This is our second article on the implementation of a Blue Ocean Strategy in finance. The first was published on May 22. Innovation in the finance and banking sectors are of great interest. Value innovation is even more interesting and also merits scrutiny.
A recent post by Investment Executive, a Canadian publication, highlighted a new investment dealer claiming to use a Blue Ocean Strategy to differentiate itself in a crowded industry. Without commenting on the validity of their strategy or business plan, let's analyse
some of the statements made in the article.
"What makes us different? We offer the following ingredients: high quality, low cost, customization, and an overall metaphor of homemade, rather than store-bought or mass-produced."
While these elements are components of a Blue Ocean Strategy (BOS), merely listing them doesn't constitute a tailored Blue Ocean Strategy designed for business growth or client needs. Additionally, third-party observers are less interested in knowing that you are developing or executing a Blue Ocean Strategy. They care more about the value innovation you aim to provide.
In other words, simply claiming to be different or disruptive does not make you so. You must act differently and execute your strategy effectively to embody those qualities. Claiming to offer value through quality is one thing, but "quality" is subjective. What are the quantifiable and qualitative aspects that objectively establish you as a provider of quality (value) to your Blue Ocean clients?
The following statement is premature or used merely as a marketing line:
"Because of this, in many cases, our competition doesn’t want to, or simply can’t, compete against us on this philosophy, making it an uncontested market space – a concept found at the root of the Blue Ocean Strategy."
A well-executed Blue Ocean Strategy is highly successful in creating growth and shareholder value. However, claiming to execute a Blue Ocean Strategy is not self-fulfilling. One of the significant academic criticisms of Blue Ocean Strategy in the last decade has been the lack of a clear link between BOS formulation principles and execution (see reference). This is not a reason to use it as a tagline. Many self-proclaimed experts on platforms like TikTok and YouTube claim to master the strategy without a thorough understanding of its tools and risks. In this case, we hope the business has a sound strategy and would advise them to better elaborate on their value rather than merely claiming to offer it as a communication method.
This should not deter you from consulting a Certified Management Consultant experienced with Blue Ocean Strategy, who can effectively assist you in developing a strategy suited to your company and needs.
Comentarios