Marketing > B2B Marketing Process and Marketing Method Guide. Detailed Marketing Process Instructions. > B2B Marketing Process and Marketing Method Guide: Unlocking Potential with the Blue Ocean StrategyB2B Marketing Process and Marketing Method Guide: Unlocking Potential with the Blue Ocean Strategy
Detailed Marketing Process Instructions: Mastering the Art of Blue Ocean Strategy in B2B Marketing
Explore the realms of Blue Ocean Strategy in B2B marketing. Understand the process, work out the methodology, and learn how to apply this pioneering concept to create uncontested market spaces and render competition irrelevant.
Introduction: The Promise of Blue Ocean Strategy
Blue Ocean Strategy (BOS), a groundbreaking concept coined by W. Chan Kim and Renée Mauborgne, presents a novel way to outperform the competition by creating new, untapped market spaces, or "Blue Oceans". It is an innovative tool for B2B marketers, offering a path towards growth and profitability by breaking away from the intense competition in existing markets, or "Red Oceans".
Why Blue Ocean Strategy Matters
With a crowded B2B marketplace and an ever-growing level of competition, BOS enables businesses to differentiate themselves and their offerings, to create a unique value proposition that appeals to new and existing customers. Think about Apple's introduction of the iPhone - a perfect example of creating a Blue Ocean and reshaping the industry's competitive landscape.
The Components of Blue Ocean Strategy
The journey towards a Blue Ocean encompasses several steps including strategy canvas analysis, the four actions framework, the eliminate-reduce-raise-create grid, and finally, the execution of the strategy.
Assessing Your Understanding
Before diving into the details of each step, it's crucial to reflect on your current understanding of BOS. Do you have preconceived notions about this strategy? How do you envision its implementation in a B2B context?
Connecting New Concepts with the Familiar
Blue Ocean Strategy can be seen as a shift from a product-centric approach (focusing on better features, competitive pricing) to a customer-centric one, where novel value is created from a customer's perspective.
Breaking Down the Blue Ocean Strategy
1. Strategy Canvas Analysis: This involves understanding the current state of play in your industry. Identify key competitors, understand their value proposition, and how your offerings compare. The goal is to find areas where you can differentiate your offerings.
2. Four Actions Framework: This framework helps identify new value propositions. It includes four key actions: eliminate, reduce, raise, and create. This step involves redefining elements that the industry has long competed on.
3. Eliminate-Reduce-Raise-Create Grid: This grid is used to help businesses brainstorm and decide which factors to eliminate, reduce, raise, or create to differentiate themselves from their competitors.
4. Executing the Strategy: After identifying and planning your Blue Ocean Strategy, the final step involves executing it. This includes communicating the new value proposition to the market and operationalizing the plan.
Understanding Common Misconceptions
A common misunderstanding is that Blue Ocean Strategy is about taking high risks to achieve high rewards. However, it's more about taking smart risks and focusing on untapped market spaces where competition is irrelevant.
Summary
By adopting a Blue Ocean Strategy, B2B marketers can break away from the competitive 'red ocean', create uncontested market spaces, redefine market boundaries, and make the competition irrelevant.
Self-Assessment
Reflecting on the objectives we outlined at the start of this guide, consider whether you now feel equipped to understand and apply the Blue Ocean Strategy.
Application in Your Context
Consider how BOS can fit into your own business context. What aspects of your offering can be eliminated, reduced, raised, or created to redefine your value proposition?
Resources for Further Learning
To delve deeper into this topic, consider reading "Blue
Ocean Strategy" by W. Chan Kim and Renée Mauborgne, or explore articles from the Harvard Business Review on the same subject. You can also consider advanced courses in strategic marketing for more intensive learning.
The Blue Ocean Strategy at Work
Step-by-Step Process to Apply Blue Ocean Strategy
1. Assemble a Cross-Functional Team: Gather a diverse team including members from marketing, sales, product development, and customer service. This provides a range of perspectives and expertise necessary for a successful BOS execution.
2. Analyze Your Industry: Using tools such as SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and Porter’s Five Forces Model, evaluate your industry landscape. Identify key competitors and their value propositions.
3. Construct a Strategy Canvas: Create a visual representation of your current strategy and that of your competitors based on factors affecting competition. Identify where your company stands in the competitive landscape.
4. Conduct Four Actions Framework Analysis: Identify factors you can eliminate, reduce, raise, or create in your market offering to redefine the market boundaries and create a new value curve.
5. Apply the Eliminate-Reduce-Raise-Create (ERRC) Grid: Implement the findings from the Four Actions Framework to challenge your industry’s strategic logic and business model.
6. Formulate Your Blue Ocean Strategy: Based on insights from the Strategy Canvas and ERRC grid, formulate your Blue Ocean Strategy that creates new value for customers and makes the competition irrelevant.
7. Validate Your Strategy: Test your Blue Ocean Strategy with a small segment of customers to validate its potential and adjust if necessary.
8. Implement Your Strategy: Once validated, roll out your strategy. This should be done in tandem with operational changes and strong communication to ensure its success.
9. Monitor Progress and Adjust as Needed: Keep a keen eye on KPIs and market response. Be prepared to adjust and refine your strategy as needed.
10. Celebrate Success and Prepare for Your Next Blue Ocean: After successful execution, celebrate and acknowledge the team's hard work. Then, start preparing for your next Blue Ocean.
Risks and Mitigation
Implementing a Blue Ocean Strategy isn't without risks. However, these can be mitigated with careful planning and monitoring:
1. Risk of Incomplete Market Analysis: Mitigate by ensuring thorough market research and competitive analysis.
2. Risk of Poor Implementation: Mitigate with a detailed implementation plan and clear communication.
3. Risk of Negative Customer Reaction: Validate your strategy with a small customer segment before full implementation.
4. Risk of Copycats: While you can't entirely prevent this, continuous innovation can help you stay ahead.
Examples of Success and Failure
1. Success - Salesforce: Salesforce created a Blue Ocean by shifting from traditional software models to a cloud-based service, revolutionizing the CRM industry.
2. Failure - Quibi: Despite a novel concept of short-form streaming, Quibi failed to understand customer needs and the competitive landscape, leading to its downfall.
Business Impact and KPIs
Successful application of the Blue Ocean Strategy can result in increased market share, higher customer retention, and improved profitability. Key KPIs to monitor could include customer acquisition cost (CAC), customer lifetime value (CLTV), and Net Promoter Score (NPS).
Conclusion
Ignoring the Blue Ocean Strategy can leave your company stuck in a 'Red Ocean' of intense competition, shrinking profits, and stagnation. On the other hand, successful application of BOS can pave the way for growth, profitability, and long-term sustainability.
How to Successfully Apply
1. Conduct a thorough market analysis.
2. Assemble a diverse, cross-functional team.
3. Contin
uously innovate to stay ahead of copycats.
4. Test your strategy with a small customer segment before full implementation.
5. Monitor your KPIs closely and be ready to adjust your strategy as necessary.
The Blue Ocean Strategy isn't just a marketing theory; it's a practical, actionable strategy that has the potential to transform your business. However, its application requires a thorough understanding, clear planning, and diligent implementation. So, get started today, and set your company on the path to uncontested market space and growth.
Marketing > B2B Marketing Process and Marketing Method Guide. Detailed Marketing Process Instructions. > B2B Marketing Process and Marketing Method Guide: Unlocking Potential with the Blue Ocean Strategy