Chapter 8 Chapter 6 Follows a Sound Strategic Sequence
You've learned how to discover blue oceans, and you've created a strategic map to clearly describe your future blue ocean strategy.You have also tried to gather the needs of the buyer group as much as possible.The next challenge is how to build a robust business model to ensure sustainable profitability under the guidance of the blue ocean strategy.This involves the fourth principle of blue ocean strategy: follow a reasonable strategic sequence.
This chapter explores how to flesh out and refine a blue ocean idea through the right strategic sequence to ensure its commercial success.Only by understanding what is striving for strategic sequence and how to evaluate the blue ocean concept with the help of key indicators in strategic sequence can the risk of business model be effectively reduced.
As shown in Figure 6-1, companies should structure their blue ocean strategy in the order of buyer utility, price, cost, and applicability.
In the diagram above, the starting point is buyer utility.Does your service offer a particular utility to consumers?Does your product have a strong appeal that drives people to buy it?If these are lacking, there is no opportunity to create a blue ocean, and the plan can only be shelved or rethought until a positive answer is obtained.
After the utility of the product is clarified, the next step is to enter the second step: determining the appropriate strategic price.Remember, a company doesn't want to rely solely on price to create demand.The key question here is: how to attract a large number of target customers through reasonable pricing, so that they are willing to pay for products and services?If the pricing is not attractive, they will not buy, and the products and services cannot create an irresistible market effect.
The first and second steps show one aspect of the business model to obtain benefits.They ensure that you create a large net value for buyers, which is the utility they get minus the price they pay.
Ensuring profits leads to a third factor: cost.Can you provide your service at a target cost and achieve a healthy profit margin?Can you profit from strategic pricing and be easily accessible to a wide range of target buyers?The answer is that you should not use cost to guide pricing, nor should high cost prevent profitability, thereby reducing utility to consumers.When the target cost cannot be achieved, you either give up the unprofitable idea, or innovate the business model to achieve the target cost.Controlling the cost of running a company's business model ensures that it creates a large value space—that is, the price of products and services minus the cost of providing them.This is the result of a combination of utility, strategic pricing, and target costing that enables value innovation for companies and value enhancement for buyers.
The final step is to address the barriers to implementation of the idea.What are the obstacles in the process of implementing the concept?Did you know clearly beforehand?The design process for a blue ocean strategy is only complete if, from the very beginning, you understand the various obstacles that the concept will face in its implementation, you can take steps to ensure its successful implementation.Distributors or partners may resist implementation of the idea, an example of a concrete barrier.Because blue ocean strategy is very different from red ocean strategy, it is critical to understand the barriers to implementation from the outset.
How to assess whether a blue ocean strategy can pass each of the four steps?How to refine your idea so that it meets the requirements of each link?Let's start with utility.
Evaluating the utility buyers get from your services is essential and needs no elaboration.However, because many companies are so superstitious about the novelty of their products and services, especially when adopting a large number of new technologies, these companies actually neglect to provide special utility to buyers.
For example, Philips' CD-i product failed to arouse people's desire to buy and became a failure.This product was once called "imaginative machine" because of its diversified functions. CD-i integrates video, music, games, and teaching tools in one, however, because it has so many different functions, people cannot understand how to use it.Plus, it lacks attractive software tools.Therefore, although CD-i is almost omnipotent in theory, there are not many places where it is useful in practice.Consumers don't necessarily have to use it, so sales are always difficult to expand.
Once again, the managers responsible for the CD-i product fell into the same trap of being too enamored with new technology, assuming that incorporating it into a product would provide the buyer with state-of-the-art utility.Our research found that was not the case.
Technology traps once again hindered Philips from being the best company.No amount of awards will attract mass buyers unless technology makes consumers' lives easier, more convenient, more efficient, least risky, more fun and more stylish.Consider the following examples of companies: Starbucks Coffee, Cirque du Soleil, The Home Depot, Southwest Airlines, and Ralph Lauren Fashion. These examples tell us: value innovation is not equal to technological innovation.
As mentioned in Chapter 2, in order to avoid this trap, it is first necessary to describe the strategy and introduce the product's innovation, differentiation from other products, and particularly attractive parts of the product to buyers in detail.Next, the company evaluates how and in what ways these new products and services have changed the lives of buyers.The significance of the latter aspect is that products and services may have reduced technical functions, but it can greatly increase the actual utility of buyers.
Buyer utility diagrams can help managers analyze problems from the right perspective (Figure 6-2).It clearly shows the special utility that various types of companies provide to buyers, and the different stages that buyers go through in using products and services.This graph allows managers to clearly judge the size of the utility space provided by products and services.Let's analyze the items on this graph in detail.
The buyer's journey is usually divided into six stages, covering the whole process from purchase to disposal.Each stage also includes many specific links.For example, the buying phase might include the experience of browsing e-Bay's website, or wandering the shelves of The Home Depot.As shown in Figure 6-3, at each step, business managers can ask a series of questions to measure the quality of the buyer's experience. .
Figure 6-3 The buyer's experience cycle
The six stages experienced by the buyer correspond to the six utility levers, that is, the special utility provided by the enterprise to the buyer.Most of the leverage is obvious.The operation is simple, interesting, can provide imagination, and is environmentally friendly. These functions can be understood by customers without much explanation.It's not hard to understand the idea that some products can greatly reduce the financial, physical or reputational risks to consumers.If a product or service is readily available, easy to use, and easy to handle, it provides customer convenience.The most commonly used lever is customer productivity, which enables consumers to do things better and faster through products and services.
In order to test whether consumers have obtained special utility, companies usually should first check whether its products and services have eliminated the biggest obstacle to utility in the six stages that consumers go through.Where the greatest barriers to utility are encountered often represent opportunities for companies to provide extraordinary value to consumers.Figure 6-4 shows how firms identify hotspots that provide special utility.In the 36 boxes of the buyer's utility map, by identifying the aspects you should work on, you will make the new products and services you provide not only create different utility from existing products and services, but also contribute to the provision of utility. Removed the biggest hurdle to turn non-customers into our customers.If your service is in the same space as the service provided by other products, then the opportunity you face is not a blue ocean battle.
Figure 6-4. Discovering Buyer Utility Barriers
Take the Model T Ford, for example.Before it appeared, more than 500 automakers in the United States produced luxury cars for the rich.According to the Buyer Utilities Map, all of the auto industry is focused on the use-phase column, with luxury cars made for trendy weekend excursions occupying just one of the 36 utility spaces.
For Volkswagen, the biggest obstacle is not the pursuit of luxury and style of cars, but two other factors.One is the ease of use phase.At the beginning of the last century, most roads were muddy and only suitable for horse-drawn carriages, but it was not easy for fine-made cars to pass.This greatly limited the use of cars (it was not recommended for people to drive in rainy and snowy days at that time), which was very inconvenient.Another barrier to utility is the risk that arises during the maintenance phase.Well-built, multifunctional cars often broke down and required repairs by experts, who were in short supply and expensive at the time.
In a short time, the Ford Model T solved both of these obstacles to increased utility. The Model T is known as the car of the masses.There is only one color and one style of black, no more choices.That way, Ford can spend less on the features the car uses.The Ford Model T was built for everyday use, so it was more reliable, durable, better for driving on muddy roads and in snow, and easier to repair than those luxury cars that could only be used for weekend crossings in the country And use, people only need to spend a day to learn to drive.
Following this design philosophy, the buyer's utility map is quite different from the traditional one.The traditional utility map focuses on upgrading the existing design and providing technological breakthroughs that are not related to the value of the car, while the new design concept focuses on creating new and superior practical utility for buyers.The main purpose of using a positioning map is to test whether the products and services you provide provide superior utility to buyers.Using this diagnostic approach, you can see how your idea can be revised and improved.
For consumers, it is necessary to consider where is the biggest obstacle to utility improvement in his experience cycle?Does your product or service effectively remove these barriers?If not, now presents an opportunity to innovate and improve your product.When a company's products and services pass the inspection of this link, it is ready to enter the next step.
In order for your product to generate a steady revenue stream, you must set the right strategic price.This step ensures buyers not only want to buy your product, but are able to afford it.Many companies do the opposite, targeting trendy, price-insensitive customers first when launching new business ideas.Over time, reduce the price to attract a large number of consumers.However, it has become increasingly important to know from the outset what price will capture the majority of the target customer segment.
