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Blue Ocean Strategy in Action |
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Blue Ocean Strategy in Action
Recently, the Blue Ocean Strategy Australia (BOSA) group featured Dingo in their corporate newsletter as an example of learning from a company who has successfully incorporated the Blue Ocean Strategy into its business practices. Following is the history on the Blue Ocean Strategy and how Dingo has used it over the years to evolve to the group of lubricated asset experts they are today.
In today’s cautious economy, many companies find themselves jostling for position in an overcrowded marketplace. Consumers guard their dollar more now than in decades past and take the time to find a product or service in which they can get their needs met but still save money. With so many businesses competing for attention, maybe it is time to re-think business strategy…maybe it is time to paddle into wide open waters.
Blue Ocean Strategy (BOS) was written by W. Chan Kim and Renee Mauborgne in 2005 and analyzed 150 strategic moves over more than 100 years and within 30 industries. BOS is the simultaneous quest of differentiation and low cost. The aim of BOS is not to out-perform the competition in an existing industry, but to create new market space or a “blue ocean” thereby making the competition irrelevant.
A “Red Ocean” would include all the industries in existence today – the known market space. Industry boundaries are defined and accepted. Companies try to outperform rivals to get a greater share of product / service demand. As the market space gets crowded, prospects and potential for growth lessen. Ruthless competition turns the ocean bloody.
In contrast, a “Blue Ocean” represents all industries not yet in existence – the unknown market space. Demand is created rather than competed for. Growth is profitable and rapid. Competition is irrelevant. The foundation of BOS is “Value Innovation” which creates value for both the buyer and the company at the same time. Where in the Red Ocean, a company adapts to trends as they occur, those in the Blue Ocean shape the trends over time.
Blue Ocean Strategy strategic moves exist within many industries and across organizations of all types and sizes, from established companies to start-ups. Dingo has operated from this strategy for many years as they have grown and evolved into the group of lubricated asset experts they are today.
20 years ago, Dingo was a custom software development company operating in a red ocean market. Within a few years, due to requests by mining customers, they had evolved to a group that not only created oil analysis software for asset-intensive companies, but provided an entire oil analysis program to those same customers. The data evolved into processes which produced measurable financial results.
The creation of this program, known as Condition Based Asset Management, was a Blue Ocean strategic move because the company not only created technology innovation, it created new market demand. Breaking away from traditional processes, Dingo offered a new type of asset management for mining companies. It created a new market space focused on delivering measureable financial results.
However, this did not happen overnight. After refining the strategies of their offerings which had the highest potential, Dingo needed to have them validated with noncustomers and customers. During this validation phase of their Blue Ocean Strategy project, Dingo learned a valuable lesson.
Paul Higgins, CEO of Dingo, explained it to the BOSA group this way: “Our team thought we had struck on a ‘knock-em dead’ strategy when we decided we could offer our clients a ‘no risk’ trial, or pilot program, of our services.”
“But we kept getting push back from our clients and none of them seemed able to explain the real reason for ‘no-risk programs’ faltering. Then, one non-customer told us, ‘If you make it ‘no-risk’, then my team has nothing invested. I need to make sure we have skin in the game so that everyone involved knows that we are serious about supporting a real trial. Then we’ll get buy-in.’ Well, that was a revelation for us,” Paul said.
He went on to say, “It wasn’t the only thing we tested and refined in our Blue Ocean Strategy, but since then we haven’t looked back. Over the last couple of years, our Blue Ocean Strategy has had an enormous impact on our business growth.”
It is good to remember, no matter the size or success level of a company, there constantly must be emphasis placed on validating key success factors. Continuing to grow and test strategies makes the competition less and less relevant and increases the horizon on a company’s Blue Ocean.
To learn more about the UCSI® Blue Ocean Strategy Regional Centre, please visit: www.blueoceanstrategyaustralia.com.au
If you are interested in lubrication training programs offered by Dingo, you are invited to visit Dingo at www.dingo.com or contact us directly by phone or by e-mail at goverboe@dingo.com. In North America call +1 888 346-4630 and in Australia, call +61 7 3115 9000.
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