Sunday, June 12, 2016

Something Old / Something New - Blue Ocean Strategy

Of the papers that we read this week, by far the Blue Ocean Strategy document resonated best with me.  The publication is founded on the simple principle of avoiding competitive environments (so-called “Red Oceans”) and instead pursuing less competitive markets (so-called "Blue Oceans").   The approach is somewhat paradoxical in that our management and strategic training has positioned us to think that outperforming our competition is the way to win in business.  The Blue Ocean Strategy, which is named due to its polar opposite difference to Red Oceans, does not argue against the merits of competition; however, it does propose a new approach, which involves identifying a new ocean, which is commonly within an existing red ocean or, at times, can be found outside of the current industry, and establishing guardrails around a newly pioneered offering. 
Several cases from movies, automobiles, and movie theaters are walked through in the paper.  I would like to apply a similar method to an industry that I’m particularly fond of: data.  In the world of data visualization, Tableau, MicroStrategy, and QlikView, are heavy-hitters.  Rather than competing with the larger software suites that incumbents offered (e.g., Microsoft’s Reporting Services and Oracle’s Reports), all three of them sought to fill a specific un-met need: empowering users (data consumers) by simplifying technology.  Additionally, within the world of data tiers, while mainstream database technology manufacturers were focused on creating highly-scalable relational / multidimensional database technologies companies like Cloudera and Hortonworks were able to simplify Hadoop technology and bundle it with other value-add software (e.g., management suites and the like) to create a data platform that is easy[ier] to use as compared to its unpackaged alternatives. 
These approaches are familiar and can be likened to IBM’s and Compaq’s Blue Ocean strategy some time ago.  For instance, both the Data Visualization pioneers and the Data Tier pioneers found new industry areas to claim and then compete.  Moreover, both industry groups were able to setup appropriate barriers to protect their newly-claimed markets.  Lastly, the cost and value proposition: rather than purchasing large, costly, and enterprise suites, users could purchase smaller-scale software products at lower costs.  All of the aforementioned strategies work together in harmony and enable the Blue Ocean Strategy that these companies have successfully pursued.
Oftentimes, we are tempted to look outside of our industry in order to compete.  While, unexpectedly, the opportunities are directly in front of us in our own industries.  It kind of makes me wonder which company will find the next Blue Ocean.

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