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Finding

g Blue Oceans
in the Exhibition and Convention Industry

Dr. Roch Parayre


Decision Strategies International

Blue Ocean Strategy


Searching for Uncontested Market Space

Industry A

Industry B

Copyright 2010 Blue Ocean Strategy Network

Industry C

What Do These Companies Have In Common?


Swatch
Formula One Hotel Chain (Formule
(Formule 1, Accor)
Home Depot
Bloomberg Financial News
Ralph
p Lauren
Starbucks Coffee
Southwest Airlines
Nintendo Wii

Copyright 2010 Blue Ocean Strategy Network

The Basic Premise Behind Blue Ocean Strategy

Blue Ocean Strategy is about:


Pushing
g for a quantum
q
leap
p in buyer
y value

While:
Pushing for a sharp drop in the
industrys cost structure.

Copyright 2010 Blue Ocean Strategy Network

The Blue Ocean Strategy Concept


The Simultaneous Pursuit of Radically Superior Value and Low Cost

What elements should


be eliminated that our
industry takes for
granted?

Costs

What elements should


be reduced well below
the industry standard?

What elements should


be raised well above the
industry standard?

What elements should


be created that the
industry has never
offered?
ff
d?

Copyright 2010 Blue Ocean Strategy Network

Blue
Bl
Ocean
Strategy

Cost savings from


eliminating & reducing

Cost advantages from


high volume

Superior value by raising


& creating

Buyer value

Substantially Higher Returns from


Investments in Blue Oceans

Business Launch

Revenue Impact

Profit Impact
Red Oceans
Market-Competing Business Launches

Copyright 2010 Blue Ocean Strategy Network

Blue Oceans
Market-Creating Business Launches

Beyond Products
Ten Focal Areas for Innovation
1. Business model
how your enterprise makes money

5. Product/Service performance
what you sell and how it performs
6 Product system
6.
how you add value beyond standalone products

2 Networking
2.
what external partnerships you
establish

7. Service
how you service your customers and
citizens

Finance

Process

Offering

Business
model

Enabling
process

Product
performance

Networking

Core
process

3 Enabling process
3.
how you support your core
processes and workers

Delivery
Product
system

Channel

Service

Brand

Customer
experience

8. Channel
what channels you use to interact
with your customers
9. Brand
what your brand signifies or promises
t your customers
to
t

4 Core process
4.
fundamental processes that add value to
your offerings (e.g., manufacturing)
10.

Customer experience
how you create an overall
experience for customers

Source: 1/28/09 Web Lecture by Derrick Palmer of Intervista. A framework for strategic innovation

Big S
S Strategy
[ tilit price]
[utility
i ] Value
V l IInnovation
ti
Marketing strategy
[price cost] Cost Innovation
Operational strategy
[strategy implementation] Organizational Innovation
HR strategy
gy
Blue Ocean Strategy requires alignment between all three

Copyright 2010 Blue Ocean Strategy Network

Red Ocean Versus Blue Ocean Strategy


R dO
Red
Ocean St
Strategy
t

Bl O
Blue
Ocean St
Strategy
t

Compete in existing
g market space

Create uncontested market space


p

Beat the competition

Make the competition irrelevant

Exploit existing demand

Create and capture new demand

Make the value-cost trade-off

Break the value-cost trade-off

Copyright 2010 Blue Ocean Strategy Network

Cirque du Soleil: Rebirth of the Circus

Copyright 2010 Blue Ocean Strategy Network

Annual Revenues:
Feld Entertainment vs. Cirque du Soleil
Cirque du Soleil
Feld Entertainment

700
600
500
400
300
200
100
0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Copyright 2010 Blue Ocean Strategy Network

Value Curve for Cirque du Soleil

Copyright 2010 Blue Ocean Strategy Network

Value Curve for Opera or Theater

Copyright 2010 Blue Ocean Strategy Network

Learning
from the Cirque du Soleil Experience
Management is often too focused
on Industry Perceptions and
C
Competition,
titi
rather
th th
than on th
the
exploration of customer [utility]
value.
Escaping this logic is mostly
against the rules of core business
and competence.
Insisting on the conventional
beliefs handicaps the design of
compelling value(s).

Copyright 2010 Blue Ocean Strategy Network

Todays
oday s Challenges
C a e ges
Consolidation of customers
Economy
(inc. transportation)
Cost of show services (inc
Travel and rooming costs
Time commitment or staff required
g wired workers
Young

Potential
ote t a Value
a ue Elements
e e ts
Potential Value Elements:
Exhibitor
See existing suppliers/customers
x
See new suppliers/customers
x
See full product lines
Compare products side by side
Talk to somebody like me/not a competitor
x
"Be seen" - networking
x
Education & offsite events
party/location
y
Fun: p
Metrics/ROI
x
Cost structure
x
Easy: vendor packages
x
Ability to control/influence show
x
Lives: repackage material
x
Time commitment
x
Partners/co-located events (annual meetings)
x
Extras: RFID tracking
x
Extras: VIP lounges or processes
Showcase industry for wall street or white house
x
Promotion for show
x
Show's track record (with your target audience)
x
Know who is coming
x
Market leading show
x
What the show supports (goes back into association/industry)
x
Help with maximizing show (increase ROI)
x
Opportunities for lead retrieval
x
Sponsorship opportunities
x
Fresh content or format
x
Ability to connect buyer/seller pre& post show
x

Attendee
x
x
x
x
x
x
x
x

x
x
x
x

x
x
x
x

x
x

Alternatives & Options


for Exhibitors and Attendees
Do nothing
Traditional marketing
Online advertising/social media
Visit customers
Regional shows
Corporate events
International events
Virtual shows
Competitive shows

Value
a ue Cu
Curves
es for
o Alternatives
te at es

Introduction
t oduct o to S
Six Paths
at s Analysis
a ys s
Across
F
Functional
ti
l or
Emotional
Appeal

Across
Substitute
Industries

Across
A
Chain of
Buyers

Past
Supply

Across
Strategic
G
Groups

Demand
Future

Across
Time
& Trends

Copyright 2010 Blue Ocean Strategy Network

Across
Complementary
Offerings

Where Did The Value Curve for


Quicken Come From?

