Chapter 5 reach beyond existing demand blue ocean strategy
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Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy PowerPoint PPT Presentation


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Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy. John Beddington Scott Bearden Patrick Lewis Lauren Frick Trevor McDonald. Maximizing the Size of the B lue O cean. Look to non-customers; build on commonalities and what buyers value

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Chapter 5 Reach Beyond Existing Demand Blue Ocean Strategy

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Chapter 5 Reach Beyond Existing DemandBlue Ocean Strategy

John Beddington

Scott Bearden

Patrick Lewis

Lauren Frick

Trevor McDonald


Maximizing the Size of the Blue Ocean

  • Look 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


The Three Tiers of non-customers

  • Tier 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


Tier one: “soon-to-be” non-customers

  • Pret: British fast food chain

  • The 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


Tier two: “refusing” non-customers

  • JCDecaux

  • Solution: 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


Tier three: “unexplored” non-customers

  • U.S. Defense Aerospace industry: JSF

  • Solution: build one aircraft to accommodate the needs of multiple branches of the military

  • Tier three customers are not targeted by firms in the industry because they believe the customers belong to other markets


Three tiers and Amazon

  • Tier 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)


Takeaways

  • Understand 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


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