recession proof your business_july 2009
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Learn How To Recession Proof Your Company Using Blue Ocean StrategyTRANSCRIPT
How To Recession ProofYour Business
Waterside Consulting LLCChicago, Illinois, USA
How To Recession ProofYour Business
Waterside Consulting LLCChicago, Illinois, USA
Summer 2009 www.WatersideConsulting.net
Summer 2009 www.WatersideConsulting.net
Waterside Consulting
Introduction
Summer 2009 www.WatersideConsulting.net
About Waterside Consulting
• Since 2005, Waterside Consultants have:
– Provided strategic business consulting and advanced marketing consulting services using Blue Ocean Strategy.
– Helped Fortune 1000 and mid-sized companies with both “high level” and tactical business marketing and strategy.
– Served its clients in real time and operated virtually to optimize strategy development and resources associated with typical high-end consulting.
We’re the world’s first virtual
Blue Ocean Strategy consulting firm
We’re the world’s first virtual
Blue Ocean Strategy consulting firm
Summer 2009 www.WatersideConsulting.net
Principals:Carrie Halle
Senior Principal
• Carrie Halle is a Senior Principal with Waterside Consulting.
– Over 12 years of senior level marketing experience with consumer and industrial companies.
– Held senior level marketing positions at Ameritech, Motorola, NEXTEL and Zurich.
– CEO of a mid-size residential services firm.
– Developed and conducted marketing campaigns which have generated from $250,000 to $500 million in revenue for small and large companies.
– MBA from the University of Wisconsin-Madison, Major in Marketing, Dean’s List Honor student.
– BBA from the University of Wisconsin-Madison, Majors in Marketing, Management and Advertising.
Summer 2009 www.WatersideConsulting.net
Principals:Michael BoldenLead Strategist
• Michael Bolden is the Lead Strategist for Waterside Consulting.
– Over 15 years work experience in strategic development and has practiced Blue Ocean Strategy since its introduction in 2005.
– In recent work, developed a $200 million business for a “big box” retailer utilizing Blue Ocean Strategy.
– Worked for Accenture, Ernst & Young, CSC and 3M.
– Developed BOS 2.0 which is the next generation BOS focused around "owning market space" and dominating a given market.
– MBA from University of Chicago Booth School of Business, Majors in Marketing, Policy (Strategy), Finance and Production Management, Dean’s List Honor student.
– BS from Stanford University in Industrial Engineering.
Summer 2009 www.WatersideConsulting.net
Recession Proofing
Your Company
The Great Tail Chase
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Overcrowded Market Space
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Profitability declines
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tacticsRevenues
decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Revenues decline
Expenses remain
high or grow
Cash flow becomes
tight
Profitability declines
Launch more
offensive tactics
Profitability declines
Market Space A
Move Into New Market Space
• Move out of the overcrowded market space.
• Move into a new market space where there is no competitor – wide open playing field of potential revenues and profits.
• Forward thinkers are shifting their focus from recession to recovery … and they will be poised for growth when the economy turns around.
Summer 2009 www.WatersideConsulting.net
How do we do this?
Blue Ocean Strategy
Summer 2009 www.WatersideConsulting.net
About Blue Ocean Strategy
• Blue Ocean Strategy, by W. Chan Kim and Renee Mauborgne, is an international best seller with over one million copies sold and translated into a record-setting 41 different languages.
• Published in 2005 by Harvard University Business School.
• Waterside Consulting uses Blue Ocean Strategy Basics and our Proprietary 2.0 Version to help clients create uncontested market space and make the competition irrelevant.
Summer 2009 www.WatersideConsulting.net
Blue Ocean Strategy (BOS)
• Create uncontested market space
• Make the competition irrelevant
• Create and capture new demand
• Break the value-cost trade off
• Pursue differentiation AND low cost simultaneously
Basic Definitions
• Red Ocean: Markets or industries where competition is competing for greater share of existing demand that is typically stagnant or declining (the bloody battle).
• Blue Ocean: Markets or industries where there is no competition because it is an untapped market space. The rules of the game are waiting to be written.
• Value Innovation: Creating a blue ocean by creating a leap in value for buyers of your company’s products and/or services, thereby making the competition irrelevant.
• Strategy Canvas: An analytical framework or tool that helps you to determine Value Innovation by looking at the factors the industry current competes on and plotting your product/service against your key competitors.
