`Blue ocean' strategy helps HCL Tech bag DSG deal

`Blue ocean' strategy helps HCL Tech bag DSG deal

HCL Technologies, which bagged the Rs 1,500-crore contract from DSG International, had worked out a three-pronged strategy in July 2005 to procure big-ticket deals in the international market.

"We conceptualised what we call the `Blue ocean' strategy and created uncontested market spaces. HCL recognised the application outsourcing business was being increasingly commoditised and that it was coming under pricing pressure," Mr Vineet Nayar, President, said.
(`Blue Ocean Strategy: How to create uncontested market space and make competition irrelevant' is the title of a best selling book written by two INSEAD (France) professors, W. Chan Kim and Renee Mauborgne)

HCL then decided to chase large deals that would bring a significant transformation, to move up the value chain, and go for multi-service deals with application and infrastructure components.

"Based on this strategy, we went about transforming HCL internally, and that has resulted in deals like Autodesk and EXA," he said. For the DSG International deal, 10 participants, including frontline Indian IT vendors, put in the Request for Proposals (RFPs). Three vendors — HCL Tech and two global companies — were short-listed and at the end of nine months the contract came to HCL Tech.

According to Mr Kevin O'Byrne, Group Finance Director of DSG international, "We have selected HCL Tech on the basis of its breadth of experience, partnership approach and the transparency in its cost models."

"In the last six months alone, this is the fourth large co-sourcing deal being announced by HCL — with this being the largest so far this year. We are happy to have DSG international as one of our top four customer relationships," Mr Shiv Nadar, Chairman and CEO, HCL Technologies, said.

The contract for HCL Tech comes on the heels of some big deals bagged by Indian IT companies in recent years.

Dutch financial powerhouse ABN Amro had given out a 1.8 billion euros ($2.2-billion) contract spread over five years to IBM, as well as two Indian companies — TCS and Infosys.

"This deal is larger. In addition, the ABN-Amro deal was a select outsourcing contract that came to Indian offshore companies while the DSG deal involves total outsourcing. Another key differentiator is the fact that the ABN Amro and other such deals are based on Full Time Equivalent (FTEs) or people-based pricing, while this is a total package deal."

Nintendo’s Kaplan Discusses 'Blue Ocean' Strategy

Blue Ocean Strategy News - Nintendo’s Kaplan Discusses 'Blue Ocean' Strategy

In a Forbes.com interview conducted with Nintendo of America’s long serving vice president of marketing and corporate affairs Perrin Kaplan, the executive has discussed some of the company’s new marketing strategies, as recently exemplified by Nintendo's Brain Age DS titles, which have been a massive success in Japan and are now launching in the West.

According to Kaplan, the company’s new strategy is named 'Blue Ocean', signifying the attempt to create a market where there initially was none, and a major subject of Satoru Iwata's speech at the 2005 Tokyo Game Show. This is as opposed to 'Red Ocean', which apparently signifies the currently established and highly competitive console market.

The interview also touched on a number of other points: when questioned on the Revolution’s virtual console, which allows users to download and play games from any of the company’s previous home consoles, Kaplan indicated that it did not represent Nintendo’s entire online strategy and that “more will be described soon”. She also commented of the Revolution: “We will use the Wi-Fi component in a different way for each game, just like with the DS.”

Finally, regarding the company’s decision not to support high-definition resolutions with the Revolution, something which is a cornerstone of the marketing campaign for Microsoft's Xbox 360, Kaplan suggests that: "Many independent sources tell us that experiencing current high-def games on a regular TV makes it near impossible to see everything clearly. That means the majority of homes are experiencing something lesser than what they bargained for."

LG calls out to shutterbugs

LG calls out to shutterbugs - Blue Ocean Strategy

Challenging an industry’s conventional wisdom about which buyer group to target can lead to the discovery of new blue oceans. 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 (Blue Ocean Strategy, p. 61).

If you’ve seen pictures taken by a cameraphone, chances are, you haven’t been too impressed with the quality. Likely neither have trendsetters whose images and videos make up some of the most sought after content on the Internet. Well, it seems Blue Ocean Strategy-minded LG is set on changing this as it calls out to a this largely uncontested marketspace. A recent BusinessWeek article explains:

The new LG handset, called the "Viewty," aims to give maximum satisfaction to shutterbugs keen to share photos and videos with others. LG has formed an alliance with Google's YouTube, for instance, and with just one click, a Viewty user can upload a video recorded on the handset directly to YouTube. A Viewty user can also watch YouTube videos on the handset.

