Four steps to creating your own market
Ever feel like you're caught in a feeding frenzy?
The waters of your marketplace are roiling, teeming with competition and turning red with the latest kill. You want to innovate, to stand out from your rivals and create your own market space in which you alone hold the key to your customers' success. But you can't; you're too busy trying to eat.
How do you escape the frenzy and find the open waters of the blue ocean marketplace?
If I knew that, I wouldn't be writing this blog.
But Don McDaniel has a few ideas.
McDaniel teaches a BLI program titled, "Blue Ocean Innovation: Market-Taker to Market-Maker." It's based on the book Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne, and it offers a nautical chart for finding your blue ocean: Offer your customers higher quality and better value at a lower cost, and the world is yours.
"The blue ocean is really an opportunity for a company to innovate into a market space that is completely uncontested, value-added or different in some dramatic way," McDaniel, president and CEO of Sage Growth Partners and a member of the faculty of the Carey Business School at the Johns Hopkins University, said in a recent phone interview. "In the blue ocean, traditional competition is irrelevant and companies are focused on value innovation."
Take Threadless, for example. The T-shirt company has found its blue ocean by involving its own customers in the design process. Customers use Threadless's online community to submit their own designs for T-shirts. Those designs are voted on by the community and the winning designs are manufactured and sold to the very community that designed them. Nearly all of the designs have sold amazingly well, McDaniel says.
"How many businesses do you know that have effectively outsourced all of their design efforts to their customers and watched everything they sell turn to gold?" he asks.
So how can the rest of us do that?
McDaniel points to a "four-actions framework" that forces us to re-examine what we do for our customers.
- Eliminate: What do we do that adds no value to our customers?
- Reduce: Which of our value-added activities aren't worth the effort we put into them?
- Raise: Which of our activities would rise well above industry standards if we put a little more effort into them?
- Create: Are there attributes that our customers value that we don't even consider today?
Do these four things, says McDaniel, and we'll be well on our way to the blue ocean. Really, though, the starting point is even simpler than that.
"Let's start with the client," McDaniels says. "What does the client want?"
It's amazing how far we can go when we start with that question.
Listen to my interview with McDaniel in its entirety in this MACPA podcast.
- Subscribe to our podcast here, or search for "CPA Spotlight" in iTunes.
Want to learn more?
McDaniel's program, "Blue Ocean Innovation: Market-Taker to Market-Maker" is available as a two-hour webcase on Sept. 25. It's also available as on-site training through our Customized Learning Solutions program. Get further details here.