Wednesday, November 28, 2012

Renaissance Learning transitioning from Red to Blue

Reflection of my 2012 summer internship as it pertains to red/blue strategy:

As a second year MPM student, I interned for Renaissance Learning, Inc. (see: last summer as a State Policy Analyst intern. Broadly speaking, this company develops educational software for K-12 school districts throughout the country. In my opinion, I believe this company began over 20 years ago with a blue ocean strategy. Throughout its company history, it has transitioned to more of a red ocean strategy over the years, but is again currently redefining itself.

Renaissance Learning was created in 1985 by a teacher (Judi Paul) and her engineer husband (Terry Paul) out of their Port Edwards, Wisconsin home. According to the summer company training I received, Judi was looking for a way to incentive her own four children to "like" and ensure they comprehended their reading. She ultimately designed what would become "Accelerated Reader" (AR) comprehension quizzes. With a blue ocean strategy, AR would serve as the foundation to this company's start, "creating a new product in an uncontested market space" as Kim and Mauborgne's Blue Ocean Strategy described. Millions of students have taken AR quizzes over the years.

Over the years, between 1985 to the more recent launch and momentous growth in popularity of the Apple iPad and iPhone products, Renaissance Learning began to compete with a more red ocean strategy as competitors entered the market. Competitors include Plato Learning, Pearson, and Scholastic Reading, to name a few. Today, Renaissance Learning has educational software products (Accelerated Reader, Accelerated Math, STAR products, English in a Flash!, etc.) in roughly 1 out of every 3 U.S. schools, which I personally found to be impressive. To maintain this market share, Renaissance has implemented a red ocean strategy over the years with the market gaining more competition. Renaissance is now:

  • competing in the more developed, existing market space
  • aiming to beat out the competition (I witnessed this first hand with my position as a Policy Analyst with RFP proposals and state bids)
  • exploiting the existing demand (in an attempt to gain market share)
  • As a company, it held ongoing training for its sales and various groups to "align the whole system of a company's activities with its strategic choice of differentiation" from its competitors, as Kim and Mauborgne suggest)
Renaissance has had its own hardware computer, the NEO. This is still a useful and successful product. Yet, with the recent boom in popularity of Apple products, Renaissance made the wise decision to develop software apps for its existing products (Accelerated Reader, Accelerated Math, etc.) so that schools, students, and other customers with Apple products can utilize Renaissance products on their existing hardware. In this case, Renaissance avoided one of the seven ways to fail big, according to Carroll and Mui's article. That is, Renaissance avoided "stubbornly staying the course" as Kodak did (page 4). Renaissance recognized that Apple had a strangle on the market share and Renaissance successfully adapted its strategy as a company.

Renaissance is currently shifting again to a more blue ocean strategy as it attempts to further differentiate its products.

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