The Blue Ocean strategy fallacy and other pitfalls
When entrepreneurs develop their product strategies, they often make two mistakes — they either think about today or about tomorrow.
Both are dangerous strategies.
The best way to win is to think about the day after tomorrow but act today.
Blue Ocean strategy fallacy (Why you don’t need competition analysis)
In 2007, I was the CEO of a wholesale company that sold components for food production. I had been blown away by the book Blue Ocean Strategy, published not long before. So, I took my team on a strategic retreat to build our market’s Strategic Canvas and find our ‘blue ocean.’
You might have seen examples of Strategic Canvas in articles or blog posts.
The idea behind the concept is quite simple. You can assess the values your competitors create for customers and avoid direct competition with them by doing the following:
- Offer your customers the values your rivals don’t provide
- Save precious resources by not offering customers the values they already receive from your adversaries.
That’s as simple as it gets. And it may work. Or it may not — as it happened to my company.
After studying our canvas, we decided to focus on the fast delivery service. To do that, we had to invest in building a chain of warehouses across the country.
It was a large, long-term project for us. We began it just to find out along the way that our competitors had launched similar projects about a year earlier.
At the retreat, when we were so proud that we came up with a disruptive idea, ‘fast delivery service’ was absent on the industry value curve on our canvas. But by the time we finished building our network, our rivals had been offering the fast delivery service for over half a year.