LG has already had remarkable success with its Chocolate, Shine and designer series phones. In fact, its handset division reported a profit of US$ 332 million in the second quarter of this year (against a loss of US $16 million a year earlier). LG is a high-profile Blue Ocean Strategy practitioner, with it’s ‘BLUE OCEAN 2 BY 10’ initiative aiming to be the world's number 2 mobile communications player by 2010.

Get savvy in newer media, says Kotler in New Straits Times, Malaysia, article

Get savvy in newer media, says Kotler in New Straits Times, Malaysia, article

July 10, 2007 - ASIAN marketers, including those in Malaysia, need to acquire skills in using newer media such as blogs, podcasts, and buzz marketing, says international marketing guru Dr Philip Kotler.

"Asian companies need a better understanding of the role that the marketing department can play in turning customer insights into profitable growth.

"They need to improve their strategic capabilities with Blue Ocean thinking and Lateral Marketing," he said in an email interview with Business Times recently.

Companies that employ Blue Ocean strategy use innovation to find uncontested "blue oceans of opportunities" that their competitors have yet to discover, while lateral marketing requires companies to look beyond narrow, vertical segmentation and be creative to create fresh ideas and new markets.

Kotler, one of the pioneers in the marketing world, said Asian companies must study the practices of foreign global companies that have entered their market.

He said if Asian companies discover that they are deficient in certain marketing skills such as digital marketing, experiential marketing and direct marketing, they need to quickly acquire the missing skills to level the competitive playing field.

On the difference in marketing culture between Asia and the West, Kotler said Asian marketers tend to find out more about the buyers before sitting down for business talk.

"My impression is that Asian marketers, especially those selling more expensive, less frequently purchased products, want to know more about the buyer and his trustworthiness and character. They prefer not to go immediately into business talk but first find out more about the whole person," he said.

Kotler, who currently teaches at Northwestern University, observes that the current marketing trend and challenge lies in the proliferation of products, promotions, and marketing channels.

He said each product category contains a growing number of brands and consumers are confronted with advertisements everywhere they turn.

"They can buy at retail or order online, and in both cases, face a multitude of vendors. Thus the main problem for a company is how to stand out from the crowd, how to grab a few minutes of someone's attention," he said.

Kotler said marketing covers all the tools that can be used to build a strong preference for a particular company or product. Marketers use segmentation, targeting, positioning, and the 4Ps - product, price, place, promotion - to achieve profitable growth.

To build a new brand, he said, a company relies on marketing research and creative promotional tools to develop a memorable name, logo, slogan, look, and value proposition.

"Once the brand is well-established, the company must make sure that its brand strategy guides all of the company's activities," he said.

Kotler, 76, whose marketing textbook is used in graduate business schools worldwide, will be in Kuala Lumpur on August 13 for a one-day talk hosted by the Institute of Marketing Malaysia.

Is 3i Infotech a blue ocean company?

Is 3i Infotech a blue ocean company?

With a portfolio approach to acquiring smaller technology firms, 3i Infotech’s strategy of filling in the niches around large solutions requires a light touch

Being in an industry with no competitors is every business’ dream, but doing so in the crowded IT space requires years of strategy and design. For Indian firm 3i Infotech, its well-financed acquisition strategy has taken it into profitable niches in banking, where it focuses heavily on Asia.

“We believe that we have to catch the wave,” says Debneel Mukherjee, president of 3i Infotech Asia Pacific. “And to catch the wave, timing is important. So if you don’t have a solution, to catch that wave at that point in time, go and get the solution.”

Instead of focusing on core banking, where entrenched players look at handfuls of deals over several years, the company is building competencies in areas that grow into specialisations for banks. “With the passage of time, banking is becoming more specialised. What are the pains and agonies of the banks?” Mukherjee asks. “That is what we have to understand.”

eBay unleashes 45,000 pro-bono developers

Blue Ocean Strategy - eBay unleashes 45,000 pro-bono developers

Reinventing the rules can be tough: For most organizations the challenge lies in defying the conventional wisdom of commonly-accepted, more familiar business models.

