovative
thinking and a partnership with Nokia redefined the marketplace by
refocusing away from the specifications other smartphone makers
pursued. The article suggests that Microsoft may finally be gaining
traction with a blue ocean strategy.
Read more
Seeking Alpha, June 5, 2013, United States
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THE
MAN WHO SAVED MY COMPANY
The story of Drew Greenblatt, the owner of a bagel basket factory who
created a successful blue ocean in manufacturing. An incidental order
from Boeing to make a wire basket to hold small aircraft components
spurred Mr. Greenblatt to evolve into a manufacturer of
precision-engineered wire baskets and sheet metal fabrications. Mr.
Greenblatt knew that he needed to pursue a new market, describing the
red ocean, in which too many manufacturers are trying to compete on
cost, in contrast to a blue ocean, where there is no competition
because of the superior value of offerings. Greenblatt's Marlin Steel
Wire Products is now a $ 4.4 million company, a made-in-America shop
that exports to China and Taiwan.
Read more
Inc., June 11, 2013, United States
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BLUE
OCEAN STRATEGY TESTIMONY – KIPLING BAGS SUCCESS STORY
Founder of Kipling, Paul Van de Velde, describes a blue ocean strategy
that lead to the enormous success of his high quality backpacks and
bags brand. At the time of company launch in 1987, competition was
based on functionality and durability, but Kipling was able to carve
out a blue ocean for itself by switching from a functional to an
emotional orientation. According to the company, more than 35 million
people in the world own at least one Kipling bag.
Read more
Vlerick Business School blog, July 5, 2013, Belgium
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NEWPORT
PONTOONS IS SEAWORTHY BUSINESS
"Why struggle in the 'Red Ocean,' where the competition devours
itself?" - a likely question that the owners of Newport Pontoons
asked themselves before they decided to sail a blue ocean - literally.
Newport Pontoons created an uncontested market space by offering an
affordable way to enjoy a relaxing time on water without investing in a
motorboat. The company's concept made quite a splash in the Newport
Beach area.
Read more
Newport Beach Independent, June 29, 2013, United States
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HOW
AN INDONESIAN GAMER BECAME AN ENTREPRENEURIAL MILLIONAIRE
Inspired by Blue Ocean Strategy, Kevin Mintaraga, decided to
start Magnivate Goup, an Indonesian digital agency that was acquired in
2012 by WPP, the world's largest digital marketing and advertising
group. Founder and CEO Mintaraga explains, "At that time I got
curious about what is the 'blue ocean' in Indonesia? After reading the
book, I met my friend who is a marketing manager at Nokia. He told me
to help him with interactive marketing, as his HQ asked him in 2008 to
spend 5% of his total budget on it. That was huge in 2008, when Nokia
was the market leader, with Blackberry and Samsung still new to phones.
I realized then that even a big company like Nokia doesn't have someone
who can do web marketing for them in Indonesia...that is the blue ocean
I want to swim in."
Read more
TECHINASIA, July 8, 2013, Indonesia
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"More
frequently than we realize, simply relying on incremental improvements,
which is tantamount to defending the status quo, often results in
negative growth — even when you think you're getting a modest gain.
With market and competitive conditions more punishing than ever, a
strategy based on playing it safe is often more risky than betting on
an unconventional idea."
Ron Shaich
FOUNDER & CO-CEO, PANERA BREAD
HBR Network Blog
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MAJOR
MID-YEAR CORRECTION NECESSARY
In light of significant shifts occurring in the economy, Forbes
presents fresh trends for Q32013 and beyond, among them blue ocean
strategy. Blue ocean strategies, "more influential than
ever," can address many of the challenges that accompany the other
trends.
Read more
Forbes, June 18, 2013, United States
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GOVERNING
INNOVATION IN PRACTICE – THE ROLE OF TOP MANAGEMENT
The role of the C-Suite is critical in exercising a company's
innovation governance responsibilities and fostering new guidelines. An
important element of innovation governance is initiating ways to
redefine value, which requires broadening the scope of the search for
opportunities. This can be accomplished by focusing on creating new
market space, an underlying principle of blue ocean strategy.