Summer 2009 www.WatersideConsulting.net
Summer 2009 www.WatersideConsulting.net
“Real Life” BOS Examples
Companies:– Federal Express– IKEA– Apple– Starbucks– Curves– Saturn– Nordstrom's
• Product Examples:– Television– Computer– Cell Phones– RIM Blackberry– Nintendo Wii
It’s not just about technological
advancements; it’s about creating a new market space
It’s not just about technological
advancements; it’s about creating a new market space
Summer 2009 www.WatersideConsulting.net
Strategy Canvas
• The key tool and cornerstone for initiating and formulating BOS is the Strategy Canvas:
– Dimensionalizes the major features or benefits of a product, company, or industry.
– On the Y-Axis are the relative value utilities of high, medium, and low.
– On the X-Axis are the dimensions, and on the Y-Axis is the relative scale or utility.
– Blue Ocean Strategy’s most powerful tool.
– Intuitive and simple, but yet non-obvious.
Strategy Canvas Visual
Summer 2009 www.WatersideConsulting.net
Mid-Size Compact Vehicle Value CurveSaturn vs. Average Mid-Size Compart Car Buyer
0.5
1
1.5
2
2.5
3
Style Gas Mileage Safety Reliability Price
Factors
Rati
ng
Average Mid-Size Compact Car Buyer Saturn Car Buyer
Low
Medium
High
Four Action Framework
EliminateEliminate
ReduceReduce
RaiseRaise
CreateCreate
Which of the factors that the industrytakes for granted should be eliminated?
Which factors should be reduced well belowThe industry standard?
Which factors should be raised well above the industry standard?
Which factors should be created that the industryhas never offered?
Value Curve Visual
Summer 2009 www.WatersideConsulting.net
Mid-Size Compact Value CurveSaturn vs. Mid-Sized Compact Vehicle Competitors
0
0.5
1
1.5
2
2.5
3
3.5
Style Gas Mileage Safety Reliability Price No HagglePricing
Employee-Owned
Company
Made InAmerica
On-Star
Factors
Rati
ng
Average Mid-Size Compact Car Buyer Saturn Car Buyer
New Factors
Summer 2009 www.WatersideConsulting.net
Value InnovationThe Cornerstone of Blue Ocean Strategy
• Focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.
• Value Innovation places equal emphasis on value and costs. Blue Ocean Strategy seeks to create blue oceans by the pursuit of differentiation and low cost simultaneously, unlike Porter’s model.
Buyer Value
Costs
ValueInnovation
The Simultaneous Pursuit of Differentiation and Low Cost
Summer 2009 www.WatersideConsulting.net
The “Secret Sauce” BehindRecession Proofing Your Company
• With Waterside’s BOS Advanced Proprietary 2.0 (book due out later this summer), there are two immediate “winners” for companies looking to increase revenue:
– Hyper Dimensionality
– Selective Feature Reduction
Hyper Dimensionality & Selective Feature Reduction Visual
Operating System Strategy CanvasPlanned Google Chrome OS vs. Microsoft Windows Vista OS
0
0.5
1
1.5
2
2.5
3
3.5
Requ
ires
licen
se
Requ
ires
upgra
des
Requ
ires
com
pu
ter
mem
ory
Man
ages
data
an
d c
on
ten
t on
you
r co
mpu
ter
Fig
hts
secu
rity
risk
s
Fast
acc
ess
to
the in
tern
et
Back
up a
nd
rest
ore
capabili
tes
Com
pu
ter
perf
orm
an
ceim
pro
vem
en
ts
Ru
ns
wit
hou
ttr
adit
ion
al
com
pu
ters
Man
ages
data
an
d c
on
ten
t in
the c
lou
d
Factors
Rati
ng
Microsoft Windows Vista Google Chrome OS
Feature Reduction (Elimination)
Hyper-Dimensional Features
Summer 2009 www.WatersideConsulting.net
Waterside Can Help
Summer 2009 www.WatersideConsulting.net
Signs Your CompanyIs Sailing Into Rough Waters
• Is your company “Chasing Its Tail” or experiencing the "Fatal Five" danger signs:
– Slowed or stagnant growth
– Decreased revenues
– Increased costs
– Lower profitability
– Unpredictable cash flow