Relattive Offerin
ng Level

High

Personal Financial
Software

Intuits
Quicken

Low

The Pencil
Price

Ease
of Use

Optional
Features

Speed
of Handling

Key elements of product, service, and delivery

Copyright 2010 Blue Ocean Strategy Network

Accuracy
of Handling

Re
elative Offe
ering Level

Where Did the Value Curve of


Formule 1 Come From?

2 Star

1 Star

F1

Key elements of product, service, and delivery

Copyright 2010 Blue Ocean Strategy Network

Rela
ative Offe
ering Lev
vel

Where Did the Bloomberg Value


Curve Come From?

Bloombergs
Value Curve

Price

Coverage of Coverage of
Price Quotes News

Terminal
On-line Historical
Ease-of-use Analytics Price Data

Key elements of product


product, service
service, and delivery

Copyright 2010 Blue Ocean Strategy Network

Lifestyle
Information

Relativ
ve Offerin
ng Level

Where Did the Barnes & Noble


Value Curve Come From?

Barnes and
Noble
Price

Knowledgeable
Staff

Selection of Store Ambience


Books

Store Hours

Key elements of product, service, and delivery

Copyright 2010 Blue Ocean Strategy Network

Caf and Lounge


Area

Relattive Offerring Levell

Where Did the Value Curve For the


Original Body Shop Come From?

Key elements of product, service, and delivery

Copyright 2010 Blue Ocean Strategy Network

Where Did the Value Curve For


Southwest Airlines Come From?
High

Re
elative Offe
ering Levell

Traditional airline,
e.g. United

Southwest
Airlines

Low
Price

Ability to
choose class
of service

Quality of
food

Picks up and
delivers
passengers
close to their
point of
origin or
destination

Guaranteed
reservations and
seats

Ability to
cover long
distances

Quality of
frequent
flier
programs

Key Elements of Product, Service and Delivery


Copyright 2010 Blue Ocean Strategy Network

Quality of
in-flight
service, Fun

Luggage
handling

Reliability,
On-time
arrivals

Pursuing Blue Ocean Strategy:


The Six Paths Framework
The strategic Six Paths Framework
provides a structured process for
finding new value curves.

Across
Substitute
Industries

Eliminate

Across
Strategic
Groups

Across
Functional or
Emotional
Appeal

New
Value
Curve

Raise
Across
Time
& Trends

Copyright 2010 Blue Ocean Strategy Network

Across
Chain of
Buyers

Reduce

Create

Across
Complementary
Offerings

Who
o Can
Ca You
ou Learn
ea From?
o
Business Type

Elements to Emulate

TV Music,
TV,
M sic or Movie
Mo ie B
Business
siness

Prod ce once,
Produce
once distrib
distribute
te all year
ear

Concierge or Personal Shopper

Connect in the right way

Retail

Present well and encourage


impulse purchase

Digital & Online Marketers

Grab marketing spend from print

Show Industry in Asia & Europe

Turn key solutions for exhibitors

Casino

Whales

Value
a ue Elements
e e ts from
o TV & Movies
o es
Produce Once, Distribute Forever
Multiple formats (live, DVD, hulu,
hulu, on demand, re
re--runs, etc.)
Comfortable & familiar format (know what will happen when you
turn the TV on)
Always on (can usually find your show)
Emotional attachment to content (my show)
License content/characters (product endorsements, spinspin-offs,
etc.)
Engage me: Books, mugs, fan sites, events
Social media strategy (House MD quiz on Facebook
Facebook))

Value
a ue Elements
e e ts from
o Concierge
Co c e ge
Connecting in the Right Way
Free (comes with standard hotel amenities)
Easy to find (right by the door)
Can pull strings/gain access
Makes me feel important
y
it happen
pp
Make it easy/makes
Knows inside scoop (education)

Value
a ue Elements
e e ts from
o Retail
eta
Present Well and Encourage Impulse Purchase
Fresh and inviting (clean, bright, etc.)
Can find what I need
Promotions & sales
Salespeople (or someone to help me)
y
((destination departments
p
make yyou
Layout
walk though other categories first)

Value
a ue Elements
e e ts from
o Digital
g ta Media
ed a
Grabbed Marketing Spend from Print
Customizable/Personalization
Fresh & changes often
On demand (can access wherever/whenever)
Easy to share
g, etc.))
Interactive ((comment on blog,
Less costly infrastructure (no printing press,
no paper
paper, no distribution network
network, no
transportation costs, etc.)

Value
a ue Elements
e e ts from
o Netflix
et
Sophisticated Content Delivery
Suggestion engine
On demand content (download movies)
Physical content ((dvd
dvd in mail)
Easy (comes with prepaid envelope to return)
p p like me))
Reviews ((hear from people

Example:
ed a
g tthe
e Value
a ue Cu
Curve
e
Redrawing

This could be
an online hub
that combines
the best
content and
elements from
all industry
shows, and
makes
available to
attendees
based on their
preferences.

For Additional Information


please get in touch with my colleague
Jacqueline Claudia
Decision Strategies International
267--972
267
972--2715
claudia@thinkdsi.com
l di @thi kd i
www.thinkdsi.com