Read more
InnovationManagement, June 7, 2013, Switzerland
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BLUE
OCEAN STRATEGY BOOK REVIEW
"I've enjoyed hundreds of books, but very few have been as
transformative to my career as Blue Ocean Strategy," says
Mark DeVerges, an executive recruiter in the construction industry. His
company, a market leader, found itself swimming in a red ocean once the
recession hit. After reading Blue Ocean Strategy, DeVerges
started to look for uncontested market space and found it in
international recruiting opportunities in areas less affected by the
financial climate. The strategy paid off and it turned out to be one of
the company's most successful operations. DeVerges became the
"highest grossing rookie" in the company's history.
Read more
Kimmel & Associates, June 29 ,2013, United States
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VISUALIZATION:
NEW WAYS TO WEAVE DATA INTO YOUR BUSINESS
Part 1 of a three-part series on blue ocean strategy for decision
visualization, the author believes that rethinking visualization
creates opportunities to incorporate data into business in completely
new ways that can aid decision-making. To pursue the road of
transformation, a strategic framework is needed to help a team break
away from long-standing principles, governance models, roles, and
responsibilities. The author believes that blue ocean strategy is a
strong foundation for transition.
Read more
BeyeNETWORK, June 18, 2013, United States
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5
WAYS BLUE OCEAN STRATEGY CAN BOOST YOUR BUSINESS
What does it mean to value innovate and how do you find your own blue
ocean? This white paper proposes five ways to reach new markets and set
your company up for growth. Read on to define a new strategy for
growing your business, identify the opportunities that already exist
within your market, and continuously value innovate.
Read more
Silicon Cloud, June 14, 2013, United States
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OPINION:
THE BIG QUESTIONS FOR BOARDS
The aged care industry in Australia is facing formidable challenges.
Blue ocean strategy insights related to customers and noncustomers are
presented to answer one of three big questions boards should address in
light of upcoming reforms and a changing business environment: Are we
doing enough thinking for our customers?
Read more
Australian Ageing Agenda, July 3, 2013, Australia
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Featured Academic Research
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TRANSFORMING
THE NATURE AND SCOPE OF NEW PRODUCT DEVELOPMENT
Theme:
Theoretical discussion integrating blue ocean strategy in the new
product development process.
Summary: The
authors address the issue of the high failure rates of new products
that only tend to increase as competition intensifies in an industry.
They discuss common techniques employed by companies for mitigating the
failure risk associated with new products, such as line and category
extensions that leverage brand equity. They argue that while new
product development processes have become more structured and reliable
over time – incorporating the voice of the customer, market
segmentation, differentiation, and gated development stages – these
approaches ultimately lead to mere incremental innovations, which still
face intense competition. To avoid the competitive morass, the authors
propose rethinking the product development process by incorporating
blue ocean strategy and specifically recommend performing a Six Paths
analysis before developing any new product ideas. Combining blue ocean
strategy's Six Paths and Four Actions frameworks into a 'Strategic
Opportunity Product Development (SOPD) matrix,' they attempt to equip
product developers with a tool that can be easily integrated early on
in process to reduce the risk of failure.
Reference:
Pitta, Dennis, and Elizabeth Pitta. "Transforming the Nature and
Scope of New Product Development." Journal of Product & Brand
Management. Vol. 21, issue 1 (2012): 35-46.
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Blue Ocean Strategy for Nations
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NATIONAL
BLUE OCEAN STRATEGY: STRATEGIC PARTNERSHIP BETWEEN POLICE AND ARMED
FORCES
The two highest ranking officials in the police and armed forces of
Malaysia, Inspector General of Police Tan Sri Khalid Abu Bakar and
Chief of Defence Forces Tan Sri Zulkifeli Mohd Zin, discuss the impact
that National Blue Ocean Strategy initiatives have had within their
forces and on the general public.
Read more
New Straits Times, July 1, 2013, Malaysia
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DOING
BUSINESS IN SRI LANKA: IS IT A RED OCEAN?
The author reflects upon the latest World Bank release of the
"Ease of Doing Business Index," which elevated Sri Lanka to
the 81st placefrom 96th. This jump, attributed to recently introduced
reforms, should have had a positive impact on the inflow of foreign
direct investment (FDI), but to the contrary, FDI has decreased over
the period. The author ponders whether Sri Lanka is swimming in a red
ocean and gives potential explanations as to why.
Read more
Daily Mirror, June 5, 2013, Sri Lanka
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NATIONAL
BLUE OCEAN STRATEGY: UTCS PROMOTE PROSPERITY
The Urban Transformation Centres (UTCs), established under National
Blue Ocean Strategy, aim to facilitate access to both government and
private agencies without having to visit multiple locations, which is
time-consuming and costly for most urbanites. The UTC offers unique
urban services in every state capital in Malaysia. The UTCs, as all
initiatives under National Blue Ocean Strategy, meet three required
criteria: high impact, low cost and rapid execution.
