Blue Ocean Tools Support Relevant Market Research
Blue Ocean Strategy is a strategic framework that encourages businesses to create an innovative brand in order to compete in a field of their own. This strategy stands in opposition to the traditional view that all businesses in one field are in direct competition with each other. The Blue Ocean is a metaphor that represents finding an untouched area of the market. In order to implement Blue Ocean Strategy, detailed market research is an essential first step, and good research begins with asking the right questions.
The first phase of question development for market research consists primarily of visualization activities. Visualization expands the possibilities and alternatives that are considered. The second phase is one of contracting and honing in on the best of options. The first phase is divergent, while the second phase is convergent.
"All innovations [begin] as creative solutions, but not all creative solutions become innovations." ~ Richard Fobes
Four Actions to Streamline Strategy
The Blue Ocean approach calls for four actions to be used to streamline strategy. The actions are guided by the following questions:
- Which of the factors that the industry takes for granted should be eliminated?
- Which factors should be reduced well below the industry's standard?
- Which factors should be raised well above the industry's standard?
- Which factors should be created that the industry has never offered?
Market research questions can be generated for each of these important questions, but further consideration will streamline the process. For example, rather than trying to ask about the industry standards, a market researcher will want to be more customer-centric. This means asking market research questions about what the potential or actual customers value about a product, service, or brand.
Contraction and Expansion, Convergence and Divergence
The questions from the Four Actions Framework are converted into actions that populate the quadrants of the Eliminate-Reduce-Raise-Create (ERRC) Grid. The actions exhibit the divergence and convergence that is characteristic of Creative Problem Solving (CPS).
The Eliminate-Reduce-Raise-Create (ERRC) Grid compels thinking and action that either eliminates or reduces various elements, while raising and creating other elements. The ERRC Grid is straightforward and quite easy to understand, which makes it a good tool for communicating with others and for building a strong level of engagement. Because of these characteristics, the ERRC Grid is a good tool to use for generating market research questions.
Using the ERRC Grid to Develop Market Research Questions
Market researchers can use the grid structure to reveal implicit assumptions and unconscious thinking about innovation and competition. Blue Ocean strategy is all about doing business differently, developing niche opportunities, and driving down costs by avoiding conventional, expensive activities that don't add consumer-centric value. Market researchers can develop questions that:
- Foster the ability to aggressively pursue product differentiation
- Enable the pursuit of low costs in production to increase value
- Avoid the trap of focusing just on conventional business strategy goals
The Blue Ocean Strategy Canvas and the Value Curve
The thinking that took place to move through Visualization, the Four Actions, and the ERRC Grid is manifest in the Strategy Canvas. The Blue Ocean strategy canvas is a diagnostic tool and a framework for action that helps market researchers ask the right questions for supporting the development of a competitive strategy.
Each strategy canvas depicts a value curve that is unique to the niche product or service. The value curve is a graphic depiction of the prospective, envisioned relative performance of a new product, service or start-up as shown against the traditional competitive factors in the industry.
- The strategy canvas can be used to identify the various elements present in an industry and to better understand how to compete differently based on those and new blue ocean elements.
- The strategy canvas can be used to support efforts to reorient from a focus on competitors and existing customers, which is a common failing of start-ups and to hone in on alternatives and noncustomers.
A robust Blue Ocean value curve can be recognized by its compelling tagline, divergence, and focus. Market researchers can utilize Blue Ocean tools to develop questions, approaches, and strategies.