There are two reasons for this change.First, companies are starting to see that increasing volume can yield higher returns than ever before.When the characteristics of commodities become increasingly knowledge-intensive, companies spend more on product development than manufacturing.Taking the software industry as an example, it is easier to understand.For example, Microsoft spent billions of dollars developing the Windows XP operating system, and subsequent copies cost only the cost of a CD.This reality makes product sales critical.
Another reason is that the value of a product or service to buyers is closely related to the number of people who use it.An example is the online auction service operated by eBay.When a product or service is used by very few people, others will not buy it. The consequence of this phenomenon, we call it the externality of the network, many products and services are at the two extremes, or sold at once Drop millions of copies, or sell none at all.
At the same time, the rise of knowledge-intensive products has brought about the possibility of free riding.This has to do with the non-rival and non-excludable character of knowledge.A general competitive product cannot be used by two companies at the same time.For example, scrap steel consumed by Nucor cannot be used by other small steel companies at the same time.In contrast, non-competitive products used by one firm do not restrict the use of other firms, and ideas fall into this category.For example, Virgin Atlantic has introduced a new concept of the so-called upper class, which combines the fare of business class with the large seats and comfortable environment of first class.Other airlines could adopt the idea, and that doesn't stop Virgin Atlantic from using it itself.This not only makes competitive imitation possible, but also reduces the cost of imitation, since the costs and risks of developing an idea are borne by the original innovator rather than the follower.
The challenge becomes even more formidable when the concept of exclusivity is considered.Exclusivity is one of the functions determined by the nature of goods and the characteristics of the legal system.Exclusivity occurs when a company has the right to deny other companies access to a product. For example, Intel Corporation uses property rights laws to prevent other microprocessor manufacturers from using its manufacturing equipment.However, Curves, a women's health club, cannot refuse people to walk into its training center, study its layout, internal atmosphere, training procedures, and imitate its new concept of women's health: women spend three days a week, 30 minutes at a time Training, getting along with other women happily, all without the embarrassing scenes that you usually encounter in ordinary gyms. The most valuable part of the Curves Club is not exclusivity, and once an idea is made public, it naturally spills over to other companies.
Lack of exclusivity exacerbates the risk of innovation.Most of the creative and explosive ideas of businesses like Curves, Starbucks, and Southwest Airlines are of great value, but they do not themselves consist of new technological discoveries and therefore cannot be patented or excludable , so it is easy to be imitated.
All of this means that a product must be strategically priced not only to attract a large number of buyers, but also to help retain customers over the long term.Due to the risk of free riding, a product should build a reputation on day one, as in the online society, brand building is increasingly dependent on word of mouth recommendations and dissemination.Firms must initially offer a product that buyers cannot refuse and that makes it difficult for other imitators to imitate.This makes strategic pricing critical.Strategic pricing must address the question, is your product priced in such a way that it attracts a large number of target buyers in the first place, so that they have a strong desire to spend money for it?External imitation is difficult if the product offers specific utility and can be priced strategically.
We developed a tool called the Mass Price Corridor to help managers price attractive products.By the way, a reasonable price is not necessarily a low price.This tool consists of two distinct but interrelated steps (see Figure 6-5).
(The size of the circle is proportional to the number of buyers the product/service attracts)
To determine the price of a product or service, a company first analyzes the prices of those products and services of those companies that are closest to its idea and form.Typically, they analyze other products and services in the industry.Of course, this practice is necessary, but it is not enough to attract new customers.Therefore, the main challenge in determining strategic prices is to understand the price sensitivity of customers, because customers often compare the prices of new products and services with the products and services of different styles offered by traditional competitors.
One way to analyze all products in an industry is to list all products and services and divide them into two categories: those that have different forms but perform the same function, and those that have different forms and services function but with the same goal.
Different form, same function.Many companies attract customers from other industries by creating blue ocean models, creating products that have the same function or provide the same core utility as traditional products, but differ in appearance.The Ford Model T, for example, carefully examined passenger carriages.Horse-drawn carriages have the same core utility as automobiles: Both can be used as personal or family transportation.But there are different forms between them: one relies on living animals; the other relies on machinery.Ford used the blue ocean strategy to strategically price its Model T with reference to the horse-drawn carriage, effectively turning horse-drawn carriage users into its own car users.
Returning to the example of the school lunch industry, asking this question leads to an interesting observation.Inadvertently, parents who help their children prepare lunch have a connection with the school cafeteria.For most children, the parent's role is the same as that of the school cafeteria, which is to arrange lunch for the child.But their forms are very different: one side is the parents, the other is the school cafeteria.
Different form and function, but with the same goal.Many companies approach customers from farther afield.Cirque du Soleil, for example, draws customers from a broader nightlife perspective.Its growth has been helped by the fact that it draws a large number of customers from other evening entertainment that differs in format and content from its own.For example, bars, restaurants, and circuses have few characteristics in common.They also serve a very different function than the traditional visual entertainment provided by the circus by providing activities such as chatting or food.However, although these activities differ in form and function, people engage in them with the same goal: to spend the evening more pleasantly.
Listing alternative products and services enables managers to see various buyer groups, allowing them to penetrate other industries and fields to attract customers.For example, the lunch provided by parents has replaced the school cafeteria, and fashionable family financial management has replaced personal financial software.Having done this, managers should next measure the prices and quantities of these substitutes.As shown in Figure 6-5.
This method provides a more direct way to find out where the target buyer group is and what these buyers are willing to pay for the products and services they currently use.The price range that captures the largest number of target buyers is the product's price corridor.
In some cases, the price range is wide.Southwest Airlines, for example, has a price corridor that covers customers willing to spend an average of $400 for a short-haul economy-class ticket to those willing to spend as little as $60 for car travel.The key point here is not to set prices in order to compete effectively in the industry, but to seek reasonable pricing in order to attract customers from other alternative industries.If the Ford Model T had been priced at three times the price of a horse-drawn carriage in order to compete with the rest of the industry, the market for the Ford Model T would not have exploded.
The second part of this pricing tool helps managers determine how much consumers can afford without prompting competitors to imitate their products and services.This assessment relies on two main factors. The first is the extent to which products and services are protected by patents or copyrights; the second is the extent to which the firm owns certain exclusive resources or core The workshop can effectively prevent imitation.For example, Dyson, an American electronics manufacturer, has set a high price for its bagless vacuum cleaner since it started production in 1995. This high price is attributed to its strong patent protection and inimitable service capabilities.
Many other companies have used high strategic pricing to attract target buyer groups.Examples include DuPont's pricing of its Lycra brand in the chemical sector.Philips' ALTO brand in the field of professional lighting, SAP's product pricing in the field of business application software, and pricing of Bloomberg's products in the field of financial software.
On the other hand, companies that lack clear patents and resource protection choose middle-level pricing strategies in the price corridor.If the company is not adequately protected, they must fix a relatively low price.For example, Southwest Airlines, because its services are not patented and it has no exclusive assets, can only be priced at the lower level of the price corridor-that is, at the price of car travel. .It is wise for a company to implement a mid-level pricing strategy when:
* Their blue ocean products and services have high fixed costs and high marginal variable costs.
* Their attractiveness mainly relies on network externalities.
* Their cost structure benefits from economies of scale.In this case, quantity can bring obvious cost advantages, and the quantity of sales becomes a key factor in pricing.
A product's price corridor chart can guide us in strategic pricing to create new demand, and can also guide us in adjusting initial pricing to make our product sales successful.When your products and services pass the test of strategic pricing, you can move on to the next step.
Target cost planning is the second step in the strategy sequence and it corresponds to the profit side of the business model.To maximize the profit potential of blue ocean ideas, companies should start with strategic pricing and then subtract a reasonable profit margin from the price to arrive at the target cost.Here, deriving cost from price, not price from cost, is critical, because only then can you obtain a cost structure that ensures profitability and makes it difficult for others to imitate.
When target costs are derived from strategic pricing, this often means drastic reductions in spread.In order to meet the challenge of target cost control, the company can establish a strategic planning map, which shows the gaps and the focus of our efforts, which can effectively reduce the cost of the company.Think of Cirque du Soleil, which controls costs by eliminating animal shows and star appearances, and Ford controls costs with one color, one style of the Model T.
Often, these cost-reduction initiatives enable companies to efficiently meet cost targets.Let's look at Ford, which introduced cost innovations to meet the more challenging cost goals of the Model T.Ford had to abandon its standard production system, in which cars were handcrafted from start to finish by skilled workers.In order to replace this system, Ford introduced a production line to replace skilled workers. The workers on the production line can complete a small part of the task faster and more orderly, thus reducing the time to manufacture a Model T car from 21 days to 4 days, a 60% reduction in man-hours.If Ford had not introduced these cost innovations, it would not have been able to achieve profitability at strategic prices.