Take for example eBay and its independent developers, which is a feature article in this month’s Fast Company:

“In the olden days--before 2005--eBay (NASDAQ:EBAY) was ambivalent about independent developers who ginned up applications to help buyers and sellers navigate its online auctions. In fact, it actually charged those developers fees, up to hundreds of thousands of dollars a year, based on the number of people who used the programs,” explains Max Mancini who heads up eBay’s Disruptive Innovation Team.

However, in a recent move which defies conventional wisdom, Mancini’s team eliminated those fees to the developer. And shortly after doing so, the number of developers increased 100-fold.

"What that means is 45,000 software developers are thinking of ways to make it easier to use eBay … When they grow their business, they also grow ours" Mancini acknowledges.

Similarly non-conventional yet highly effective approaches which defy conventional wisdom are discussed in Blue Ocean Strategy. In fact, Blue Ocean Strategy outlines a framework for the creative process needed to identify and unlock new opportunities in highly competitive spaces. Perhaps most importantly, Blue Ocean Strategy tools force an organization to continuously question its positioning and strategies—as eBay has done—with an emphasis on creating uncontested Blue Ocean opportunities, as opposed to simply maintaining the oftentimes ill-fated status quo.

Blue Ocean Strategy - The Perfect Calm Series: IBM Jams: Big Blue Goes to the BOP

Blue Ocean Strategy - The Perfect Calm Series: IBM Jams: Big Blue Goes to the BOP

One of the most exciting spheres of application for Blue Ocean Strategy is the realm of Social Capitalism. This explosive market space is at very intersection of successful business and lasting social impact. Traditionally these two spheres were considered separate, but the two can be pursued simultaneously via Blue Ocean Strategy. Periodically, we offer a feature from WorldChanging a repository site for stimulating ventures, ideas and concept targeting this very intersection.

This week, we select the story: IBM Jams: Big Blue Goes to the BOP.

Do you know of other companies, organizations or business visionaries sailing along the intersection of good business and social good? Share your ideas with the Creating Blue Oceans Community.

Blue Ocean Strategy - And the Stevie goes to…

Blue Ocean Strategy - And the Stevie goes to…

During April and May of this year, Gabor was one of the judges for the prestigious Stevie Awards. The awards, designed by the same company that makes the Oscar and Emmy, and named after the Greek word for ‘crowned,’ recognizes the efforts, accomplishments, and positive contributions of companies and business people worldwide.

Gabor was asked to evaluate relevant candidates by the American Business Awards institute, creator of the Stevie Awards, based on his expertise in the field of business strategy and Innovation. The ABA accept Stevie nominations in more than 40 categories, such as: Company, Office and Product Awards; Organization Awards; Team Awards; Individual Awards; and Corporate Media Awards.

The ABA will host a gala and nationally broadcast ceremony in New York City on June 11, 2007, during which time each winner will be presented with a distinguished Stevie Award trophy.

You may wish to check out the Stevie Awards Podcast series, featuring brief and informative interviews with recent Stevie Award winners. And if you are already looking ahead to 2008, nominations will be accepted starting in July 2007.

Leading software manufacturer, SAS, dips into Blue Ocean Strategy

Leading software manufacturer, SAS, dips into Blue Ocean Strategy

Recognizing the importance of shifting to Blue Oceans, leading software manufacturer, SAS, invited Gabor to give the closing keynote presentation at last week’s SAS Forum 2007, in Stockholm, Sweden.

The annual SAS Forum brings together C-level executives and some of the world's most respected thought leaders whose perspectives continue to shape current and future business, economic and political landscapes. Approximately 1,000 senior executives and industry experts from Europe, the Middle East and Asia Pacific explored the theme "Innovation and Performance," and discussed how to apply innovation and intelligence to drive performance improvements in business and government.

Gabor spoke in conjunction with notable personalities Steve Forbes, the Editor-in-Chief and CEO of Forbes Magazine, management guru Gary Hamel, as well as Dr. Jim Goodnight, CEO, SAS.

