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Creating new demand in a demanding world.

Both in their book and on their website, Blue Ocean Strategy authors W. Chan Kim and Renee Mauborgne argue that theirs is a strategy that helps business owners make their competition "irrelevant" by identifying a previously non-existing demand and creating an increase in value for both the company and its customers.

Based on more than 15 years' research and including references to 150 companies they've identified as having implemented a blue ocean strategy, Kim and Mauborgne argue that future successful companies need to create increased value for both the company and the customer. Their argument is based, according to their press summary, on six principles: reconstruct market boundaries, focus on the big picture, reach beyond existing demand, get the strategic sequence right, overcome organizational hurdles, and build execution into strategy.

Using their analysis of [yellow tail] wine as an example, Kim and Mauborgne say a blue ocean strategy can be created in four steps:

• eliminate factors an industry takes for granted but adds no perceived value to customers: [yellow tail] maker Casella Wines focused on qualities other than aging and tannin.
• reduce factors well below the industry's standard to avoid the mistake of over delivering in order to beat the competition: Cassella limited their offerings to just one red and one white wine.
• raise factors well above the industry's standard so your customer won't have to make compromises: Casella engaged its retailers by offering employees Australian outback clothing that help customers connect on more familiar territory, giving [yellow] the appearance of being less intimidating than other wines.
• create new sources of value that the industry has never offered: Casella appealed to values such as easy drinking, ease of selection and a sense of fun and adventure, values not previously identified in the wine industry.

Cal Harrison, president of Beyond Referrals in Winnipeg, Man., says that while he's never read Blue Ocean Strategy, he shares a similar philosophy he calls "pink hair" positioning.

"If you want to be different, go dye your hair pink. That will make you different," he says. "But does pink hair make you relevant?"

In today's market, you have to be more than different.

"You need to clearly define and communicate why you're doing what you're doing," says Harrison. "Clearly figure out a valuable market position."

For more information about Blue Ocean Strategy, visit their website at blueoceanstrategy.com. You can also find help applying the Blue Ocean Strategy in your organization by visiting Gabor Burt's website at blueoceanstrategy.typepad.com.

To find out more about Cal Harrison, visit his website at beyondreferrals.com.