In this week’s reading, the authors began looking at how to create a “Blue Ocean” strategy. Chapter four is titled, “Focus on the Big Picture, Not the Numbers.” This is good advice for anyone looking to scale their business. The numbers do not always happen right away. If the process is proven, then it should be followed.
Comparisons among large corporations are primarily used, but the concepts can be applied to a small business. In fact the principles used are simpler in a smaller organization. Although a small organization might not have access to quality market data like a fortune 500 company, decisions can usually be made with less individuals involved. Large businesses tend toward innovation strategy and small businesses lean toward risk taking strategies (Marom, Lussier, and Sonfield). According to the study, it is because smaller businesses will aspire to grow and take more risks. Once the business is large, the managers will rely more on innovation strategy to continue to grow as more risky decisions are not necessary.
The “Blue Ocean Strategy” requires the manager to go through four steps of strategy visualization. “Visual awakening, visual exploration, visual strategy fair, and visual communication” all lead to create a new strategy. It forces the manager to look how they are operating from all angles. It takes an “outside-in” approach by looking at everything from how your competitors operate to analyzing customer desires. Analysis are made by looking at the strategy before the awakening and after.
Companies that operate in the “Blue Ocean” are truly innovative leaders when the embrace the concept of “reaching beyond existing demand.” This requires the manager to look at ways to reach a new audience in a new way. It is a completely new concept to me to think of non customers as potential customers. Finding the right way to reach this customer base is what will create a margin with a high profit margin potential.
A method exists for creating a market that makes “your competition irrelevant.” It is not a simple process, but through determination can be accomplished. Detailed analysis of day to day operations are required to strategize for the future. In addition, a humble attitude is necessary to truly affect change in a company.
References:
Marom, S., Lussier, R., Sonfield, M. (2019), Entrepreneurial Strategy: The relationship between firm size and levels of innovation and risk in small business, Journal of Small Business Strategy
Kim, C., Mauborgne, R. (2015), Blue Ocean Strategy, Harvard Business Press Review, ISBN 978-1-62527-449-6
Master of Entrepreneurship Website for Mike Weimar 