Companies are not on the path to profitable blue ocean strategy if they are not willing to find a way to creatively meet target costs, as Ford did, and to risk hitting strategic prices or working to improve consumer utility.To meet cost targets, companies have three main avenues:
The first is to streamline operations and introduce cost innovations from manufacturing to distribution.Can the raw materials needed to deliver products and services be replaced by unconventional cheaper materials, such as switching from metal to plastic, or shifting demand centers from the UK to Bangalore?In your value chain, can high-cost low-value-added activities be eliminated quickly?Can the production of your product or service be shifted from an area where land is expensive to an area where the cost is relatively low?As retail giants Home Depot, IKEA, and Walmart have done, or as Southwest Airlines has done, shifting airports from major mega airports to more modest regional airports.Can you save some links, components and expenses in the production process as much as possible by introducing a production line like Ford did?Can you achieve cost savings in every activity?
By addressing questions like these, the Swiss watch company Swatch was able to achieve costs 30% lower than any other watch company in the world.In the beginning, Swatch chairman Nicolas Hayek established a project team to determine strategic prices for the company.At the time, cheap (about $75), high-precision quartz watches from Japan and Hong Kong dominated the market.The Swatch Company sets the price of its products at $40, at which price people can buy multiple Swatch watches as decorations.This low price leaves no margin at all for companies in Japan or Hong Kong who want to copy Swatch watches and cut the price of their products.In order to directly sell Swatch watches at this price without raising the price, the company’s project team starts with the price and conducts reverse research on how to achieve the target cost. This process involves ensuring sufficient profit margins to support marketing expenses and realize profits.
Under the high labor cost in Switzerland, the only way for Swatch to achieve this goal is to make fundamental changes in the product itself and production methods.For example, instead of using more traditional metal or leather, Swatch uses plastic.Swatch engineers boldly simplified the internal design of the watch, reducing 150 parts to 51.Finally, the engineers also developed a new, cheaper integration technique that uses ultrasound for welding instead of glue.Changes in design and manufacturing allowed Swatch to dominate the mass watch market, which had previously been occupied by Asian manufacturers with cheap labor.
In addition to streamlining production and introducing cost innovations, another method companies use to achieve their target costs is partnerships.In order to bring new products and services to the market, many companies mistakenly believe that all production and sales activities should be shouldered.In many cases, this is because they use the product and service as a platform for developing a new productive capability.In some cases, companies simply did not consider external alternatives.However, partnering with other companies provides a way for companies to quickly and efficiently acquire the necessary production capacity while reducing their cost structure.Cooperation enables a company to take advantage of the unique advantages of other companies and obtain the benefits of economies of scale. Cooperation can also quickly and cheaply close the gap in production capacity with other companies, which provides a company with a channel to obtain mature and necessary resources. Skill.
For example, much of IKEA's ability to meet its cost targets is dependent on partnerships.IKEA cooperates with 150 production companies in 50 countries around the world to find the latest price of raw materials and production costs, ensuring that about 20,000 IKEA products can be produced at the lowest cost and in the fastest time.
Let's look at SAP, a world-leading business application software developer in Germany.It has saved hundreds of millions or even billions of dollars in development costs by cooperating with Oracle (Oracle), and obtained a world-class central database, the Oracle database, which is used in SAP's core products R/2 and R /3 plays a central role in the development. SAP has also further cooperated with consulting companies such as Capgemini and Accenture to have a global sales force overnight without adding additional costs.Correspondingly, Oracle has greatly reduced its fixed cost expenses on its balance sheet, and SAP has used Capgemini and Accenture's strong global sales network to reach SAP's target customers, which has not added any cost to the company.
In addition to assembly line production, cost innovation, and cooperative ventures that enable companies to reach their cost targets, there are three other ways that companies can achieve significant profit margins without giving up their strategic pricing, and that is to change the industry. pricing model.By changing the pricing model of the past, companies can often eliminate production and sales problems.
For example, when movie cassettes first started appearing, they sold for around $80.Few people are willing to spend this money to buy it, because no one wants to watch the tape more than 2-3 times.The strategic price of videotape must be set by reference to the price of going to the cinema to see the movie, not the price of owning it outright.Therefore, at a price of US$80 per plate, its demand will definitely not increase.How can a company make a profit selling videotapes for just a few dollars a reel while following strategic pricing?The answer is obviously impossible.However, Blockbuster solved this problem by changing the selling to renting and changing the pricing model of the product.That allowed tapes to be rented for just a few dollars apiece, and the home video market boomed as a result, with Blockbuster reaping huge profits by re-renting rather than selling the tapes.Similarly, IBM also changed the pricing model by changing the sale to lease, thus greatly expanding the market.
In addition to Blockbuster's rental model and IBM's rental model, there are several innovations in pricing models that the company could use to turn a profit.One mode is time sharing.A New Jersey company, Net-Jets, uses this model to make its jets widely available to corporate customers who buy time to use the plane rather than the plane itself.Another pattern is split sharing.Mutual fund managers, for example, are pushing the high-quality portfolio services traditionally provided by private banks to the wealthy to small investors, who buy a fraction of a portfolio, rather than the entire share.
Some companies are abandoning the concept of price, and instead they provide customers with products and at the same time receive a corresponding share of profit revenue from customers' business activities.For example, Hewlett-Packard provides high-quality servers to companies in Silicon Valley, and at the same time receives a share of the other party's operating income.In this process, HP provides products to customers, enabling customers to obtain some key production capacity in a short period of time, and HP's profit far exceeds the profit of simply selling products.The purpose of this pricing is not to compromise on its strategic price, but to achieve the goal through a new price model.We call it pricing innovation.However, it must be remembered that what is a pricing innovation in one industry (such as video rentals) is often a standardized pricing model in another.
Figure 6-6 shows how to maximize profits by adopting the previous three methods of price innovation.As shown in the figure, the company first starts with its strategic pricing, then subtracts the target profit it should get, and finally arrives at its target cost.In order to control the target cost to obtain profits, the company has two main methods that can be adopted: one is assembly line production and cost innovation, and the other is cooperation.If the company is taking all the efforts to reduce the cost of the business model, but the target cost is still not achieved, the company will turn to the third way, through pricing innovation to achieve profitability to meet the strategic price.Of course, even if the target cost can be met, pricing innovation can still be adopted.When the company's products and services can successfully demonstrate the profits generated by the operation of the business model, the company can then take the last step in the blue ocean strategy.
Business models based on special utility, strategic pricing, and target costs lead to price innovation.Unlike traditional technological innovation, value innovation is based on a win-win situation for buyers, companies and all parties in society."Value Innovation in Dynamic Markets" in Appendix C clearly illustrates how this model works in the market and creates economic and social benefits for its shareholders.
Even an impeccable business model cannot fully ensure the commercial success of Blue Ocean Creative.Because a blue ocean means challenging the status quo, it may have aroused fear and resistance among the company's three main stakeholders: company employees, business partners, and the public.Before a company formally invests in a new idea, it must first conduct a sufficient demonstration to dispel these fears and concerns.
Failure to adequately explain to a company employee the impact a new business idea will have on his or her current life can be costly.For example, when Merrill Lynch's management announced it was launching an online brokerage business, its stock price fell 14% amid resistance from its large retail brokerage division and news of internal squabbles.
