18 May 2005

P2P & Blue Oceans

Two recent posts, slightly edited, juxtaposed for pondering and discussion. The first is from Dave Pollard's excellent "How to Save the World" blog. The second is from the well-focused "Innovation Weblog":

"Peer-to-peer service models will emerge. This could be fascinating, because there's a precedent for it in just about every country that has ever suffered through an economic collapse. The next generation may start by working their way through university fixing computers inexpensively for the big, sloppy computer manufacturers.

But why would they stop there? Once they become expert at repairing your piece-of-shit Dell computer, why wouldn't they start building their own, and offering much more customization, better upgrade capability, lots of free, Open Source software bundled in, and friendly, reliable, knowledgeable local service? At a fraction of the price.

Yes, at first some of them may be pretty crappy themselves, but the market will work that out, just as it did with the Japanese manufacturers when they first entered the Western market (remember when Made in Japan was synonymous with poor quality?) And if you buy your next computer from your neighbour's son's upstart enterprise, why not do your banking through your niece's new community bank, part of a huge peer-to-peer network of community banks all helping each other out? And why not a new industry comprised of young legal students (or retired lawyers) offering alternative dispute resolution services for $20/hour instead of the $200 the lawyer charges? Lots more examples spring to mind."

From Innovation Weblog:

... Last fall, Harvard Business School Press published a book by W. Chan Kim and Renee Mauborgne called Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. In this blog post, Alan Wunsche, author of the Business on Demand weblog, reviews the book, and compares its focus to that of The Innovator's Solution.

"Blue ocean strategies create uncontested market space, creating and capturing new demand. Red ocean strategies are designed to compete more effectively in existing market space to beat the competition. Blue ocean strategies break out of this narrow tunnel vision of competition by first understanding that whole industries naturally succumb to strategy convergence through endless benchmarking and similar customer segmentation exercises.

Kim and Mauborgne present a compelling analytic and strategic planning tool they call the ’strategy canvas’. By understanding 4 key sets of strategic questions to challenge the existing business models, they demonstrate that it is possible to fundamentally shift the strategy canvas of an industry."

Where does the similarity to The Innovator's Solution come in? Alan explains that "the similarities lie in the true understanding of how customers value the products and services you provide." And which you could provide, I might add. Christianson and Raynor call this helping customers by providing them with innovative products and services that help them with the jobs that they need to get done."

Peer-to-peer service models. "Blue ocean" strategies. Ponder. Discuss.

The Jenius Has Spoken

1 comment:

Dave Morse said...

I discovered your blog randomly through a Google search for "Blue Ocean Strategy". I'm curious to know if you've gone through defining and implementing this strategy in a company? I work for a small software company, and we're in the midst of doing so now ... but are struggling with (what seems like) minor, painful details, but are actually fundamental (e.g. the 'factors of competition' - hard to come to agreement on these).

Your thoughts?

Dave Morse

(dave.morse at gmail dot com)