One of my favourite and heavily referenced textbooks is ‘Blue Ocean Strategy’ by W Chan Kim and Renee Mauborgne. The sub text of the title page is ‘How to create uncontested market space and make the competition irrelevant.’ How could any self-respecting brand owner ignore that proposition?
The big idea in the book is that most companies compete in the Red Ocean. The Red Ocean is a crowded market with known, established variables or norms. Those competing in the red ocean all work ferociously to find ways to win the battle by competing on the same range of variables. The Red Ocean is red because it is bloody. It is possible to win in the Red Ocean but margins are squeezed as costs are higher.
When companies compete in the blue ocean they in effect they step out of the ‘norms’ of their sector and create something new and unique that can’t be compared with others. Centre Parcs did it with short breaks and Cirque Du Soleil did it with circuses.
The beauty of the Blue Ocean book is that as well as explaining the concept it outlines a few practical tools to help you create your own blue ocean offering. In short it encourages us map out the norms of your industry and ask three questions of them;
What do others do that we will do (significantly) better?
What will we do that others don’t do?
What are the norms that we will choose not to do?
This methodology was on my mind recently as for both business and leisure I have made a number of journeys on a few different airlines. The lack of a blue ocean brand is noticeable.
Armed with my well-worn copy of blue ocean strategy I tried to analyse why this was.
I concluded that all the different airlines are focused only on question 1 and even then not particularly concerned with being significantly better. Price, ticketing, food, seat options, luggage limits, punctuality stats and loyalty schemes are all norms for the industry and the factors on which they all compete.
It appears that whist an airline might attempt to offer any of the above features to a superior level, the actual difference is marginal. I might get a larger luggage allowance but the coffee isn’t quite as good. This is not a formula for building an experience that makes the competition irrelevant.
It could be argued that easyJet were, in the day, a blue ocean offer. Significantly cheaper, no pre booked seats and a completely different approach to inflight catering. However, that model has now been copied and duplicated across the world to the point that no brand really stands out. Even Ryanair is claiming that their single-minded approach to low fares is being adjusted to reflect levels of service that mirrors other low cost operators.
Perhaps now is the time for an airline to work through a process to develop a true blue ocean proposition. It will demand bravery and deep insight around consumer needs, a differentiating brand position and a customer experience that genuinely challenges the norms of the industry.
I am not an airline expert and I am sure this is no easy task but the one thing we do know about all blue ocean brands is that they attract fierce consumer loyalty, positive word of mouth and premium prices.
That has to be difficult to ignore.