Blue Ocean Strategy - The Path of Least Resistance: Steelcase

The Path of Least Resistance: Steelcase - Blue Ocean Strategy

“To break out of red oceans, companies must overstep accepted boundaries of how they compete. Instead of looking within these boundaries, businesses need to systematically scan across what Blue Ocean Strategy calls the Six Paths: Alternative industries, strategic groups, buyer groups, complementary offerings, functional-emotional orientation of an industry, and important trends. This gives companies fresh insight into how to reconstruct markets to open up blue oceans opportunities.” (Blue Ocean Strategy, p. 48)

A key quality companies should strive for is adaptability, always scanning and acting upon broad market opportunities. All companies face difficult or life-threatening challenges at one point or another, and it is their adaptability to make smart strategic moves which allow them to prosper even in the face of adversity.

We recently came across an example of this in a BusinessWeek article about Steelcase, the office furniture giant. Like other players in the office furniture industry, Steelcase was stuck in a Red Ocean of drastically reduced revenues and profitability in the recent past. In 2006, looking for a way to rebound, executives at Steelcase spearheaded a Blue Ocean Strategy-like approach of scanning across alternative industries. They began to focus on the health-care industry, which seemed like a logical new direction given its high-growth potential: The aging baby-boomer population is expected to drive annual spending on hospital construction beyond $30 billion by 2009, up from $19.8 billion in 2005.

The article reveals: “Initially, Steelcase executives assumed that hospital administrators and doctors' office managers were using their Criterion chairs in office environments. But when their salespeople talked in-depth with these customers [a core recommendation of Blue Ocean Strategy], they learned that physicians and hospitals were increasingly providing the comfortable chairs to patients and their family members in waiting rooms and physician-consultation areas, where they endure physical and mental stress.”

Having already entered the medical furnishings market without even knowing it, once Steelcase started researching opportunities for hospital and clinical furnishings, they discovered a fragmented market. Thus the birth of Nurture, a subsidiary company which could set itself apart and enjoy a market space to itself by offering compatible suites of examination tables, patient beds, physician desks, nurses' stations, and bariatric (for obese patients) waiting-room seats.

When companies chose to compete in their narrowly-defined industry, it draws them into the trap of wanting to continuously outperform competitors. Instead, Steelcase chose the path of least resistance: discover Blue Oceans, Blue Ocean Strategy, by actively overstepping industry boundaries.

Blue Ocean Strategy - Entrepreneurs Organization: The Pioneers of Innovation

Entrepreneurs Organization: The Pioneers of Innovation - Blue Ocean Strategy

Founded almost 20 years ago by young, energetic entrepreneurs, Blue Ocean Strategy company, EO is now 6,000+ members strong with over 120 Chapters in 40 Countries around the globe. Members come from all walks of life and run companies of every type and size imaginable. The common goal amongst members is to grow their businesses, learn from others and above all, share their experiences with each other.

The sales of all Blue Ocean Strategy company, EO members worldwide total more than US$81 billion. Last month, Japan was the venue of EO’s tri-annual gathering dubbed Blue Ocean Strategy company EO University. Over the course of four days, the Tokyo event provided a line-up of highly-stimulating speakers, a charged forum of discussion and idea-exchange, as well as programs of cultural immersion.

Gabor was invited to give the featured keynote presentation on Blue Ocean Strategy to the audience of 300+ leading entrepreneurs from around the world. The message of BOS is particularly relevant to Blue Ocean Strategy company EO members, as they are in the perfect position to challenge traditional industry assumptions and boundaries, as well as to create new market spaces.

Blue Ocean Strategy - I want you to want me—virtually speaking

I want you to want me—virtually speaking… Blue Ocean Strategy

Challenging an industry’s conventional wisdom about which buyer group to target can lead to the discovery of new blue oceans. 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.” (Blue Ocean Strategy, p. 61)

One of the most visible success stories of Blue Ocean Strategy and Value Innovation is Samsung, Blue Ocean Strategy company. Since 1998, Samsung products have continuously redefined markets in consumer electronics, thanks to BOS. A telling example is mobile phones, where Samsung, Blue Ocean Strategy company, entered an already saturated market in 1998, yet in five years become one of its leading players.