Companies should strive to communicate adequately with employees before releasing a new business idea, because employees fear that implementing a new idea will pose a threat to themselves.Companies should work with their employees to find ways to defuse threats so that even as people's roles, responsibilities, and rewards change, everyone still wins.与美林银行形成对比，摩根斯坦利添惠（Mrogan Stanley Dean Witter & Co.）就开诚布公地就应对互联网挑战的新战略与员工开展了内部讨论，公司的努力得到了应有的回报。因为市场认识到公司的员工完全理解了电子商务项目对公司的重要性，当公司宣布这一项目时，公司的股票价上升了13%。
由于商业伙伴害怕他们的收入流或者市场地位受到推行新的商业创意的威胁，因此，商业伙伴对创意的抵制可能会造成比员工的不满更大的损失。当SAP在开发它的新产品ASAP时，就面临这个问题。ASAP是一个企业应用软件系统，它比SAP运行得更快而且成本更低。ASAP最开始是为中小企业打造的商务应用软件。其样板的开发需要大型咨询公司的积极合作，而这些大型咨询公司的大部分收入则来源于对SAP产品的长期使用。因此，他们没有很强的动力去找到一条更快更高效的途径来实施该公司的新软件开发计划。
SAP公司通过与其合伙人开诚公布的讨论这些问题来解决它们之间的分歧。SAP的经理人员向咨询公司保证，如果积极合作的话，他们将会获得更多的生意。对中小企业而言，ASAP将会缩短实施时间，咨询公司将会获得更多的新客户，这足以弥补从大公司那里损失掉的收益。而且，新系统还会为咨询顾问们提供一条有效的途径，来应对日益增长的客户的担忧（如花费太多时间而没有投入使用），向客户做出积极的反应。
对新的商业创意的反对还可能传导给公众，尤其是这一全新的创意威胁到业已建立起来的社会或政治规则，这一影响就有可能是破坏性的。我们来看生产转基因食品的Monsanto公司，该公司的业务一直遭到欧洲消费者的质疑，这主要是因为环保团体的努力所致，这些环保团体包括绿色和平组织、地球之友组织以及土壤协会等。由于欧洲有着关心环保的传统，以及强有力的农业游说团体，因此这些环保团体对转基因食品的抨击在欧洲获得了广泛的声援和巨大的共鸣。
Monsanto公司的失误在于它让别人主宰了这场辩论。公司本应当向环保群体和公众作出解释，详细说明转基因食品在消除世界饥荒和疾病方面所发挥的重要作用。而当产品问世之后，Monsanto公司本应该在有机食品和转基因食品之间作出明显的标志以给消费者有一个自主选择。如果Monsanto公司采取了这些步骤，它也许不会遭到如此多的指责，甚至或许会成为未来食品领域的领先者和关键生物技术的提供者。很可惜的是，它没有走这一步。
在向这三个利益相关者群体——雇员、合伙人和公众作出说明解释时，关键在于，要对为什么有必要采用这一新的创意展开公开的讨论。你必须解释它的优点，阐明它的前景，并明确描述公司是如何实施它们的。利益相关者必须知道他们的声音被听到了，从而避免产生抵触情绪。公司应当就存在的问题与利益相关者进行对话，花费时间和精力解决他们关心的问题。（对于公司如何与利益相关者进行详细的讨论，参见第8章）。
公司可在效用、价格、成本以及实施等各个环节上构建他们的蓝海战略，各个环节上的实施标准形成一套整体，以确保创意在商业上获得成功。蓝海创意(BOI)指标为这一系统提供了一个简单但又非常有效的测试（见图6-7）。
如图6-7所示，飞利浦的CD-i产品和摩托罗拉的铱星电话在蓝海战略指数表上的得分，相距利润丰厚的蓝海战略还存在有相当大的距离。对于飞利浦的CD-i产品，它有着复杂的技术功能和有限的软件服务，不能创造特殊的购买者效用。它的定价超出了购买群体的承受能力，它的制造过程复杂而昂贵，设计复杂，需要花费30多分钟才能向消费者解释清楚，售活员也没有很强的动力去销售CD-i产品。飞利浦的CD-i在蓝海创意指标的4个衡量标准上都是失败的，尽管为开发此产品投入了数十亿美元。
如果在开发阶段就基于蓝海创意指标体系对CD-i产品的商业创意进行评估，那么飞利浦公司将会预见到这一创意中所存在的缺陷，并在事前就会简化这一产品，同合伙人一道去开发赢利的软件系统，制定能为大众所接受的战略性价格，同零售商协同工作，找到一条简易可行的销售渠道，向顾客解释并销售这一产品。
类似的，摩托罗拉的铱星电话由于高昂的生产成本而有着不合理的高价格。它没有为购买者群体提供有吸引力的效用。当该创意被采纳而付诸实施时，摩托罗拉在很多国家克服了各种管制的限制获得了市场准入权。雇员、合伙人和社会都有很强的兴趣来接受这一创意。但是，公司的销售团队和营销渠道却很薄弱。由于摩托罗拉不能够有效地供货，铱星电话在市场有需求的时候却常常不能迅速提供产品。低效率、高价格、高成本，再加上薄弱营销能力，这些都表明铱星电话创意必然会遭到失败。
与这些失败形成对照的是，日本NTT DoCoMo公司的i模式产品。在1999年，当大部分电信运营商专注于无线通信设备的技术竞赛和价格竞争时，NTT DoCoMo这家日本最大的电信制造商开发了i模式，让人们在手机上使用互联网服务。在日本，普通移动电话在移动性、声音质量、使用的方便度以及硬件设计方面有着很高的水准，但他们几乎不提供数据库方面的服务，诸如收发电子邮件、信息、新闻、游戏等互联网时代的主要应用服务。而i模式服务则兼具了手机和互联网这两个行业相互之间无法融合这一关键优势，为消费者创造了独一无二的效用。
i模式服务以广大购买者所能接受的价格提供了卓越的购买者效用。i模式的月费、歌曲与数据的传输费以及其它服务项目的价格都在战略性价格区域内。在很短时间内，愿意购买的消费者人数就达到了一个很大的数量。例如，对i模式下某一内容站点的月度订阅费一般都是在100日元到300日元之间，仅相当于日本大多数车站报亭出售的一本周刊的价格。
在确定了对广大购买者有吸引力的价格之后，NTT DoCoMo设法在目标成本范围内，努力获得提供服务并获取利润的能力。为实现这一目标，公司没有将其资产和生产能力局限在某一领域。一方面，它将重点放在发展电信运营商的传统角色，致力于在i模式项目下开发和保持一个高速度、高容量的网络。另一方面，通过与手机制造商和内容供应商的积极合作，为它的产品提供了其他关键的服务。
通过创造一种合作双赢的网络，公司实现了在挑战性的价格条件下满足并持续控制目标成本的目的。尽管在合作关系网络中，存在众多的合伙人和诸方面的关系，但是公司始终把各方面的合作伙伴作为一个利益整体来对待。首先，NTT DoCoMo经常性坚持与其制造业伙伴分享知识和技术的做法，以帮助它们始终处于行业竞争的前沿；其次，公司在无线网络发展方面发挥领军作用，扩大和更新i模式的网站名单，吸引内容供应商加入i模式的行列，创作内容以增加用户流量。例如，通过替内容供应商收取小额手续费，帮助供应商节省了成本，同时对NTT DoCoMo自己则获得了不断增长的收入流。
更重要的是，在WAP标准之下i模式并不使用Wireless Markup语言(WML),而是使用c—HTML语言，这是当前在日本已经被广泛使用的语言。这使得i模式对于用户更有吸引力，因为在c—HTML语言下，软件工程师不必把现存的专为互联网设计的网站地址转变成适合i模式所使用的地址，这样他们根本不需要增加额外成本就能接入系统。NTT DoCoMo还能与国外的主要的合作伙伴诸如Sun Microsystems，微软（Microsoft）以及Symbian进行合作开发，以减少总的开发成本并缩短开发时间。
i模式战略取得成功的另一个关键原因是该项目实施的方式。公司成立了一个专门负责开发这一项目的小组，赋予其高度的自主性和明确的授权。i模式小组的负责人可以挑选大部分的团队成员，并让它们参与公开讨论，商议如何创造移动数据通信的新市场，从而使他们全身心地投入到这一项目中去。所有这些为i模式创造了一个融洽和谐的合作氛围。而且公司所创造的与它的合伙人双赢的模式，以及日本公众对使用数据库服务的接受，都有助于i模式在实施中取得成功。
i模式服务符合前面图6-7中所示的蓝海创意指数的四项衡量标准。确实，i模式被证明取得了巨大的成功。在它被推出6个月后，订购者已达到了一百万，在两年内，订购者达到了2170万，仅来自邮件传送业务的收入就增加了130倍。到2003年末，定购该服务的用户达到了4010万，来自数据传输、图片传输与文本传递的收入就从2.95亿日元（260万美元）上升到8863亿日元（80亿美元）。
DoCoMo公司是唯一能从移动互联网领域获利的公司，它在市场容量以及盈利增长方面的潜力已超过它的母公司NTT。
尽管i模式在日本取得了巨大的成功，但它在日本之外能否取得成功，关键在于它能否消除在法律、文化、情感方面的区域性障碍，以及会否受到合作伙伴和基础设施方面的制约。
在通过了蓝海创意指标的检验后，公司就从蓝海战略规划设计阶段向具体实施阶段迈进。现在的问题是，如果这一战略与过去相比有明显的区别甚至是背道而驰，你将如何带领你的团队去执行这一战略？这一问题把我们带入了本书的第二部分。该部分讲述蓝海战略的第5项规则：克服关键组织障碍，这是本书下一章的主题。
In the diagram above, the starting point is buyer utility.Does your service offer a particular utility to consumers?Does your product have a strong appeal that drives people to buy it?If these are lacking, there is no opportunity to create a blue ocean, and the plan can only be shelved or rethought until a positive answer is obtained.
