MBA1803 Must Read: Blue Ocean Strategy by W. Chan Kim and Renée A. Mauborgne

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Visit Dell.com deals. Hey oh. Welcome to the Hundred Dollars MBA show, the business podcast that gets you pumped every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is a must read episode. On Must Read Episodes I share with you a book that I've read that has influenced me as an entrepreneur. I share with you its takeaways, its insights and why you should read it too. Today's must read is Blue Ocean Strategy by W. Chan Kim and Renee Malbourne. This book might just change your business forever. It may allow you to skyrocket and leave your competition in the dust. This is one of the most powerful mindset and mind shifting books you can read and I was kicking myself for not reading this book way earlier. For some reason this book just kind of got shelved and I never got around to read it. I was reading other books and as you know I share those books with you on the podcast. But finally I said, you know what, I'm going to read Blue Ocean Strategy and boy am I glad I did. In fact, after reading this book I made some big changes to the vision of my company to what I'm going to be focusing on in the next three, four, five years. It's that powerful. Why? Well, that's what we get into in today's lesson. What is the Blue Ocean strategy? What are its key elements and how you can implement it in your own business? Can't wait to get into this one. So let's get into it. Let's get down to business.

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Is this such a must read book? Well, this book is great even if you're just getting started. In fact, it'd probably be even more important if you're just getting started. If you're an established business is just as powerful and helpful. Most companies operate in a red ocean or red ocean markets. It's called Red Ocean because it's marked by its intense bloody competition. But it doesn't have to be this way. By following the systematic process that they share in the book, you can make what's called a blue ocean shift that moves you beyond competition and opens up brand new untapped market opportunities. A good portion of, I would say the first 15 to 20% of this book is drilling home what a blue ocean is and why it's so important to have or to create for your business. Most of us will go into a market that has competition, that has other players offering the same thing we do. We just think we can do it better. But essentially we are in a red ocean. It's super hard to stand out and to grow rapidly and have sustainable success when you're in a red ocean because the competition is so fierce, you release one feature or one extra thing, so does your competition. You lower your prices, so does your competition. It's cutthroat, it's incredibly stressful and it's not creative. And yet most of us all do this. We open a pizzeria when there are other pizzerias in the neighborhood thinking our pizza is just going to taste better and we're going to be better. We write a business book thinking that this business book is going to help other entrepreneurs better than other books. But lo and behold, you're competing with so many books in the business category in Amazon. These are just examples. But what if you are in a blue ocean market, meaning no one competes with you because what you offer has no competition and yet it's not new or needs new adoption, meaning that it's not so foreign to people. One of the examples they give in the book of a blue ocean company or a business that created a blue ocean for themselves is Cirque du Soleil. The circus business is incredibly costly. The performers are costly. The animals are really costly. The traveling people lose limbs because tigers go wild. The point here is that circus business is tough. On top of that, they couldn't really charge a lot of money for admission at a circus is seen as kind of a lower class or even a middle class kind of entertainment. Cirque du Soleil wanted to come up with a circus, but didn't want to deal with all the problems of it or the low margins. So it carved out its own market. It created an entertainment spectacle of music and a bit of story and a bit of dance. No animals, no tents. They really got specific and really niched down and were able to charge more than the circus because it started to look more like the theater and less like the circus and yet fun like the circus. So you would get the circus crowd to come to Cirque du Soleil and it would get the theater and ballet and opera crowd to come to Cirque du Soleil. And who competes with Cirque du Soleil? Nobody, because they carved out their own blue ocean. Now, notice they didn't say, we're going to start a better circus. They said, we're going to start a different circus. Better, but different. Their implementation is different. They change the game. They don't want to compete with other circuses. They want to have no competition. And that's just one of many examples they give in the book of. Of creating a blue ocean. In the book they talk about the specific ways which new markets are created. For instance, you might assume that markets are established when new ideas arise, new ideas that are fundamentally better or new. But there are actually three more specific market creating strategies. And in the book they lay out what these three are in detail. The first category is what we typically think disruptive innovation. A good example of this is digital photography. Kodak never adapted to a digital film and photography, so they obviously didn't survive. Digital photography disrupted the market and created a blue ocean for itself. But there's also non disruptive creation or non disruptive markets in which markets are neither destroyed or replaced, they're just new. The example they give in the book is Viagra. This drug didn't disrupt any industry. It just cured a problem that everybody just decided was a problem everybody's got to deal with or men have to deal with. Pfizer, the company that creates Viagra, said, no, we're going to create something to solve a problem that no one else is solving. And then finally, and this is where the book really uses a lot of its time and effort in helping you with, is a strategist in in between these two strategies, it's the third, often overlooked middle way this strategy comes into play when an existing problem is redefined. Basically solving a problem in a different and better way. For example, they mention this french fryer, like this frying machine called Actifry that fries your food with basically no oil. It's kind of like an air fryer. So enjoy fried foods without the guilt. They didn't invent frying foods. Okay, there are oil fryers out there. But they implemented the frying at home way in a better, more innovative, more useful way. In other words, you can either create breakthrough products that replace existing ones, or you can identify and solve brand new problems. That or redefine your approach to an existing problem. One of the ways to verify if your blue ocean idea or strategy or business will actually work and solve problems is to talk to your customers. And this is actually what we have been doing for the last few months. Working on something that we're working on in our business. Finding out what is the current situation for them, what is their workflow, how do they pull off what we're asking them to do? Hey, if you want to accomplish X, what do you have to do? And we learn a little bit more about their frustrations through that process. What they love, what they hate, what they use, what they don't use, what they wish they could do differently. We actually do video calls and record it. We see their facial expressions, we transcribe it. We find the language they're using. We compare those interviews with other interviews that we do and see what are the commonalities, what are the differences? How are they using the tools they currently use? Is it the same way across the board or is it differently? And through this information we can learn, aha. There is a problem that we're all just kind of accepting. How about we come up with a solution? Is it a big Pain? Yeah, it's a big pain. So they're willing to pay for it if it's a big pain. This book really opened my eyes to understanding. Hey, you don't have to be revolutionary with your product or service or business in total, but you do need to be unique in the way you solve the problem. Or you need to be unique in which problems you're solving. The book also goes through the strategy of pulling off this Blue Ocean strategy because as they say in the book, an organization that has the confidence to make a Blue Ocean shift but lacks the knowledge of how to get there is like a gambler. Okay? You don't want to gamble with your business. You want to have a strategy to implement.

