Finding Blue Oceans While Avoiding the Use of Harvard Business School’S Michael E

Companies often compete with one another to gain shares in crowded markets, but what if there was a more effective way? In this lesson we look at a different approach: the Blue Ocean Strategy, which avoids competing and instead looks to create demand in untapped markets. The History of the Blue of Ocean Strategy When we think of competition between companies like Coke and Pepsi or Walmart and Costco, we think of competitors fighting to get the biggest share of the market. The companies try to outperform their rivals through more aggressive advertising, price wars, and other tactics. The Blue Ocean strategy is an entirely different approach. W. Chan Kim and Renee Mauborgne came up with the idea after they conducted a study of 150 strategic moves spanning 100 years and involving 30 industries. They found that the best option would be for companies to generate demand in a new market space rather than to compete for the same market space. They published these findings in a 2005 book called 'the Blue Ocean Strategy', which detailed what the strategy meant, examples of why other strategies are not sustainable, and examples of companies succeeding using their methods. Before the introduction of the Blue Sky Strategy, the existing theory on competition was headed by Michael Porter who claimed that successful businesses were either niche-players on a market or low-cost providers. The essence of the Blue Ocean Strategy If we think of all the companies in the world, they all have their own markets and compete in these markets with other rivals. The existing markets with competition are called red oceans. A good example of a red ocean market is the automotive and airline industries. Companies in these markets use similar tools such as advertising and pricing strategies to gain a greater market share. However, with lots of competitors in a market the struggle to gain greater share is even tougher, meaning companies spend more on advertising, marketing, improved customer service, or cut prices to attract more customers. All of these activities result in heightened competition and lower profits, meaning the chances for growth are slim, at best. The competition is so aggressive that it is referred to as cutthroat competition. The red ocean gets its name from the idea of oceans being red with blood from cutthroat competition. Nowadays, red oceans seem typical of most industries, implying the prospects for growth are not great. So what other options could companies consider? The blue ocean refers to industries that have yet to be discovered by companies. Industries which don't exist yet also have markets without competitors. Rather than fighting for the same customers, in blue oceans the demand is created and a market emerges. The blue ocean approach is based upon the concept of value innovation which was also introduced by the authors of the Blue Ocean Strategy, Kim and Mauborgene. The concept seems to go against all current business rationales as the message is not to compete. Instead, companies look to find untapped markets through creating a new demand whilst at the same time they seek to keep costs low. In this way, the company gains new markets and the buyer gets value for money. Finding Blue Oceans While avoiding the use of Harvard Business School’s Michael E. Porter's name, Kim and Mauborgne attack the famous "five forces" market analysis head on. Porter’s model looks at specific factors that help determine whether a business can be profitable based on other businesses in the industry. Advocates of Kim and Mauborgne’s strategy would say this is a tactic that promotes merciless competition, remaining in the red waters. The key to exceptional business success, the authors say, is to redefine the terms of competition and move into the "blue ocean," where you have the water to yourself. The goal of these strategies is not to beat the competition, but to make the competition irrelevant. To discover an elusive Blue Ocean, Kim and Mauborgne recommend that businesses consider what they call the Four Actions Framework to reconstruct buyer value elements in crafting a new value curve. The framework poses four key questions: Raise: What factors should be raised well above the industry's standard? Reduce: What factors were a result of competing against other industries and can be reduced? Eliminate: Which factors that the industry has long competed on should be eliminated? Create: Which factors should be created that the industry has never offered? This exercise forces companies to examine every factor of competition, guiding leaders to discover the assumptions they unconsciously make while competing. They can then search for blue oceans within their industries and make the shift. Swiggy, Nykaa, Flipkart, I Tunes, Maruti etc Case Study: Kurl On: Ad Campaign In May 2014, Ogilvy & Mather India (O&M), one of the leading advertising agencies in India, found itself in the eye of a storm over a Kurl-on ad it had created to highlight the product proposition of bouncy mattresses. The ad, one in a series of three print ads titled ‘Bounce Back’, featured a string of cartoon images of Malala Yousafzai, the young Pakistani student activist who was shot and injured seriously by the Taliban. The ad depicted Malala being shot in the head, falling backward covered in blood, being put on a drip, then bouncing off a Kurl-on mattress and recovering to accept the Nobel Peace Prize. The ad sparked global outrage and was widely criticised as being offensive and for using a horrific tragedy to hard sell a product. About O&M O&M, one of the leading advertising, marketing and PR agencies in the world, had more than 500 offices in 126 countries globally as of 2015. The New York-based agency was founded in 1948 by David Ogilvy, considered the father of advertising. According to its founder, an advertiser’s job was to come up with advertising that sells, and the advertising that sells best was advertising that built brands. Over the years, O&M has created some brilliant ads with catchy punch-lines and unique concepts that earned it accolades from all quarters. It built some of the most recognisable brands in the world, including Ford, Shell, Barbie, Pond’s, Dove, IBM and Kodak. In India, O&M is headquartered in Mumbai. It is headed by Piyush Pandey, the agency’s Executive Chairman and Creative Director of India and South Asia operations. Pandey has been with O&M since 1982. O&M is a leading ad agency in India and the creative mind behind successful brands such as Vodafone, Cadbury, Asian Paints and Fevicol. About Kurl-on Kurl-on, headquartered in Bangalore, is one of the largest producers of mattresses in India. The company’s products include mattresses, pillows, furniture and other home décor products. ‘More bounce and less wear and tear’, is the unique selling proposition (USP) of Kurl-on mattresses. The company also exports its products to a number of countries. In 2014, to retain its position as the major player in the Indian mattress market and to enhance its global presence, Kurl-on repositioned itself by emphasising the ‘bounce’ attribute of its mattresses. The campaign The Kurl-on ads sought to convey the message that a good night’s sleep on a spring mattress helped a person recover remarkably, both mentally and physically, from any kind of damage. Kurl-on wanted to highlight the ‘bounce’ attribute of its mattresses by linking them to famous personalities who had bounced back in life after major setbacks. O&M decided to use three iconic figures who were globally acclaimed and were looked up to – Mahatma Gandhi, Apple Inc.’s founder Steve Jobs, and Malala – for the three ads. To add a touch of humour, the characters in the ads were depicted as cartoons. The Malala ad sought to show how she had bounced back after being brutally shot by the Taliban. As a young girl, Malala had defied the Taliban after the group issued a fatwa banning the education of girls in Pakistan. She became a major advocate for women’s right to education and an inspiration for many as she continued defying the Taliban despite receiving death threats. On October 9, 2012, Taliban terrorists shot the 14-year-old Malala in the head. It was only after months of surgeries in the UK and rehabilitation that she was able to make a full recovery. Thereafter, Malala became a global youth icon. The other two ads that were part of the campaign showed a young Gandhi being thrown out of the train and bouncing back to become the Father of the Nation, and Steve Jobs bouncing back after he was kicked out of Apple. The punch-line for all the three ads read ‘Bounce Back’. According to O&M, the ads depicted how successful people bounced back in life by turning adversities to their advantage and going on to become legends. The ad agency felt that “bounce back”, as a figure of speech, also lent itself effortlessly to the spring mattress category. In May 2014, in order to enter the Kyoorius Advertising and Digital awards, O&M uploaded the ads on the online forum Ads of the World. The backlash The ad featuring Malala went viral. The ad, which was reportedly not run in any paid media, spread like wildfire across the Web. It drew flak from all quarters for its content, which was found to be offensive and in bad taste. The gory images used in the ad did not go down well, either with social media users or the international media.

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