After the utility of the product is clarified, the next step is to enter the second step: determining the appropriate strategic price.Remember, a company doesn't want to rely solely on price to create demand.The key question here is: how to attract a large number of target customers through reasonable pricing, so that they are willing to pay for products and services?If the pricing is not attractive, they will not buy, and the products and services cannot create an irresistible market effect.
The first and second steps show one aspect of the business model to obtain benefits.They ensure that you create a large net value for buyers, which is the utility they get minus the price they pay.
Ensuring profits leads to a third factor: cost.Can you provide your service at a target cost and achieve a healthy profit margin?Can you profit from strategic pricing and be easily accessible to a wide range of target buyers?The answer is that you should not use cost to guide pricing, nor should high cost prevent profitability, thereby reducing utility to consumers.When the target cost cannot be achieved, you either give up the unprofitable idea, or innovate the business model to achieve the target cost.Controlling the cost of running a company's business model ensures that it creates a large value space—that is, the price of products and services minus the cost of providing them.This is the result of a combination of utility, strategic pricing, and target costing that enables value innovation for companies and value enhancement for buyers.
The final step is to address the barriers to implementation of the idea.What are the obstacles in the process of implementing the concept?Did you know clearly beforehand?The design process for a blue ocean strategy is only complete if, from the very beginning, you understand the various obstacles that the concept will face in its implementation, you can take steps to ensure its successful implementation.Distributors or partners may resist implementation of the idea, an example of a concrete barrier.Because blue ocean strategy is very different from red ocean strategy, it is critical to understand the barriers to implementation from the outset.
How to assess whether a blue ocean strategy can pass each of the four steps?How to refine your idea so that it meets the requirements of each link?Let's start with utility.
Evaluating the utility buyers get from your services is essential and needs no elaboration.However, because many companies are so superstitious about the novelty of their products and services, especially when adopting a large number of new technologies, these companies actually neglect to provide special utility to buyers.
For example, Philips' CD-i product failed to arouse people's desire to buy and became a failure.This product was once called "imaginative machine" because of its diversified functions. CD-i integrates video, music, games, and teaching tools in one, however, because it has so many different functions, people cannot understand how to use it.Plus, it lacks attractive software tools.Therefore, although CD-i is almost omnipotent in theory, there are not many places where it is useful in practice.Consumers don't necessarily have to use it, so sales are always difficult to expand.
Once again, the managers responsible for the CD-i product fell into the same trap of being too enamored with new technology, assuming that incorporating it into a product would provide the buyer with state-of-the-art utility.Our research found that was not the case.
Technology traps once again hindered Philips from being the best company.No amount of awards will attract mass buyers unless technology makes consumers' lives easier, more convenient, more efficient, least risky, more fun and more stylish.Consider the following examples of companies: Starbucks Coffee, Cirque du Soleil, The Home Depot, Southwest Airlines, and Ralph Lauren Fashion. These examples tell us: value innovation is not equal to technological innovation.
As mentioned in Chapter 2, in order to avoid this trap, it is first necessary to describe the strategy and introduce the product's innovation, differentiation from other products, and particularly attractive parts of the product to buyers in detail.Next, the company evaluates how and in what ways these new products and services have changed the lives of buyers.The significance of the latter aspect is that products and services may have reduced technical functions, but it can greatly increase the actual utility of buyers.
Buyer utility diagrams can help managers analyze problems from the right perspective (Figure 6-2).It clearly shows the special utility that various types of companies provide to buyers, and the different stages that buyers go through in using products and services.This graph allows managers to clearly judge the size of the utility space provided by products and services.Let's analyze the items on this graph in detail.
The buyer's journey is usually divided into six stages, covering the whole process from purchase to disposal.Each stage also includes many specific links.For example, the buying phase might include the experience of browsing e-Bay's website, or wandering the shelves of The Home Depot.As shown in Figure 6-3, at each step, business managers can ask a series of questions to measure the quality of the buyer's experience. .
Figure 6-3 The buyer's experience cycle
The six stages experienced by the buyer correspond to the six utility levers, that is, the special utility provided by the enterprise to the buyer.Most of the leverage is obvious.The operation is simple, interesting, can provide imagination, and is environmentally friendly. These functions can be understood by customers without much explanation.It's not hard to understand the idea that some products can greatly reduce the financial, physical or reputational risks to consumers.If a product or service is readily available, easy to use, and easy to handle, it provides customer convenience.The most commonly used lever is customer productivity, which enables consumers to do things better and faster through products and services.
In order to test whether consumers have obtained special utility, companies usually should first check whether its products and services have eliminated the biggest obstacle to utility in the six stages that consumers go through.Where the greatest barriers to utility are encountered often represent opportunities for companies to provide extraordinary value to consumers.Figure 6-4 shows how firms identify hotspots that provide special utility.In the 36 boxes of the buyer's utility map, by identifying the aspects you should work on, you will make the new products and services you provide not only create different utility from existing products and services, but also contribute to the provision of utility. Removed the biggest hurdle to turn non-customers into our customers.If your service is in the same space as the service provided by other products, then the opportunity you face is not a blue ocean battle.
Figure 6-4. Discovering Buyer Utility Barriers
Take the Model T Ford, for example.Before it appeared, more than 500 automakers in the United States produced luxury cars for the rich.According to the Buyer Utilities Map, all of the auto industry is focused on the use-phase column, with luxury cars made for trendy weekend excursions occupying just one of the 36 utility spaces.
For Volkswagen, the biggest obstacle is not the pursuit of luxury and style of cars, but two other factors.One is the ease of use phase.At the beginning of the last century, most roads were muddy and only suitable for horse-drawn carriages, but it was not easy for fine-made cars to pass.This greatly limited the use of cars (it was not recommended for people to drive in rainy and snowy days at that time), which was very inconvenient.Another barrier to utility is the risk that arises during the maintenance phase.Well-built, multifunctional cars often broke down and required repairs by experts, who were in short supply and expensive at the time.
In a short time, the Ford Model T solved both of these obstacles to increased utility. The Model T is known as the car of the masses.There is only one color and one style of black, no more choices.That way, Ford can spend less on the features the car uses.The Ford Model T was built for everyday use, so it was more reliable, durable, better for driving on muddy roads and in snow, and easier to repair than those luxury cars that could only be used for weekend crossings in the country And use, people only need to spend a day to learn to drive.
Following this design philosophy, the buyer's utility map is quite different from the traditional one.The traditional utility map focuses on upgrading the existing design and providing technological breakthroughs that are not related to the value of the car, while the new design concept focuses on creating new and superior practical utility for buyers.The main purpose of using a positioning map is to test whether the products and services you provide provide superior utility to buyers.Using this diagnostic approach, you can see how your idea can be revised and improved.
For consumers, it is necessary to consider where is the biggest obstacle to utility improvement in his experience cycle?Does your product or service effectively remove these barriers?If not, now presents an opportunity to innovate and improve your product.When a company's products and services pass the inspection of this link, it is ready to enter the next step.
In order for your product to generate a steady revenue stream, you must set the right strategic price.This step ensures buyers not only want to buy your product, but are able to afford it.Many companies do the opposite, targeting trendy, price-insensitive customers first when launching new business ideas.Over time, reduce the price to attract a large number of consumers.However, it has become increasingly important to know from the outset what price will capture the majority of the target customer segment.
There are two reasons for this change.First, companies are starting to see that increasing volume can yield higher returns than ever before.When the characteristics of commodities become increasingly knowledge-intensive, companies spend more on product development than manufacturing.Taking the software industry as an example, it is easier to understand.For example, Microsoft spent billions of dollars developing the Windows XP operating system, and subsequent copies cost only the cost of a CD.This reality makes product sales critical.
