Tuesday, September 25, 2007

Blue Ocean Strategy: Not your father's strategic planning process

Blue Ocean Strategy is changing the way that forward looking companies are formulating strategy and doing strategic planning. And it is not strategic planning as usual. Traditional strategic planning typically marches out the organization’s financial data and then an effort is made to look at the strengths, weaknesses, opportunities and threats, based on historical and current information. Some of these efforts may bring incremental improvements in a company’s competitiveness or bottom line, they do not ensure long term growth or reveal new opportunities. Many organizations will go so far as to survey customers to see what they want. These companies brag that “We give our customers what they want and more”. The problem is that customers don’t know what they want or don’t want, until it is presented to them. How many customers asked for a desk top computer before it became available? Or a mobile phone? or a larger golf club head? Or even a car, or airplane? or an upscale circus? Yet, when presented with these new products, customers clamber to take advantage of them, leaving the company giving the customer only what they think they want, in the dust. Customers will tell you they want more of what you have, at a lower price. There goes your profit.What is the best way to plan? Focus on the big picture, not the numbers, and reconstruct market boundaries to include customers not being served by your competitors. Dr. Sarah Layton, CEO of Corporate Strategy Institute, is one of a few people world wide qualified in Blue Ocean Strategy tools, concepts and processes by the Blue Ocean Strategy Initiative Centre, London. Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant, based on the best selling book of the same name by Chan Kim and Renee Mauborgne, shows you how. - (CSI, 6 Sep 07)

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