Blue Ocean Strategy

Preamble

healthCare cybernetics was an early adopter and proponent of Blue Ocean Strategy.

Blue Ocean Strategy is all about creating uncontested market spaces – where competition is irrelevant.

Blue Ocean Strategy is based on the notion that market boundaries and industry structure are not ordained by any decree - and can thus be reconstructed by the actions and beliefs of industry players. This is what the authors of Blue Ocean Strategy” call the reconstructionist view.

On the other hand, Red Oceans represent the “conventional” notion of industries and markets.

In the red oceans, industry boundaries are defined and accepted (as the “norm”).

At the same time, in red markets, the competitive rules of the game are known – and - for the most part – adhered to.

In Red Oceans, industry players aim to outperform their peers / rivals – so as to secure a larger share of the “existing demand”.

In the process, market space becomes crowded – and prospects for profits and growth are reduced.

In the case of Health Tourism, services become commodities - and cutthroat competition turns the ocean bloody (and hence the reference to red oceans).

Strategy Canvas

Strategy Canvases (as explained in the “Blue Ocean Strategy” book) is an analytical tool which provides a simple way of visualizing how competitors attract customers, and / or how your customers choose the service they buy in your category.

This allows industry players to differentiate themselves by choosing a different combination of factors on which to compete.

The two ways to creating Blue Oceans

The Reconstructionist approach

One way to create a Blue Ocean is by reshaping Market Boundaries and Industry Structure - the reconstructionist approach.

The Strategy Canvas approach

The other way (using the Strategy Canvas approach) is to analyze how competitors attract customers, and / or how your customers choose the service they buy in your category and differentiate yourself by choosing a different combination of factors (or service offerings) on which to compete.


From a Commodity to a Cachet

 ...to render competition irrelevant

For those with a deep understanding of their sector, the Strategy Canvas (as explained in the “Blue Ocean Strategy” book) provides a way of visualizing how competing industry players attract – or aim to attract - customers, and / or how targeted potential customers choose the services they buy in the category of interest.

Provided with this knowledge and insight, industry players can “attractively” differentiate themselves through a “bespoke” combination of factors on which to base services development, promotion and delivery.

In the case of Health-related Services Providers (providing services in the context of ht8 and the Boutique or Lux “class”) it is primarily a matter of ensuring that the offered services have been elevated from a “commodity” into a “cachet”.

In the context of services, Commodities are those offered by different services providers – but between which there is very little (if any) differentiation (sugar is sugar). In the context of services, a Cachet is one in which carries great prestige, as a consequence of its differentiation, quality, features and characteristics.

Reshaping the Market Boundaries and Industry Structure

...to create an uncontested Market Space

Early on, it was realized that practically everyone was fixated and focused on "competition watching and beating" – and competing in the same “cut-throat” Red Ocean (which, as Eric Schmidt and Jonathan Rosenberg write in the book “How Google Works”, leads to a spiral of mediocrity and never delivers anything truly innovative).

This is why practically all long-term faith and effort was devoted to making competition irrelevant (by reshaping the Market Boundaries and Industry Structure).

It is an established fact that leading industry players can reshape Market Boundaries and Industry Structure, and in the process create an uncontested market space (known as a Blue Ocean) and make the competition irrelevant.

This, in the case of healthCare cybernetics, involved the introduction of Permissionless and Combinational Innovations.