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Edu Blue Ocean Strategy is a fantastic book. It is though very, very thought provoking. Meaning you can't just rush through this book. You will find yourself stopping and thinking and pondering about how you can do this in your business. Whatever they're talking about in the book, you'll have some aha moments. You'll have some, you know, mind blown moments and books like this that change the way you think, that rewire brain take a while to absorb. So take your time. Don't feel that you have to rush through this book. There's some big concepts and some big mind shifts here. So when it comes to implementing your Blue Ocean strategy, one of the things that they recommend in terms of your implementation is to plot your competitive value against that of your rivals. That way you'll have a clear picture of where you stand. Is the way you implement your value significant enough to be in a blue ocean or are you still kind of hanging around that red ocean? Another great little tip is to chart your customers experience to make your product more accessible. Easier to use. One of the examples they talk about the charity Comic Relief and the Red Nose Day. How do you their competition solve the problem of raising funds versus them? How do they make it fun? How do they make it easier? Instead of badgering people over their head every single day of the year to donate, they make one day of the year which is called Red Nose Date and they raise millions of dollars. Lastly, the book wraps up by talking about how to create your Blue Ocean team within your business so you can work on this new strategy and implement it as soon as possible. This book Blue Ocean Strategy is a game changer because there's nothing worse than starting a business, putting your mind, your time, your energy, your money into something for years. And realize, man, I just can't get ahead because the competition is fierce. I'm a small business, I don't have endless cash and endless resources. It's time to start thinking about shifting into a blue ocean. And even if you have an existing business, this is totally doable without losing your existing customers. Thanks so much for listening to the 100 OMBIE Show. If you love what you hear, hit subscribe and leave us a rating and review on Apple Podcasts. We'd love to hear from you. Let us know what your favorite episode is. If you got something out of today's episode. If you like must read episodes or guest teacher episodes, let us know. We'd love to hear from you. We read every single review. Before I go, I want to leave you with this. I read around 50 books a year. Some are great, some are good, some are not so good. This is a great book. But out of those 50 a year, maybe, maybe one or two books a year will cause me to change what I'm doing in my business and make me want to change it immediately. And this is one of those books. This is a powerful book. Pick it up, read it, take notes, and implement what you learn. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

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