Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy
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Transcript of Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy
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Chapter 5 Reach Beyond Existing Demand
Blue Ocean StrategyJohn Beddington
Scott BeardenPatrick LewisLauren Frick
Trevor McDonald
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Maximizing the Size of the Blue OceanLook to non-customers; build on commonalities
and what buyers value
To reach beyond existing demand, think non-customers before customers; commonalities before difference; and de-segmentation before pursuing finer segmentation
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The Three Tiers of non-customersTier one: “soon-to-be” non-customers who are
on the edge of your market, waiting to jump ship
Tier two: “refusing” non-customers who consciously choose against your market
Tier three: “unexplored” non-customers who are in markets distant from yours
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Tier one: “soon-to-be” non-customersPret: British fast food chainThe lesson: non-customers tend to offer far
more insight into how to unlock and grow a blue ocean than do relatively content existing customers
Look for the commonalities across their responses. Focus on these, and not on the differences between them. You will glean insight into how to de-segment buyers and unleash an ocean of laten untapped demand
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Tier two: “refusing” non-customersJCDecauxSolution: provide street furniture for
everyone that firms could use to advertise on at a low cost
Look for commonalities across their responses. Focus on these, and not on their differences. You will glean insight into how to unleash an ocean of latent untapped demand
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Tier three: “unexplored” non-customersU.S. Defense Aerospace industry: JSFSolution: build one aircraft to accommodate
the needs of multiple branches of the militaryTier three customers are not targeted by
firms in the industry because they believe the customers belong to other markets
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Three tiers and AmazonTier one: people looking to buy books and
electronics on-line now offered one website for all their needs
Tier two: Amazon offers value-added services to encourage “refusing” non-customers to buy from them
Tier three: Amazon offers such a wide array of products that it appeals to people not looking to buys books (unlike Barnes & Noble website)
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TakeawaysUnderstand the three tiers of non-customers
Tier one: “soon-to-be”Tier two: “refusing”Tier three: “unexplored”
“The Biggest Catchment”: don’t focus on a single tier, explore whether there are overlapping commonalities across all three tiers of non-customers