Read more
New Straits Times, June 17, 2013, Malaysia
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吳清基勉學子「趁年輕闖世界」
(Wu Qingji Urges Students to Venture Into the World While They're
Young)
The former Minister of Education of Taiwan has encouraged students,
regardless of their further studies and careers, to create their own
blue ocean opportunities where competition is made irrelevant.
Read more in Chinese
United Daily News, June 5, 2013, Taiwan
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NATIONAL
CHENG KUNG UNIVERSITY INITIATES HEALTH DATA ANALYSIS STRATEGIC ALLIANCE
The National Cheng Kung University Research Center for Health Data
(NCKU RCHD) has initiated the Southern Region Health Data Analysis
Strategic Alliance to provide more detailed and accurate public health
data and medical care services by gathering experts in the southern
region of Taiwan and fully utilizing the functions of the center. The
initiative, based on blue ocean strategy, aims to build a communication
and collaboration platform to enhance the overall quality of medical
and health care services research.
Read more
National Cheng Kung University, June 10, 2013, Taiwan
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Zoom-in:
REAL
ESTATE DEVELOPMENT
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OUTLET
MALL JUST THE BEGINNING OF $300 MILLION BLUE VALLEY DEVELOPMENT
Chesterfield Blue Valley is home to the 50-acre outlet mall, St. Louis
Premium Outlets, currently under construction. Dean Wolfe, the
principal of Chesterfield Blue Valley comments on the origin of the
Blue Valley name, "When you drive down from Chesterfield Mall and
you're looking across the Valley, it sort of looks blue and hazy –
because of the humidity, probably." But the real inspiration came
from the book, Blue Ocean Strategy. "We don't have an ocean
here, but we have a valley. And what we really liked about the location
was by being at the west end and at the bridge – the gateway – we were
really creating a situation where the other competition was going to be
irrelevant," said Wolfe.
Read more
Newsmagazine Network, June 29, 2013, United States
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SUCCESS:
HOME BUILDING STILL IN THE FAMILY
Lockwood Homes, a New Zealand company, builds houses that can endure
even the most extreme weather conditions. Andrew La Grouw, who is the
third generation in the family business, credits the success of the
company to its unique strategy of using timber-framed construction
rather than adopting the Australian methods used by other companies.
"I think that's really been our survival secret for the last few
years. We've been watching the other building companies who are all
doing the same thing and it's a very blood-red ocean out there,"
says La Grouw. "They're killing each other and we've sort of been
able to sail through the blue seas and stick with what we're good at,
which is quite different."
Read more
The New Zealand Herald, June 7, 2013, New Zealand
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'FIREHOUSE'
IN OKLAHOMA CITY'S DEEP DEUCE IS SET TO BECOME NEW HOME
An Oklahoma City homebuilder decides to swim toward a blue ocean and
draws inspiration for a unique firehouse design from Disney World. Ron
Walters comments on his competition: "They all want to go out in
the same additions. I want to get out, not deal with all that
competition." His strategy has borne fruits. After building and
successfully selling dozens of homes in the rebounding community,
Walters is finding his blue ocean once again by targeting the area
overlooked by other homebuilders.
Read more
NewsOK, June 18, 2013, United States
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ONES
TO WATCH: PROXIMITY KITCHENSYSTEM
Pete Walker, founder of Proximity Kitchensystem, a company that offers
a completely new approach to the design and use of residential
kitchens, cites blue ocean strategy as being instrumental in shaping
his approach to launching his company. The Proximity Kitchensystem
reduces or eliminates unnecessary options, elements, and configurations
found in both domestically produced and imported mass manufactured
kitchen cabinetry. It then improves and adds upon what remains. The
result is an elegant combination of unimposing unit size and maximal
functionality.
Read more
Interior Design, June 24, 2013, United States
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JUST
RELEASED:
BLUE OCEAN STRATEGY
ARRIVES IN KAZAKHSTAN
We are pleased to announce that Blue Ocean Strategy just signed on
its 43rd language, Kazakh. A warm welcome to future readers from
Kazakhstan.
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CONTACT US
We want to hear from you!
Is
your company applying BOS?
Do
you know of a story that should be featured in the newsletter?
Contact us at
suggest@blueoceanstrategy.com
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