Another reason is that the value of a product or service to buyers is closely related to the number of people who use it.An example is the online auction service operated by eBay.When a product or service is used by very few people, others will not buy it. The consequence of this phenomenon, we call it the externality of the network, many products and services are at the two extremes, or sold at once Drop millions of copies, or sell none at all.
At the same time, the rise of knowledge-intensive products has brought about the possibility of free riding.This has to do with the non-rival and non-excludable character of knowledge.A general competitive product cannot be used by two companies at the same time.For example, scrap steel consumed by Nucor cannot be used by other small steel companies at the same time.In contrast, non-competitive products used by one firm do not restrict the use of other firms, and ideas fall into this category.For example, Virgin Atlantic has introduced a new concept of the so-called upper class, which combines the fare of business class with the large seats and comfortable environment of first class.Other airlines could adopt the idea, and that doesn't stop Virgin Atlantic from using it itself.This not only makes competitive imitation possible, but also reduces the cost of imitation, since the costs and risks of developing an idea are borne by the original innovator rather than the follower.
The challenge becomes even more formidable when the concept of exclusivity is considered.Exclusivity is one of the functions determined by the nature of goods and the characteristics of the legal system.Exclusivity occurs when a company has the right to deny other companies access to a product. For example, Intel Corporation uses property rights laws to prevent other microprocessor manufacturers from using its manufacturing equipment.However, Curves, a women's health club, cannot refuse people to walk into its training center, study its layout, internal atmosphere, training procedures, and imitate its new concept of women's health: women spend three days a week, 30 minutes at a time Training, getting along with other women happily, all without the embarrassing scenes that you usually encounter in ordinary gyms. The most valuable part of the Curves Club is not exclusivity, and once an idea is made public, it naturally spills over to other companies.
Lack of exclusivity exacerbates the risk of innovation.Most of the creative and explosive ideas of businesses like Curves, Starbucks, and Southwest Airlines are of great value, but they do not themselves consist of new technological discoveries and therefore cannot be patented or excludable , so it is easy to be imitated.
All of this means that a product must be strategically priced not only to attract a large number of buyers, but also to help retain customers over the long term.Due to the risk of free riding, a product should build a reputation on day one, as in the online society, brand building is increasingly dependent on word of mouth recommendations and dissemination.Firms must initially offer a product that buyers cannot refuse and that makes it difficult for other imitators to imitate.This makes strategic pricing critical.Strategic pricing must address the question, is your product priced in such a way that it attracts a large number of target buyers in the first place, so that they have a strong desire to spend money for it?External imitation is difficult if the product offers specific utility and can be priced strategically.
We developed a tool called the Mass Price Corridor to help managers price attractive products.By the way, a reasonable price is not necessarily a low price.This tool consists of two distinct but interrelated steps (see Figure 6-5).
(The size of the circle is proportional to the number of buyers the product/service attracts)
To determine the price of a product or service, a company first analyzes the prices of those products and services of those companies that are closest to its idea and form.Typically, they analyze other products and services in the industry.Of course, this practice is necessary, but it is not enough to attract new customers.Therefore, the main challenge in determining strategic prices is to understand the price sensitivity of customers, because customers often compare the prices of new products and services with the products and services of different styles offered by traditional competitors.
One way to analyze all products in an industry is to list all products and services and divide them into two categories: those that have different forms but perform the same function, and those that have different forms and services function but with the same goal.
Different form, same function.Many companies attract customers from other industries by creating blue ocean models, creating products that have the same function or provide the same core utility as traditional products, but differ in appearance.The Ford Model T, for example, carefully examined passenger carriages.Horse-drawn carriages have the same core utility as automobiles: Both can be used as personal or family transportation.But there are different forms between them: one relies on living animals; the other relies on machinery.Ford used the blue ocean strategy to strategically price its Model T with reference to the horse-drawn carriage, effectively turning horse-drawn carriage users into its own car users.
Returning to the example of the school lunch industry, asking this question leads to an interesting observation.Inadvertently, parents who help their children prepare lunch have a connection with the school cafeteria.For most children, the parent's role is the same as that of the school cafeteria, which is to arrange lunch for the child.But their forms are very different: one side is the parents, the other is the school cafeteria.
Different form and function, but with the same goal.Many companies approach customers from farther afield.Cirque du Soleil, for example, draws customers from a broader nightlife perspective.Its growth has been helped by the fact that it draws a large number of customers from other evening entertainment that differs in format and content from its own.For example, bars, restaurants, and circuses have few characteristics in common.They also serve a very different function than the traditional visual entertainment provided by the circus by providing activities such as chatting or food.However, although these activities differ in form and function, people engage in them with the same goal: to spend the evening more pleasantly.
Listing alternative products and services enables managers to see various buyer groups, allowing them to penetrate other industries and fields to attract customers.For example, the lunch provided by parents has replaced the school cafeteria, and fashionable family financial management has replaced personal financial software.Having done this, managers should next measure the prices and quantities of these substitutes.As shown in Figure 6-5.
This method provides a more direct way to find out where the target buyer group is and what these buyers are willing to pay for the products and services they currently use.The price range that captures the largest number of target buyers is the product's price corridor.
In some cases, the price range is wide.Southwest Airlines, for example, has a price corridor that covers customers willing to spend an average of $400 for a short-haul economy-class ticket to those willing to spend as little as $60 for car travel.The key point here is not to set prices in order to compete effectively in the industry, but to seek reasonable pricing in order to attract customers from other alternative industries.If the Ford Model T had been priced at three times the price of a horse-drawn carriage in order to compete with the rest of the industry, the market for the Ford Model T would not have exploded.
The second part of this pricing tool helps managers determine how much consumers can afford without prompting competitors to imitate their products and services.This assessment relies on two main factors. The first is the extent to which products and services are protected by patents or copyrights; the second is the extent to which the firm owns certain exclusive resources or core The workshop can effectively prevent imitation.For example, Dyson, an American electronics manufacturer, has set a high price for its bagless vacuum cleaner since it started production in 1995. This high price is attributed to its strong patent protection and inimitable service capabilities.
Many other companies have used high strategic pricing to attract target buyer groups.Examples include DuPont's pricing of its Lycra brand in the chemical sector.Philips' ALTO brand in the field of professional lighting, SAP's product pricing in the field of business application software, and pricing of Bloomberg's products in the field of financial software.
On the other hand, companies that lack clear patents and resource protection choose middle-level pricing strategies in the price corridor.If the company is not adequately protected, they must fix a relatively low price.For example, Southwest Airlines, because its services are not patented and it has no exclusive assets, can only be priced at the lower level of the price corridor-that is, at the price of car travel. .It is wise for a company to implement a mid-level pricing strategy when:
* Their blue ocean products and services have high fixed costs and high marginal variable costs.
* Their attractiveness mainly relies on network externalities.
* Their cost structure benefits from economies of scale.In this case, quantity can bring obvious cost advantages, and the quantity of sales becomes a key factor in pricing.
A product's price corridor chart can guide us in strategic pricing to create new demand, and can also guide us in adjusting initial pricing to make our product sales successful.When your products and services pass the test of strategic pricing, you can move on to the next step.
Target cost planning is the second step in the strategy sequence and it corresponds to the profit side of the business model.To maximize the profit potential of blue ocean ideas, companies should start with strategic pricing and then subtract a reasonable profit margin from the price to arrive at the target cost.Here, deriving cost from price, not price from cost, is critical, because only then can you obtain a cost structure that ensures profitability and makes it difficult for others to imitate.
When target costs are derived from strategic pricing, this often means drastic reductions in spread.In order to meet the challenge of target cost control, the company can establish a strategic planning map, which shows the gaps and the focus of our efforts, which can effectively reduce the cost of the company.Think of Cirque du Soleil, which controls costs by eliminating animal shows and star appearances, and Ford controls costs with one color, one style of the Model T.
Often, these cost-reduction initiatives enable companies to efficiently meet cost targets.Let's look at Ford, which introduced cost innovations to meet the more challenging cost goals of the Model T.Ford had to abandon its standard production system, in which cars were handcrafted from start to finish by skilled workers.In order to replace this system, Ford introduced a production line to replace skilled workers. The workers on the production line can complete a small part of the task faster and more orderly, thus reducing the time to manufacture a Model T car from 21 days to 4 days, a 60% reduction in man-hours.If Ford had not introduced these cost innovations, it would not have been able to achieve profitability at strategic prices.
