Blue Ocean Strategy Term - Pioneer-Migrator-Settler (PMS) Map

Pioneer-Migrator-Settler (PMS) Map - Blue Ocean Strategy Glossary

Pioneer-Migrator-Settler (PMS) Map is both a diagnostic and planning tool that helps managers assess and plan their future growth at the portfolio level. The PMS Map is a 3-by-2 matrix where each row represents a business category - pioneers, migrators and settlers. With respect to the two columns, the first represents the business situation today, while the second column represents the business situation in the future. Managers can use the PMS Map to plot either businesses in their portfolio, or the products/services they offer.

Pioneers are businesses or products/services that offer unprecedented value to buyers. Their value curve radically diverges from the competition, and they have a mass following of customers. These businesses are Blue Ocean Strategies; they are the most powerful sources of profitable growth.

Migrators are businesses or products/services that offer improved value over competition, but not innovative value: they give customers more for less, but do not radically change the key factors of competition of their industry.

Settlers are businesses or products/services that offer more or less the same value to buyers as the rest of the industry. These are me-too businesses. Although they are often today's cash cows, settlers will not generally contribute much to a company's future growth because they are stuck within the red ocean of competition.

To assess a company's profitable growth prospects, a company should plot each business or product/service as a circle on the map according to the criteria above.

The size of each dot should reflect the amount of revenue earned from each business or product/service. Hence a business with relatively large revenues would be plotted as a large circle on the map; a business with smaller relative revenues should be plotted as a small circle.

Source: Business Strategy Terms, Blue Ocean Strategy Glossary at Blueoceanstrategy.com

Blue Ocean Strategy Term - Noncustomers

Noncustomers - Blue Ocean Strategy Glossary

Noncustomers are customer groups who are either not served by the current industry's offering, or in the case of first-tier noncustomers, are existing customers who are about to turn away from the current industry's offering. Noncustomers can be grouped into three categories:
1. First-tier noncustomers are soon-to-be noncustomers: they use the current industry offering minimally, while searching for better options. They are waiting to jump ship and will leave this market as soon as the opportunity presents itself.

2. Second-tier noncustomers refuse the industry's offerings. These are buyers who have seen what the current industry has to offer as an option to fulfill their needs but have chosen against them.

3. Third-tier noncustomers have never thought of the current industry's offerings as an option. As such, they do not feel concerned by its offering. They are the farthest from the current market.

Often, companies focus on their existing customers and ignore noncustomers. They believe that their needs are too different from what they can offer or that they belong to other industries. To unlock untapped demand, managers must look outside of their typical customer base. By expanding their worldview beyond their current customers, they can reach beyond existing demand and unlock a new mass of customers that did not exist before.

Source: Business Strategy Terms, Blue Ocean Strategy Glossary at Blueoceanstrategy.com

Blue Ocean Strategy Term - Motivational Hurdles

Motivational Hurdles - Blue Ocean Strategy Glossary

Motivational Hurdles are the blocks to motivating employees in executing a new strategy like Blue Ocean Strategy. Once a company is awakened to the need for change, managers must ensure that their employees act in a direct, meaningful and sustained manner. Too often breakthrough strategies fail because front-line employees fail to execute them properly. This is often the result of business leaders issuing grand strategic visions through massive top-down mobilization initiatives that are often a cumbersome, expensive, and time-consuming process. Particularly given the wide variety of motivational needs in most large companies, these overarching strategic visions often inspire lip service instead of the intended action.

Instead of diffusing change efforts widely, tipping point leaders follow a reverse course and seek mass concentration over mass mobilization to overcome the motivational hurdle. They focus on three factors of disproportionate influence in motivating employees: kingpins, fishbowl management, and atomization. See Kingpins, Fishbowl Management, Atomization and Tipping Point Leadership.

Source: Business Strategy Terms, Blue Ocean Strategy Glossary at Blueoceanstrategy.com

Blue Ocean Strategy Term - Kingpins

Kingpins - Blue Ocean Strategy Glossary

Kingpins are key influencers in an organization. These are the individuals who are well respected and persuasive, and have an ability to unlock or block access to key resources. To execute Blue Ocean Strategy fast and at lower cost, leaders should concentrate on influencing the kingpins who have significant influence over the mass of employees instead of attempting to tackle everyone in the organization. See Motivational Hurdle.

Source: Business Strategy Terms, Blue Ocean Strategy Glossary at Blueoceanstrategy.com

Blue Ocean Strategy Term - Hot Spots

Hot Spots - Blue Ocean Strategy Glossary

Hot Spots are activities that have low resource input but high performance impact. Taking resources away from cold spots (activities that have high resource input but low performance impact) and assigning them to hot spots is a way to execute Blue Ocean Strategy with limited resources. See Cold Spots and Resource Hurdle.

Source: Business Strategy Glossary, Blue Ocean Strategy Terms at Blueoceanstrategy.com