Start your Blue Ocean Wave in 2013
I don’t mean to be a doomsayer, but it’s obvious.
If global and domestic economic uncertainties continue, as it seems they will, and business and household consumption remains restrained, then businesses that continue to focus on existing, shrinking, highly competitive “Red Ocean” markets, will find themselves competing against desperate operators. The desperate ones will be cutting prices below the marginal cost of production to maintain cashflow, and we’ll see businesses that managed to scrape through 2011 and 2012 go to the wall either because they cut margins below survival rate or because they were undermined by insolvent competitors.
So what do you do about it?
One of your survival strategies for 2012 and beyond, must be to create new demand and find untapped markets, preferably uncontested markets, where the competition is irrelevant. In other words your own 2012 Blue Ocean.
Many business people find it difficult to know where to start to uncover new markets and how to create demand. They’re understandably so caught up in the daily churn of traditional markets and norms that it’s difficult to see where the clear water is. So where do you start?
People will tell you to focus on your customers to find their unmet needs, this is the “Voice the Customer” style. But don’t get caught. Talking to your customers is important and valuable, but typically only in relation to incremental improvements to your existing lines. If you ask customers what they want, I’ll tell you now they will generally say they want “more of the same, for less”. It is rare for customers to be thinking terribly far ahead about your business and industry in a fresh way, let alone telling you how you could make more money out of them.
The more important and more likely things to do to generate new markets and demand, include:
» Identify your non-customer groups and why they choose alternatives and substitutes
» Don’t forget to look at the group of your “soon to be” non-customers
» Look at both the more and less expensive options that all your non-customers have
» Anthropologically observe customers and non-customers instead of interacting with them
» Look for innovative ideas that have arisen in adjacent industries
» Look at your customers’ customers
» Look at the people who influence your customers
There’s more, but that will give you a great start.
And what exactly are you looking for? The pain points these customers and non-customers encounter at points along their buying experience, including when they drop out of the buying cycle completely.
You need to look at all this for each of your non-customer groups, but then take a step back and look for the commonalities across all these groups. Rather than segment them into ever decreasing niches, aggregate them to find the biggest possible market to tap into.
While you’re at it, look at the business models of substitutes, alternatives and adjacent industries and how they engage with people – customers, suppliers, influencers, shareholders etc. For any strategy to be effective it needs an aligned combination of value, profit and people propositions, so look for innovative ideas in all these three areas as well.
We’re not saying it’s quick or easy, but it will be worth the effort. And yes, of course we can show you how.