Blue Ocean Strategy in the Philippines

JP and I joined Entrepreneur’s Marketing Rescue held July 21, 2007 at the DLSU Graduate School of Business at RCBC Plaza. Josiah Go (Mansmith & Fielders, Inc.) oriented around 100 aspiring entrepreneurs and marketers about Blue Ocean Strategy…. for free! (Well, if you factor in the P199 Entrepreneurs mini-magazine of profiles of entrepreneurs. I should have brought JP’s June issue which would have given me free entrance)

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I saw old friends LA and Nikko. I also met some interesting people: Jes, Guy, Orly, Tony, and many others.

From 3-6pm, Josiah shared about how traditional business strategies have to resort to price and promo wars because they’re competing for their share in the same market. This is playing in the red ocean - a zero-sum game and you’re not as profitable as if you were in the blue ocean!

What is blue ocean strategy? …a corporate strategy and bestselling business book written by Professors W. Chan Kim and Renée Mauborgne, of INSEAD.

Nine Key Points of Blue Ocean Strategy (BOS)

• BOS is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000).
• BOS is the simultaneous pursuit of differentiation and low cost.
• The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.
• BOS offers a set of methodologies and tools to create new market space.
• While innovation has been seen as a random/experimental process where entrepreneurs and spin-offs are the primary drivers – as argued by Schumpeter and his followers – BOS offers systematic and reproducible methodologies and processes in pursuit of innovation by both new and existing firms.
• BOS frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index.
• These frameworks and tools are designed to be visual in order to not only effectively build the collective wisdom of the company but also to effectively execute through easy communication.
• BOS covers both strategy formulation and strategy execution.
• The three key conceptual building blocks of BOS are: value innovation, tipping point leadership, and fair process.

One very popular and successful implementation is the P1 or Everyday Lowest Fares of Cebu Pacific. By taking their eyes off the traditional air passengers and finding out how to target non-users, such as those who use ferries (like WG&A Superferry and Aboitiz) and those who just don’t fly to travel because it’s too expensive.

In a nutshell, they did away with non-value adding services of traditional airlines and improved on what ships offered. They did away with newspapers, meals, and lounges, enabling them to streamline their processes, buy new and safer planes, and offer more frequent flights!

As I understand it, blue ocean strategy requires you first to think out of the box. Then to implement, you have to conduct a rigorous value-added analysis of your industry, your competitors, and your alternative industry (e.g. ships vs. planes).

There are many great business ideas. Timing and strategy matter as much as your intent. Good intent also plays a role — if you want to help people with your product or service, your good intent will be rewarded somehow.

I will be applying this learning for our next JV presentation — details to be released once we’ve sealed the deal!

In the Philippines, you can learn more about blue ocean strategy through special trainings by Mr. Josiah Go’s group Mansmith and Fielders.

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  Hi! I'm Marie Casas and this is my blog on personal finance and entrepreneurship.

  I grew up as a smart kid - you know, the kind who gets a really high-paying job fresh off college. I tried that but now I'm happy managing my web startup Pigmata Media and providing financial advice.

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