Companies are not on the path to profitable blue ocean strategy if they are not willing to find a way to creatively meet target costs, as Ford did, and to risk hitting strategic prices or working to improve consumer utility.To meet cost targets, companies have three main avenues:
The first is to streamline operations and introduce cost innovations from manufacturing to distribution.Can the raw materials needed to deliver products and services be replaced by unconventional cheaper materials, such as switching from metal to plastic, or shifting demand centers from the UK to Bangalore?In your value chain, can high-cost low-value-added activities be eliminated quickly?Can the production of your product or service be shifted from an area where land is expensive to an area where the cost is relatively low?As retail giants Home Depot, IKEA, and Walmart have done, or as Southwest Airlines has done, shifting airports from major mega airports to more modest regional airports.Can you save some links, components and expenses in the production process as much as possible by introducing a production line like Ford did?Can you achieve cost savings in every activity?
By addressing questions like these, the Swiss watch company Swatch was able to achieve costs 30% lower than any other watch company in the world.In the beginning, Swatch chairman Nicolas Hayek established a project team to determine strategic prices for the company.At the time, cheap (about $75), high-precision quartz watches from Japan and Hong Kong dominated the market.The Swatch Company sets the price of its products at $40, at which price people can buy multiple Swatch watches as decorations.This low price leaves no margin at all for companies in Japan or Hong Kong who want to copy Swatch watches and cut the price of their products.In order to directly sell Swatch watches at this price without raising the price, the company’s project team starts with the price and conducts reverse research on how to achieve the target cost. This process involves ensuring sufficient profit margins to support marketing expenses and realize profits.
Under the high labor cost in Switzerland, the only way for Swatch to achieve this goal is to make fundamental changes in the product itself and production methods.For example, instead of using more traditional metal or leather, Swatch uses plastic.Swatch engineers boldly simplified the internal design of the watch, reducing 150 parts to 51.Finally, the engineers also developed a new, cheaper integration technique that uses ultrasound for welding instead of glue.Changes in design and manufacturing allowed Swatch to dominate the mass watch market, which had previously been occupied by Asian manufacturers with cheap labor.
In addition to streamlining production and introducing cost innovations, another method companies use to achieve their target costs is partnerships.In order to bring new products and services to the market, many companies mistakenly believe that all production and sales activities should be shouldered.In many cases, this is because they use the product and service as a platform for developing a new productive capability.In some cases, companies simply did not consider external alternatives.However, partnering with other companies provides a way for companies to quickly and efficiently acquire the necessary production capacity while reducing their cost structure.Cooperation enables a company to take advantage of the unique advantages of other companies and obtain the benefits of economies of scale. Cooperation can also quickly and cheaply close the gap in production capacity with other companies, which provides a company with a channel to obtain mature and necessary resources. Skill.
For example, much of IKEA's ability to meet its cost targets is dependent on partnerships.IKEA cooperates with 150 production companies in 50 countries around the world to find the latest price of raw materials and production costs, ensuring that about 20,000 IKEA products can be produced at the lowest cost and in the fastest time.
Let's look at SAP, a world-leading business application software developer in Germany.It has saved hundreds of millions or even billions of dollars in development costs by cooperating with Oracle (Oracle), and obtained a world-class central database, the Oracle database, which is used in SAP's core products R/2 and R /3 plays a central role in the development. SAP has also further cooperated with consulting companies such as Capgemini and Accenture to have a global sales force overnight without adding additional costs.Correspondingly, Oracle has greatly reduced its fixed cost expenses on its balance sheet, and SAP has used Capgemini and Accenture's strong global sales network to reach SAP's target customers, which has not added any cost to the company.
In addition to assembly line production, cost innovation, and cooperative ventures that enable companies to reach their cost targets, there are three other ways that companies can achieve significant profit margins without giving up their strategic pricing, and that is to change the industry. pricing model.By changing the pricing model of the past, companies can often eliminate production and sales problems.
For example, when movie cassettes first started appearing, they sold for around $80.Few people are willing to spend this money to buy it, because no one wants to watch the tape more than 2-3 times.The strategic price of videotape must be set by reference to the price of going to the cinema to see the movie, not the price of owning it outright.Therefore, at a price of US$80 per plate, its demand will definitely not increase.How can a company make a profit selling videotapes for just a few dollars a reel while following strategic pricing?The answer is obviously impossible.However, Blockbuster solved this problem by changing the selling to renting and changing the pricing model of the product.That allowed tapes to be rented for just a few dollars apiece, and the home video market boomed as a result, with Blockbuster reaping huge profits by re-renting rather than selling the tapes.Similarly, IBM also changed the pricing model by changing the sale to lease, thus greatly expanding the market.
In addition to Blockbuster's rental model and IBM's rental model, there are several innovations in pricing models that the company could use to turn a profit.One mode is time sharing.A New Jersey company, Net-Jets, uses this model to make its jets widely available to corporate customers who buy time to use the plane rather than the plane itself.Another pattern is split sharing.Mutual fund managers, for example, are pushing the high-quality portfolio services traditionally provided by private banks to the wealthy to small investors, who buy a fraction of a portfolio, rather than the entire share.
Some companies are abandoning the concept of price, and instead they provide customers with products and at the same time receive a corresponding share of profit revenue from customers' business activities.For example, Hewlett-Packard provides high-quality servers to companies in Silicon Valley, and at the same time receives a share of the other party's operating income.In this process, HP provides products to customers, enabling customers to obtain some key production capacity in a short period of time, and HP's profit far exceeds the profit of simply selling products.The purpose of this pricing is not to compromise on its strategic price, but to achieve the goal through a new price model.We call it pricing innovation.However, it must be remembered that what is a pricing innovation in one industry (such as video rentals) is often a standardized pricing model in another.
Figure 6-6 shows how to maximize profits by adopting the previous three methods of price innovation.As shown in the figure, the company first starts with its strategic pricing, then subtracts the target profit it should get, and finally arrives at its target cost.In order to control the target cost to obtain profits, the company has two main methods that can be adopted: one is assembly line production and cost innovation, and the other is cooperation.If the company is taking all the efforts to reduce the cost of the business model, but the target cost is still not achieved, the company will turn to the third way, through pricing innovation to achieve profitability to meet the strategic price.Of course, even if the target cost can be met, pricing innovation can still be adopted.When the company's products and services can successfully demonstrate the profits generated by the operation of the business model, the company can then take the last step in the blue ocean strategy.
Business models based on special utility, strategic pricing, and target costs lead to price innovation.Unlike traditional technological innovation, value innovation is based on a win-win situation for buyers, companies and all parties in society."Value Innovation in Dynamic Markets" in Appendix C clearly illustrates how this model works in the market and creates economic and social benefits for its shareholders.
Even an impeccable business model cannot fully ensure the commercial success of Blue Ocean Creative.Because a blue ocean means challenging the status quo, it may have aroused fear and resistance among the company's three main stakeholders: company employees, business partners, and the public.Before a company formally invests in a new idea, it must first conduct a sufficient demonstration to dispel these fears and concerns.
Failure to adequately explain to a company employee the impact a new business idea will have on his or her current life can be costly.For example, when Merrill Lynch's management announced it was launching an online brokerage business, its stock price fell 14% amid resistance from its large retail brokerage division and news of internal squabbles.
