For those unfamiliar with the concept, blue ocean strategy contrasts with red ocean strategy, where firms in the industry compete head-on among traditional lines.
They typically compete along price lines or the same traditional factors/attributes that the industry always competes along, competing for the same market user base that may be static or even declining. This results in declining profits among firms in the industry as costs rise fighting for the same consumer dollars.
A blue ocean strategy, aims to make the competition irrelevant. A pithy line in the book says "The only way to beat the competition is to stop trying to beat the competition".
That sounds paradoxical, but only if you define "beat" in a limited way, competing along the usual industry defined lines. The insight (in some ways obvious) is that firms should instead try to create brand new markets.
One example that is often used is that of Cirque du Soleil. Apparently the circus industry as a whole was shrinking, as kids began to prefer Console games, internet etc to visiting the circus. There was a limited number of famous circus performers (who weren't that famous anyway), so circuses competed to employ them raising the costs. Animal rights activists also made acts with animals increasingly difficult and expensive.
What Cirque du Solei did was that instead of competing along the usual circus industry factors of
ii) Star performaners
iii) Animal shows
Cirque du Solei changed the rules of the game. They started to blend drama and theater with their acts, blending circus with classic theater. By offering more intellectual experiences, they opened the market drawing in theater going audiences.
Adding of storylines, themes, and increasing the allure of the circus top tent, they created a brand new industry spanning/breaking market across theater and circus with multiple productions like that of broadway shows.
It was not just adding or raising new factors, they also reduced and eliminated attributes that had high cost.
For example, they eliminated animal shows, the need to hire top traditional circus acts, bypassing the whole problem of increasing costs there.
This is what the book calls "value innovation" - innovation that creates more value for consumers but at lower cost, breaking the age-old value vs cost tradeoff.
As the book was written in 2004, some of the examples look dated to my eyes, a more modern example would be Apple of course.
I am still absorbing the framework and analytic tools in the book to employ blue ocean strategies but I think the idea of blue ocean strategies is very important for libraries.
There are differences, libraries don't really compete with each other in the industry but our competitors are Google etc and we don't really have profits but still let's see what we can learn when we apply such tools.
I think like most industries we have always focused on red ocean strategies , basically how to make existing processes better. We are good at tracking how input and output statistics, at doing process improvement processes etc. Increasingly, we do bench-marking studies which focuses more on what other libraries are doing and making sure we do the same.
Red Ocean strategies are important no doubt and they will be always be the bulk of our strategies. But they won't suffice alone.
This is particularly so since our industry is similar to that of the circus industry, where the industry market demand is falling as users start to prefer other alternatives rather than those of ours.
In such a situation, doing the same thing better with incremental improvements isn't going to help. If anything we are in this situation because our competitors such as Google are employing blue ocean strategies on us!
So we need blue ocean strategies to create new ideas and strategies to open new markets, rather than hope to thrive by refining existing processes. We need to know what new things to do, not just how to do existing things better.
The most innovative thinkers in our industry have come up with a slew of ideas from
- Library as a publisher
- embedded librarianship
- Maker spaces
- Supporting data research management etc
- Increased focus on information literacy etc