03
PROBLEM
SOLVING
STRUCTURE
BLUE OCEAN STRATEGY
“Quarter-inch drill bits are selling well doesn't necessarily mean customers want Quarter-inch drills.”
Quarter-inch drill bits are selling well doesn't necessarily mean customers want Quarter-inch drills. What customers truly need is the ability to make Quarter-inch holes. By understanding, believe, this quote you are able to understand the difference between feature and value and this is essential to understand the concept of value component in Blue Ocean Strategy. By understanding the concept, you will be able to tailor the values to meet the specific needs of your target customers, thereby increasing values and lowering prices, which is called “Blue Ocean”
When Southwest Airlines redesigned their service to target short-haul travelers, they considered the customer's choices for travel, including bus travel, renting a car, and flying another airline, and compared the pros and cons of each. Based on the comparison, Southwest Airlines examined their value components and optimized them to meet the needs of their target customers, such as fast onboard transitions and frequent point-to-point departures at a reasonable cost.
Blue Ocean Strategy tailors products to a target customer's specific need by analyzing the value components of existing products in a market. By understanding the different values offered by various options, such as price, comfort, travel time, and safety, you can create a unique set of a product tailored to the user's specific need. In terms of analyzing existing products in the market, this is not for the purpose of researching products, but for understanding the choices that the target customer makes in selecting them in order to solve their problems.
Designing Solutions Based on Customer Values Beyond Features
HOW DO I APPLY THE BLUE OCEAN STRATEGY?
In my product development, I once misapplied the Blue Ocean Strategy by confusing product features with customer value. I aimed to create unique, cost-effective products by altering features rather than focusing on what customers truly valued. For example, in designing a foldable note to be sold online, I prioritized physical attributes, like portability and reduced shipping costs, over the actual needs and preferences of my target market.
This approach resulted in a product that didn't stand out in terms of customer value, leading to excessive marketing expenses to compensate. The experience taught me a crucial lesson: truly understanding and addressing customer needs is fundamental. The features and price should enhance the product's value, not define it. It's imperative to align product values with customer needs before scaling up production or launching a service to ensure market success.