- May 29, 2015
- Events & Posts
If you are going to build your next innovation strategy, you cannot do without stretching your mind, by looking across six paths. This will challenge your assumptions.
The first path is that of your product/service substitutes.
Ask yourself: “What customer need is my product/service covering? What alternatives from different industries are able to deliver the same value and satisfy the same customer need? Why sometimes customers prefer substitutes to our offering?”
Banks for example, have underestimated the dangerous nature of external players, such as Google, Paypal, Apple and so on. They believed to compete only within the banking industry, not considering the broader universe of on-line and mobile services.
The second path you should look across, relates to the existent strategic groups in your industry. You’ll easily identify them, since they’re usually differentiated according to price and performance.
Ask yourself: “What value are products/services from other strategic groups offering? What drives customers to switch from a group to another in their purchasing decisions?”
Nobody forbids you to create something appealing also for customers that “appearently” belong to other strategic groups. That’s what Ibis Hotel has made to disrupt budget hospitality industry in France. It has provided business travellers and families with upscale comfort services- such as self check-in, free wi-fi, beds comfort and silence- looking across strategies of 3 and 4 star-hotels, and simultaneously eliminating or reducing other factors to save money (e.g. restaurant, size of rooms etc.).
The third path that may expand your vision is the chain of buyers. You may reposition your offering by simply targeting another group within the chain, such as influencers or final users, who not always coincide with buyers and payers.
Ikea for example used children’s leverage on parents, when it decided to attract families in the US in 2012.
For this reason it powered entertainment, playground, and dedicated collections to make children happy inside the stores and positively influence their parents.
The fourth path to be considered refers to complementary products/services.
You should always ask yourself: “What’s before, during and after my product/service purchase?”. “Which other products and services are required to buy and use it?”
For example, working with a company that produces bath-furniture, we made an analysis of customer experience which permitted us to discover a number of complementary products and services that the company could leverage to provide a more complete and satisfying bathroom experience.
Another way through which you may create a Blue Ocean is by reversing the functional/emotional appeal of your product/service. Brands like Swatch and Nespresso have added fashion and emotion to their products in order to avoid competition on a functional level. On the contrary Mercedes has bet on extreme functionality when it launched its Smart for two.
The sixth path to look across is that about external trends over time, regarding technology, consumers habits, politics, environment etc. The key is to catch early signals of future trends that will impact our industry, and participate in shaping them. For example, all those companies that have understood late the importance of digitization are now struggling to survive.