I just returned from the In-Plant Managers show in Albuquerque. It is a privilege to work with the IPMA and speak to the in-plant managers. Many people in the commercial market don’t realize that in-plants struggle with many of the same issues as their commercial printing cousins, especially when the economy declines. Besides the temperatures of over 105 during the day and one room where the air conditioning was set at 65, the show was great – especially the keynotes. Two excellent keynoters started the first two days. Bill Farqueson is a funny, charming, and very motivational speaker. Barb Pellow was great too. She was more strategic as she tied ideas from the book The Blue Ocean Strategy to business strategies in the graphic arts. The Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne. The Blue Ocean Strategy is a business model, marketing or sales strategy that focuses on 'Value Innovation.' Blue Oceans denote all the industries that don’t exist or are early in development and untainted by competition. In Blue Oceans, demand is created rather than fought over. It could be argued that variable data printing or cross media marketing are Blue Ocean strategies because only those companies willing to educate clients are reaping the rewards. In Blue Ocean companies there is more opportunity for growth that is both profitable and rapid. In Blue Oceans, competition is irrelevant because the rules of the game are waiting to be set. The Blue Ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. In contrast, the Red Ocean strategy is where most of us compete today. In Red Oceans, industry boundaries are well defined and accepted, and the competitive rules of the game are known. Like most companies in print production today, Red Ocean companies try to outperform their rivals to grab a greater share of product or service demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities or niche, and cutthroat competition turns the ocean bloody. Hence, the term Red Oceans. In Barb’s presentation three examples were offered. I had trouble relating to the wine company but could easily identify with Southwest Airlines and Ikea. Southwest Airlines was not designed to compete with other airlines but instead designed to compete with driving the same distance. Imagine that, don’t design your company to compete with printers but to compete with other ways to communicate messages! The other example was the furniture company Ikea, which was targeted for first time apartment or homes owners, with products that also appeal to upscale buyers. Another concept you probably heard before, focus your products and services on a unique niche. The corner-stone of Blue Ocean Strategy is 'Value Innovation.' A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. The innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market. Therefore, I would include Apple as a Blue Ocean company. Although they were not the first to market with MP3 players and smart phones, they created products that were so much better that consumers don’t mind spending a little extra to buy them. This is a philosophy I preach to printers too. Create a value proposition that is so compelling that customers will not hesitate to spend a little more for your services. What do you think of these two philosophies? Does it make sense to you? And which ocean are you playing in? Is your company a Blue or Red Ocean company? Howard Fenton is a Senior Consultant at NAPL. Howie advises commercial printers, in-plants, and manufacturers on workflow management, operations, digital services, and customer research.
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