A group of middle managers sat in a comfort- able conference room overlooking Lake Superior. All five were impressed by the technology in the room, the furniture, and the refreshments. At 8:30 A.M. the meeting began, and team leader Laura spoke first.
“We all know why we are here. Baxter, our CEO, has fallen in love with Blue Ocean Strategy after reading the book and attending a conference. He thinks our conglomerate is too conventional. We go after markets in which we can compete successfully and earn a decent profit in practically all of our divisions.”
Team member Ken asked, “So what’s wrong with being successful? What’s wrong with turning in good profits quarter after quarter and seeing our stock price rise year by year?”
Her pupils widening Laura said, “What’s wrong is that we are competing in the Red
Oceans where the sharks are attacking each other and the other fish. Baxter wants us to compete in market space that does not already exist. We should be creating a new demand and then filling that demand. Baxter wants us to come up with some Blue Ocean ideas that he will then consider.”
“I get it,” said Carmen. “We should stay in the profitable markets our various divisions
already serve. At the same time, we should get into new markets that nobody is serving. How about making battery-operated microwave ovens that will work on the moon? In a few
years, we might have loads of private citizens taking trips into outer space.”
“Great sense of humour, Carmen,” responded Donte, “but the demand might be too small.”
Laura then clicked open a PowerPoint slide listing the 58 products and services the company already provides. She told the group, “Baxter says we should forget about these markets already being served. We have to invade new markets, maybe even create a market.
“Whoever thought 40 years ago that people would walk around listening to a device that
could store 1,000 tunes? Whoever thought people would pay for a package delivery service that competed with a government-backed postal service? Whoever thought people would want to read books, magazines, and newspapers on a device that looks and feels like the old
Bruce commented, “You are saying that as the Blue Ocean Strategy team, we have to identify a multimillion-dollar market space that no other company is serving right now. The world already has millions of products and services being offered. How will our humble team identify a market of value that does not already exist?”Laura said, “I don’t know how we will findour Blue Ocean Strategy, but I do know thatBaxter wants our report in 30 days. We will meet for four consecutive full-day sessions on Thursdays to get the job done. We probably will be communicating with each other between the meetings also.“Let’s get to work right now.”
- What approaches would you recommend the Blue Ocean Strategy team use to identify new market space for the conglomerate?
- How realistic is it for Baxter to delegate the task of finding a Blue Ocean Strategy to a group of middle managers? Explain your reasoning.
- What do you think would be the effectiveness of using the Internet to develop a Blue Ocean Strategy for the team? For example, why not go to Ask.com and enter the question, “What would be a new market space with no competition?”