Blue Ocean Strategy

Long time, no blog. There’s been a lot on the go!

Thursday was spent finalizing the revised offering, and Friday was spent talking to investors. Both days were quite fruitful.

As we’re now moving towards offers to lease, I spent most of Saturday considering site selection. I used an online mapping tool to determine the distance (in both kms and time to travel) from each postal code (in Kitchener, Waterloo, Cambridge and Guelph) to each of the sites we are considering. I then used the Canada Post database to determine the number of households in each postal code, thus providing a weighting to the averages. This data, and analysis, will feed into site selection decisions.

I read Blue Ocean Strategy over the weekend. It’s a great book with a great message. Basically, don’t compete with your competition (within the red ocean). Make them irrelevant by creating an entirely new market space (i.e. a blue ocean).

In the indoor golf experience industry, our competitors tend to compete on things like technology (golf simulators); how life-like or golf-like the experience is; price; service; and ambiance (how nice the facility is). Blue Ocean Strategy suggests that the first step is to clearly understand the few factors that our competitors compete over. Then determine which of these can be eliminated, which are irrelevant to our new market. We will also add new factors that our competitors are not focusing on.

When competing in the red ocean, all competitors are moving the same levers, adjusting the same factors. They can reduce some of their cost structure factors, and be more competitive on price. Or, they can increase price and be more competitive on some of the other factors (which means increased cost structure).

In the blue ocean, you reduce your cost structure by eliminating some of the factors (that are not relevant in your new market), and thus eliminating some costs. You then introduce new factors (or services, or features) that appeal to your new market. Overall, your cost structure remains the same, but you are in a new completely uncontested market space.

Clearly there is far more between the covers of this thought-provoker than I can summarize here. I highly recommend this book!

I now have much more work to do, to ensure that Parmasters Waterloo Region swims in vast, calm, uncontested waters.