Blue Ocean Strategy Path 2: Look Across Strategic Groups Within Industries

Blue Ocean Strategy Path 2: Look Across Strategic Groups Within Industries

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 second path - looking across strategic groups within industries. During the upcoming weeks we will highlight the remaining four paths, with each becoming accessible in the Blue Ocean Strategy Basics archives. Today we turn to page 56 of the book Blue Ocean Strategy (co-authored by Professor W. Chan Kim and Professor Renée Mauborgne):

Blue Ocean Strategy Path 2: Look Across Strategic Groups Within Industries

The key to creating a blue ocean across existing strategic groups is to break out of this narrow tunnel vision by understanding which factors determine customers’ decisions to trade up or down from one group to another.

Consider Curves, the Texas-based women’s fitness company. Since franchising began in 1995, Curves has grown like wildfire, acquiring more than two million members in more than six thousand locations, with total revenues exceeding the US$ 1 billion mark. A new Curves opens, on average, every four hours somewhere in the world.

What’s more, this growth was triggered almost entirely through word of mouth and buddy referrals. Yet, at its inception, Curves was seen as entering an oversaturated market, gearing its offering to customers who would not want it, and making its offering significantly blander than the competition’s. In reality, however, Curves exploded demand in the U.S. fitness industry, unlocking a huge untapped market, a veritable blue ocean of women struggling and failing to keep in shape through sound fitness. Curves built on the decisive advantages of two strategic groups in the U.S. fitness industry— traditional health clubs and home exercise programs—and eliminated or reduced everything else.

Source: http://blueoceanstrategy.typepad.com/creatingblueoceans/2008/02/blue-ocean-stra.html