And is there a limit to Samsung’s Blue Ocean journey? Apparently not. Once again Samsung is creating buzz by challenging conventional industry wisdom about which buyer group to target and where. As Softpedia reports:

After thinking about female interest in mobile communication that resulted in shiny and thin devices, Samsung, Blue Ocean Strategy company, is preparing a major surprise for another major segment, the teenagers that entertain themselves on the Second life site. The space is going to be used for the launching of the new Samsung mobile phones or better say the residents will actually have a virtual mobile communication store to visit while playing.

Second Life, a virtual reality environment, plays host to over five million users worldwide—many of them gadget- and technology hungry teenagers. This strategic move will allow Samsung to showcase its range of mobile handsets to one of the most sought after and profitable buyer groups, in a competition-less way.

Are you a Second Life member? Have you seen other Blue Ocean-like approaches implemented in your neighborhood? Tell us about it.

Blue Ocean Strategy - Xerox: Speeding towards Blue Oceans on two motors

Xerox: Speeding towards Blue Oceans on two motors - Blue Ocean Strategy

“To tip the cognitive hurdle, not only must you get your managers out of the office to see operations horror, but also you must get them to listen to their most disgruntled customers firsthand. To what extent does your top team actively observe the market firsthand and meet with your most disgruntled customers to hear their concerns? …. Simply put, there is no substitute for meeting and listening to dissatisfied customers directly.” (Blue Ocean Strategy, p. 155)

For anyone who has ever been an office intern, or had the unfortunate responsibility of overseeing the office copy machine, you know how nightmarish things become when the copy machine goes down. We recently came across an article discussing that very frustration, and what Xerox is doing to sidestep it. And in this particular respect, its efforts correlate to a central tenet of Blue Ocean Strategy: to really observe and listen to customers.

It seems that someone at Xerox, Blue Ocean Strategy company, dreamed up the idea of building a copy machine that ran on two motors. Typically, copy machines run on one motor, but the idea was to have a second motor which would be used to handle special inks and fancy colors. But rather than following the company's standard development process of building the prototype and then generate customer feedback, they decided to hold focus groups with customers to find out what they thought of the idea.

During the meeting, customers were asked what they thought of a high-speed machine that wouldn't have to shut down if a problem arose, but could operate at half-speed. Xerox, Blue Ocean Strategy company, officials and engineers were quite surprised by the positive customer response.

Stephen Hoover, vice-president of Xerox’s R&D:

The team had had a certain idea of what customers wanted. Going out and actually talking to them really changed that. The new focus became building a machine that would both run fast—pumping out 288 pages per minute with both engines working—and keep on running if one engine conked out.

With a better understanding of the customer under its belt, Xerox, Blue Ocean Strategy company, is set to launch the first copier that can run on only one of its two engines if the other goes down. As Xerox engineer Ed Wooten said, “If we hadn't listened to our customers, we wouldn't have had that unique differentiator."

Blue Ocean Strategy - The Perfect Calm Series: GoLoco.org

The Perfect Calm Series: GoLoco.org - Blue Ocean Strategy

One of the most exciting spheres of application for Blue Ocean Strategy is the realm of Social Capitalism. This explosive market space is at the very intersection of successful business and lasting social impact. Traditionally these two spheres were considered separate, but the two can be pursued simultaneously via Blue Ocean Strategy. Periodically, we offer a feature from WorldChanging a repository site for stimulating ventures, ideas and concepts targeting this very intersection.

This week, we select the story: GoLoco.org.

Do you know of other companies, organizations or business visionaries sailing along the intersection of good business and social good? Share your ideas with the Creating Blue Oceans Community.

Blue Ocean Strategy - You’re never too old to get back in the game!

Blue Ocean Strategy - You’re never too old to get back in the game!

We’ve been following closely the Blue Ocean Strategy-induced success of Nintendo’s Wii, Blue Ocean Strategy Company, (check out some of our previous postings here and here) and their push to open up video-gaming to untapped markets, more specifically, non-gamers.

That’s why, when we came across this amusing story about the Nintendo Wii being cleverly introduced to an entirely new audience, we thought to share it with our Creating Blue Oceans community as an ideal example of turning non-customers into customers:

Blue Ocean Strategy: The marketing minds behind Nintendo looked beyond the traditional gamer mediums and advertised its innovations at targets as far from gaming as you can imagine, such as retirees. Nintendo even went against the current and took the Wii to an AARP convention. “The AARP thing was a little bit tough at first. They were like, ‘We don't really want to talk to you because we're all grandparents and we already buy stuff for our kids,’ and so we said, ‘No we want to talk to you about you,’” said Perrin Kaplan, VP Marketing & Corporate Affairs for Nintendo of America. “It took several attempts for them to finally say, ‘So why do you want to talk to us?’ And it's because we have products for them as well now.”

