Blue Ocean and Product Strategy: What is the Blue Ocean strategy

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Do you know the Blue Ocean strategy? It is a strategy proposed by W. Chan Kim and Renée Mauborgne, based on an analysis of the most successful strategies of the last fifteen years. This strategy is based on the “search for new unexplored strategic spaces”, called “Blue Ocean”, to differentiate it from the “Red Ocean”, which represents the competitive battle on existing markets.

This is the strategy I tried to apply when I launched Marjory, with Kamel Tansaout and Christophe Spoerry as my partners. I then went on to become Marjory’s Chief Product Officer.

While following the Ocean Blue strategy in  “search for new unexplored strategic spaces”, I acquired some convictions that I would like to share with you, as they help inspire my product vision every day.

Re-intermediation to enhance the value of the relationship

E-commerce has enabled brands to implement disintermediation models. By deploying online sales sites, these brands have been able to become players in their distribution and take control of part of the value chain of wholesalers, distributors and other retail players, which had previously escaped them. I won’t repeat the history and the digital issues associated with this approach, but just point out that it allows brands to have direct access to their customers and the associated knowledge (identity, profile, use of products and/or services, etc.).

But the expectations of the customers of these eCommerce sites are also changing. They are looking for an acceleration in transactions. In their purchasing process, selection is becoming a more important criterion than negotiation. What matters is to find the right product or service among the multitude able to meet their needs. Trust in the prescribers becomes a key issue for customers. In this context, brands must be able to highlight the value of this relationship. This is called re-intermediation. Where disintermediation sought to bypass intermediaries, re-intermediation enhances the value of the contact service by placing it at the heart of the value proposition and clarifying the scope of responsibility of all players.

Encouraging platform differentiation

In a world that is becoming a platform and multi-vendor, brands may feel that they are offering products and/or services that compete with those of other brands. This competition is not necessarily an issue as it is the core of the matchmaking value proposition described above.

But it is another form of competition that can become a real threat: that between platforms. First, platforms compete to find customers. Secondly, they compete to provide the best deals. Brands are then able to choose the platforms through which they wish to make themselves available to end customers. For the operators of these platforms, the challenge is to be able to propose a differentiating positioning, functionalities and services at the risk of not attracting the interest of brands and of disappearing.

Their differentiation is therefore becoming the key to success. And this is achieved in particular through the ability to easily add and integrate new services, in order to offer them to its customers.

Simplifying the integration of new services

It is vital for these platforms to be able to enrich their value proposition by adding new services. Whether it’s payment services, financing, logistics, identity verification (know your customer), or marketing, this integration does not simply mean connecting to the service provider’s API. The use of this service by the platform’s customers must be placed within a coherent user experience (UX). It is also necessary, especially in the B2B world, to take into account the specificities of the sector in which the Marketplace operates.

Despite all the efforts made by service providers to simplify their APIs and thus make the integration of their services more fluid, this integration requires a learning curve and the mobilisation of resources that have a direct impact on implementation times. In parallel, the integration of the service provider’s APIs must be done in a business execution context. For example, the implementation of a new financing service necessarily impacts the accounting and finance department. Therefore, the challenge of adding a service is not so much technical as the operator’s ability to implement it in a business execution context.

I quickly became convinced that it was necessary to create a new value proposition that would facilitate the integration of these services by taking better account of business processes, organizational constraints and implementation.

Bringing together the functional and the technical

In this logic, the aim was to find ways of bringing together the functional, the business and the technical. And new product approaches such as low code can help to accelerate this rapprochement, which is in line with the history of information systems. Let’s consider the business consultant and integrator professions that traditionally work on e-Commerce or Marketplace projects. I am convinced that these professions have begun, sometimes without knowing it, a phase of rapprochement.

Business consultants must become more and more involved in the technical side of things, especially when they are working on the integration of new services. They are asked to evaluate, quantify and anticipate the costs and methods of integrating these new services into the information system and the company’s organization. As for the integrators, they are seeking to constantly accelerate their customers’ deployment cycles to meet their agility requirements, but also to assess all the integration costs in order to de-risk them.

This convergence of struggles is also taking place around data, which is at the heart of the value creation of these platforms.

Only share data that is useful for the execution of processes

The value of a company depends very much on the execution of the processes that constitute it and its business. This is even more true for a Marketplace, where the perfect execution and scalability of processes is both an issue of profitability and viability.

This should lead us not to reverse the value of data. If data is at the heart of customer knowledge and the organization’s processes, which it enables to evolve, it is the organization and its processes that shape the data processed. The primary value of data is therefore to enable the optimisation and improvement of these processes.

It is on this approach that I wanted to capitalize when developing the Marjory product: to favor data integration by sharing data in an execution context. In the modeling implemented, each system is responsible for its data perimeter and referent on this data/attribute.

Marjory allows applications to be updated in the context of execution, not in a systematic way but in a contextual way, in connection with events whose listening allows the execution of the underlying processes to progress. Only data useful to the execution of the processes is thus shared and valued, thus helping to promote a “Lean” management mode.

These are some of the convictions born from the Blue Ocean’s “search for new unexplored strategic spaces”. They contribute to inspire my vision of Marjory as the best low-code solution for best-of-breed data integrations and workflow automation. And to forge a few convictions, including that centralisation into platforms is only a transitional stage towards a decentralization of the economy which will increasingly involve the setting up of interoperable and sustainable ecosystems, signs of greater resilience and cooperation. But this will no doubt be the subject of a new article.

Written by Frédéric CHOUDAT on Linkedin on 01/07/2020 and reproduced with his permission


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