Blue Ocean Strategy Path 3: Look Across the Chain of Buyers

Blue Ocean Strategy Articles : Blue Ocean Strategy Path 3: Look Across the Chain of Buyers

Continuing in our series which takes a closer look at each of the paths in Blue Ocean Strategy’s Six Paths Framework, our focus shifts to the third path—looking across the chain of buyers. During the upcoming weeks we will continue to highlight the remaining three paths, with each becoming accessible in the Blue Ocean Strategy Basics archives. Today, for the third path, we turn to page 61 - 62 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne):

Blue Ocean Strategy Path 3: Look Across the Chain of Buyers

Individual companies in an industry often target different customer segments—for example, large versus small customers. But an industry typically converges on a single buyer group. The pharmaceutical industry, for example, focuses overridingly on influencers: doctors. The office equipment industry focuses heavily on purchasers: corporate purchasing departments. And the clothing industry sells predominantly to users. Sometimes there is a strong economic rationale for this focus. But often it is the result of industry practices that have never been questioned. Challenging an industry’s conventional wisdom about which buyer group to target can lead to the discovery of new blue ocean. By looking across buyer groups, companies can gain new insights into how to redesign their value curves to focus on a previously overlooked set of buyers.

Think of Novo Nordisk, the Danish insulin producer that created a blue ocean in the insulin industry…. [Novo Nordisk] saw that it could break away from the competition and create a blue ocean by shifting the industry’s longstanding focus on doctors to the users—patients themselves. In focusing on patients, Novo Nordisk found that insulin, which was supplied to diabetes patients in vials, presented significant challenges in administering. Vials left the patient with the complex and unpleasant task of handling syringes, needles, and insulin, and of administering doses according to his or her needs. Needles and syringes also evoked unpleasant feelings of social stigmatism for patients. And patients did not want to fiddle with syringes and needles outside their homes, a frequent occurrence because many patients must inject insulin several times a day. This led Novo Nordisk to the blue ocean opportunity of NovoPen, launched in 1985. NovoPen, the first user-friendly insulin delivery solution, was designed to remove the hassle and embarrassment of administering insulin.

Source: http://blueoceanstrategy.typepad.com/