Blue Ocean Strategy: Nintendo’s efforts seemed to have paid off. The Chicago Tribune is reporting (registration required) that the Wii is now the latest rage at the Sedgebrook retirement community in Lincolnshire, where the average age is 77. In particular, the Wii Bowling component of Wii Sports has members of the retirement community hooked on playing the Wii installed inside the Sedgebrooks’s clubhouse lounge.

“I've never been into video games, but this is addictive,” said 72-year-old Flora Dierbach. “They come in after dinner and play. Sometimes, on Saturday afternoons, their grandkids come play with them … A lot of grandparents are being taught by their grandkids. But, now, some grandparents are instead teaching their grandkids.”

Nintendo’s Wii, Blue Ocean Strategy Product, is improving the quality of life for retirement community residents, their families and friends, and carving out new customers for itself. That’s Blue Ocean Strategy in action.

Blue Ocean Strategy - New market space right under your nose

Blue Ocean Strategy - New market space right under your nose

Last week we posted the entry 'Uncontested market space right under your nose’ which discussed Pushmail and getting connected to ‘always on’ email. When we began searching for a mobile email solution that would deliver email to our messaging devices in real time we were rather surprised (and disappointed) to find out that these solutions exist primarily for large corporations because “pushmail” requires fancy servers and expensive software!

What we found out was that smaller companies, consultants and sales people who are independently employed are, for the most part, left in the dark.

Since we posted that entry we came across an interesting article entitled ‘Nokia: Blackberry isn’t the enemy’ which supports our point. At a recent Nokia event in Bangkok, Mathia Nalappan, Nokia’s Asia Pacific vice president for Enterprise Solutions told ZD Net:

When you look at the enterprise e-mail space today, most deployment is at the C-level and middle managers, the busy mobile executives. But they represent less than 2 percent of the total number of e-mail inboxes. The rest belong to less mobile mid-level managers and the masses below them, so there’s still 98 percent of the market that is wide open to us.

So it seems that Nokia has set its sights on the wide, uncontested market space we talked about. Now the question is: how much longer will we have to wait for the solution?

Blue Ocean Strategy - The Perfect Calm Series: Empowerment through Laziness

Blue Ocean Strategy - The Perfect Calm Series: Empowerment through Laziness

One of the most exciting spheres of application for Blue Ocean Strategy is the realm of Social Capitalism. This explosive market space is at the intersection of successful business and lasting social impact. The two can be pursued simultaneously via Blue Ocean Strategy. Periodically, we offer a feature from WorldChanging a repository site for stimulating ventures, ideas and concept targeting this very intersection.

This week, we select the story Gradually Greening: Empowerment through Laziness.

Do you know of other companies, organizations or business visionaries sailing along the intersection of good business and social good? Share your ideas with the Creating Blue Oceans Community.

Blue Ocean Strategy Company - LG’s Heart and Seoul: 2 By 10

Blue Ocean Strategy Company - LG’s Heart and Seoul: 2 By 10

We recently came across a snapshot of the promotional materials for LG’s Blue Ocean Strategy campaign, Blue Ocean Strategy Company. The campaign, entitled ‘BLUE OCEAN 2 BY 10’ represents LG Electronic’s aim to be among the world's Top 3 mobile communications companies in three years, and the Number 2 player by 2010.

The blog jeffooi.com has some interesting stories and photos from a recent promo tour LG, Blue Ocean Strategy Company, gave to journalists about its Blue Ocean Strategy at its Seoul headquarters. According to Jae Bae, LG’s Executive Vice President for Overseas Sales & Marketing Division:

To be the Top 3 in three years' time, the entire LG, Blue Ocean Strategy Company, workforce -- from product development, global marketing and distribution to analysing customer feedback and user experience -- has been psyched on the mantra of ERRC Framework which, in the LG's adoption of Blue Ocean Strategy, stands for Elimination (of factors that the industry have taken for granted), Reduction (of factors that are below the industry standards), Raising (of factors well above the industry standards) and Creation (of factors that the industry has never created).