Companies should strive to communicate adequately with employees before releasing a new business idea, because employees fear that implementing a new idea will pose a threat to themselves.Companies should work with their employees to find ways to defuse threats so that even as people's roles, responsibilities, and rewards change, everyone still wins.与美林银行形成对比，摩根斯坦利添惠（Mrogan Stanley Dean Witter & Co.）就开诚布公地就应对互联网挑战的新战略与员工开展了内部讨论，公司的努力得到了应有的回报。因为市场认识到公司的员工完全理解了电子商务项目对公司的重要性，当公司宣布这一项目时，公司的股票价上升了13%。
由于商业伙伴害怕他们的收入流或者市场地位受到推行新的商业创意的威胁，因此，商业伙伴对创意的抵制可能会造成比员工的不满更大的损失。当SAP在开发它的新产品ASAP时，就面临这个问题。ASAP是一个企业应用软件系统，它比SAP运行得更快而且成本更低。ASAP最开始是为中小企业打造的商务应用软件。其样板的开发需要大型咨询公司的积极合作，而这些大型咨询公司的大部分收入则来源于对SAP产品的长期使用。因此，他们没有很强的动力去找到一条更快更高效的途径来实施该公司的新软件开发计划。
SAP公司通过与其合伙人开诚公布的讨论这些问题来解决它们之间的分歧。SAP的经理人员向咨询公司保证，如果积极合作的话，他们将会获得更多的生意。对中小企业而言，ASAP将会缩短实施时间，咨询公司将会获得更多的新客户，这足以弥补从大公司那里损失掉的收益。而且，新系统还会为咨询顾问们提供一条有效的途径，来应对日益增长的客户的担忧（如花费太多时间而没有投入使用），向客户做出积极的反应。
对新的商业创意的反对还可能传导给公众，尤其是这一全新的创意威胁到业已建立起来的社会或政治规则，这一影响就有可能是破坏性的。我们来看生产转基因食品的Monsanto公司，该公司的业务一直遭到欧洲消费者的质疑，这主要是因为环保团体的努力所致，这些环保团体包括绿色和平组织、地球之友组织以及土壤协会等。由于欧洲有着关心环保的传统，以及强有力的农业游说团体，因此这些环保团体对转基因食品的抨击在欧洲获得了广泛的声援和巨大的共鸣。
Monsanto公司的失误在于它让别人主宰了这场辩论。公司本应当向环保群体和公众作出解释，详细说明转基因食品在消除世界饥荒和疾病方面所发挥的重要作用。而当产品问世之后，Monsanto公司本应该在有机食品和转基因食品之间作出明显的标志以给消费者有一个自主选择。如果Monsanto公司采取了这些步骤，它也许不会遭到如此多的指责，甚至或许会成为未来食品领域的领先者和关键生物技术的提供者。很可惜的是，它没有走这一步。
在向这三个利益相关者群体——雇员、合伙人和公众作出说明解释时，关键在于，要对为什么有必要采用这一新的创意展开公开的讨论。你必须解释它的优点，阐明它的前景，并明确描述公司是如何实施它们的。利益相关者必须知道他们的声音被听到了，从而避免产生抵触情绪。公司应当就存在的问题与利益相关者进行对话，花费时间和精力解决他们关心的问题。（对于公司如何与利益相关者进行详细的讨论，参见第8章）。
公司可在效用、价格、成本以及实施等各个环节上构建他们的蓝海战略，各个环节上的实施标准形成一套整体，以确保创意在商业上获得成功。蓝海创意(BOI)指标为这一系统提供了一个简单但又非常有效的测试（见图6-7）。
如图6-7所示，飞利浦的CD-i产品和摩托罗拉的铱星电话在蓝海战略指数表上的得分，相距利润丰厚的蓝海战略还存在有相当大的距离。对于飞利浦的CD-i产品，它有着复杂的技术功能和有限的软件服务，不能创造特殊的购买者效用。它的定价超出了购买群体的承受能力，它的制造过程复杂而昂贵，设计复杂，需要花费30多分钟才能向消费者解释清楚，售活员也没有很强的动力去销售CD-i产品。飞利浦的CD-i在蓝海创意指标的4个衡量标准上都是失败的，尽管为开发此产品投入了数十亿美元。
如果在开发阶段就基于蓝海创意指标体系对CD-i产品的商业创意进行评估，那么飞利浦公司将会预见到这一创意中所存在的缺陷，并在事前就会简化这一产品，同合伙人一道去开发赢利的软件系统，制定能为大众所接受的战略性价格，同零售商协同工作，找到一条简易可行的销售渠道，向顾客解释并销售这一产品。
类似的，摩托罗拉的铱星电话由于高昂的生产成本而有着不合理的高价格。它没有为购买者群体提供有吸引力的效用。当该创意被采纳而付诸实施时，摩托罗拉在很多国家克服了各种管制的限制获得了市场准入权。雇员、合伙人和社会都有很强的兴趣来接受这一创意。但是，公司的销售团队和营销渠道却很薄弱。由于摩托罗拉不能够有效地供货，铱星电话在市场有需求的时候却常常不能迅速提供产品。低效率、高价格、高成本，再加上薄弱营销能力，这些都表明铱星电话创意必然会遭到失败。
与这些失败形成对照的是，日本NTT DoCoMo公司的i模式产品。在1999年，当大部分电信运营商专注于无线通信设备的技术竞赛和价格竞争时，NTT DoCoMo这家日本最大的电信制造商开发了i模式，让人们在手机上使用互联网服务。在日本，普通移动电话在移动性、声音质量、使用的方便度以及硬件设计方面有着很高的水准，但他们几乎不提供数据库方面的服务，诸如收发电子邮件、信息、新闻、游戏等互联网时代的主要应用服务。而i模式服务则兼具了手机和互联网这两个行业相互之间无法融合这一关键优势，为消费者创造了独一无二的效用。
i模式服务以广大购买者所能接受的价格提供了卓越的购买者效用。i模式的月费、歌曲与数据的传输费以及其它服务项目的价格都在战略性价格区域内。在很短时间内，愿意购买的消费者人数就达到了一个很大的数量。例如，对i模式下某一内容站点的月度订阅费一般都是在100日元到300日元之间，仅相当于日本大多数车站报亭出售的一本周刊的价格。
在确定了对广大购买者有吸引力的价格之后，NTT DoCoMo设法在目标成本范围内，努力获得提供服务并获取利润的能力。为实现这一目标，公司没有将其资产和生产能力局限在某一领域。一方面，它将重点放在发展电信运营商的传统角色，致力于在i模式项目下开发和保持一个高速度、高容量的网络。另一方面，通过与手机制造商和内容供应商的积极合作，为它的产品提供了其他关键的服务。
通过创造一种合作双赢的网络，公司实现了在挑战性的价格条件下满足并持续控制目标成本的目的。尽管在合作关系网络中，存在众多的合伙人和诸方面的关系，但是公司始终把各方面的合作伙伴作为一个利益整体来对待。首先，NTT DoCoMo经常性坚持与其制造业伙伴分享知识和技术的做法，以帮助它们始终处于行业竞争的前沿；其次，公司在无线网络发展方面发挥领军作用，扩大和更新i模式的网站名单，吸引内容供应商加入i模式的行列，创作内容以增加用户流量。例如，通过替内容供应商收取小额手续费，帮助供应商节省了成本，同时对NTT DoCoMo自己则获得了不断增长的收入流。
更重要的是，在WAP标准之下i模式并不使用Wireless Markup语言(WML),而是使用c—HTML语言，这是当前在日本已经被广泛使用的语言。这使得i模式对于用户更有吸引力，因为在c—HTML语言下，软件工程师不必把现存的专为互联网设计的网站地址转变成适合i模式所使用的地址，这样他们根本不需要增加额外成本就能接入系统。NTT DoCoMo还能与国外的主要的合作伙伴诸如Sun Microsystems，微软（Microsoft）以及Symbian进行合作开发，以减少总的开发成本并缩短开发时间。
i模式战略取得成功的另一个关键原因是该项目实施的方式。公司成立了一个专门负责开发这一项目的小组，赋予其高度的自主性和明确的授权。i模式小组的负责人可以挑选大部分的团队成员，并让它们参与公开讨论，商议如何创造移动数据通信的新市场，从而使他们全身心地投入到这一项目中去。所有这些为i模式创造了一个融洽和谐的合作氛围。而且公司所创造的与它的合伙人双赢的模式，以及日本公众对使用数据库服务的接受，都有助于i模式在实施中取得成功。
i模式服务符合前面图6-7中所示的蓝海创意指数的四项衡量标准。确实，i模式被证明取得了巨大的成功。在它被推出6个月后，订购者已达到了一百万，在两年内，订购者达到了2170万，仅来自邮件传送业务的收入就增加了130倍。到2003年末，定购该服务的用户达到了4010万，来自数据传输、图片传输与文本传递的收入就从2.95亿日元（260万美元）上升到8863亿日元（80亿美元）。
DoCoMo公司是唯一能从移动互联网领域获利的公司，它在市场容量以及盈利增长方面的潜力已超过它的母公司NTT。
尽管i模式在日本取得了巨大的成功，但它在日本之外能否取得成功，关键在于它能否消除在法律、文化、情感方面的区域性障碍，以及会否受到合作伙伴和基础设施方面的制约。
在通过了蓝海创意指标的检验后，公司就从蓝海战略规划设计阶段向具体实施阶段迈进。现在的问题是，如果这一战略与过去相比有明显的区别甚至是背道而驰，你将如何带领你的团队去执行这一战略？这一问题把我们带入了本书的第二部分。该部分讲述蓝海战略的第5项规则：克服关键组织障碍，这是本书下一章的主题。