Some acknowledge that LG’s goal seems pretty ambitious. But as Blue Ocean Strategy shows, it is only when we raise the bar to seemingly absurd levels that we begin to rethink everything. And it looks like LG has done quite a bit of rethinking over the past year, as evidenced with the sale of over 7,5 million Chocolate Bar phones and 21 of its products receiving accolades at the recent International Forum Design Awards in Germany.

Blue Ocean Strategy Article - If you can’t beat your rivals, don’t join them!

Blue Ocean Strategy Article - If you can’t beat your rivals, don’t join them! - LG, Blue Ocean Strategy Company.

You likely recall an entry we posted last week entitled 'LG’s Heart and Seoul: 2 By 10' regarding LG’s Blue Ocean Strategy mantra to rank as one of the Top 3 mobile communications companies in three years, and the Number 2 player by 2010.

Continuing the popular LG dialogue, we share with our Creating Blue Oceans community a copy of a recent interview with Gabor on LG and its implementation of Blue Ocean Strategy, specifically in India.

The interview is featured in the March 2007 edition of The Analyst, the flagship publication of ICFAI University Press, which brings to life the insights and best practices of corporate world in the area of finance.

The interview begins with the question from The Analyst “What is the rationale behind LGEIL adopting the Blue Ocean Strategy in India?” To this, Gabor responds:

LG is adopting the Blue Ocean Strategy (BOS) in India as part of its global strategy. LG has set ambitious growth targets for both revenues and profits for which BOS provides the blueprint for achievement. While other strategic concepts tell companies how to survive or realize incremental growth in well-defined, over-saturated markets (which we call “red ocean” market space), BOS gives a framework for breaking away from the competition to achieve high customer value and profitability simultaneously (which we call “blue ocean” market space).

More specifically, India has market attributes that make the application of BOS especially compelling: It is a vast and rapidly evolving market, so the business potential is ample over here. Indian consumers are very sensible and closely consider product attributes before purchase; so real product distinction is important.

Furthermore, LG, Blue Ocean Strategy company, has a strong position in almost every one of its product categories in India which would be difficult to maintain and expand, unless a strategy of continuous innovation is adopted. And lastly, LG is looking at India not just as a market destination but also as a production and export base. Therefore, adopting the right strategy and accompanying internal culture will help LG to build a strong international center of operations in India.

Blue Ocean Strategy - The Starbucks Struggle: Wake up and smell the coffee

Blue Ocean Strategy - The Starbucks Struggle: Wake up and smell the coffee

Blue Ocean Strategy Example - Starbucks - Blue Ocean Strategy Company

“There’s no such thing as a permanently great company or a permanently great industry. All industries rise and fall as do companies. However, there are permanently smart strategic moves” -- W. Chan Kim & Renee Mauborgne (“Flouting Conventional Wisdom,” Chief Executive Magazine, May 2003).

We recently read a though-provoking article at BusinessWeek online entitled “Latte Questions for Starbucks' Execs.” It highlights Starbucks struggle to cope successfully with its growing pains as it joins the ranks of multinational heavyweights.

The article cites a memo written by Starbucks Chairman Howard Schultz entitled "The Commoditization of the Starbucks Experience." While for some at Starbucks the leaking of this memo was a bit of an embarrassment, we feel that Mr. Schultz, in his memo, brings to light a critical point that is oftentimes overlooked in business today:

In 25 years I have written hundreds of memos, and if I look at the theme and the thread of those memos through the years, there is a common thread … It's self-examination, it's the pursuit of excellence, it's the willingness to constantly challenge yourself and not embrace the status quo … It is important we take a step back and ask ourselves a serious question, about whether or not we're as good as we once were, whether we're good as we need to be.

Mr. Schultz’s sentiment reminds us of the entry we posted two years ago entitled “Are There Really No Permanently Great Companies?” All companies face difficult or life-threatening challenges at one point or another, and it is their adaptability to make smart strategic moves which allow them to prosper even in the face of adversity. And clearly, Mr. Schultz and his team are now facing the challenges of continued flexibility. May we suggest Blue Ocean Strategy for guidance?