Find Your Blue Ocean
KamalSinclair | Oct 30, 2008 12:05 pm
There are three basic phases to the strategic planning process.
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First, you have to determine your identity and clarify your creative offering, as discussed in a
previous post, “Professional Identity: Who Are You? And What Do You Do?”
Next, it’s wise to assess your environment: What is the state of your industry? What are the
characteristics of your market? What are your peers doing? What opportunities and challenges
exist? What are complementing factors (e.g. restaurants and performance venues)? Where do
you exist in all of this?
Finally, you make a plan.
In general, people tend to skip the middle step, especially when pressed for time and resources.
However, doing an environmental analysis will give you the big picture map of your “world.” You can see
where you are on the map and make informed decisions about where you want to go. The “big picture”
can show you profitable under-served or un-served niche areas in your industry. If you aren’t afraid of
direct competition, you can learn how to attractively differentiate your offering from those already
occupying that space. Hopefully, you can even discover the coveted “Blue Ocean.”
What is a blue ocean?
In any industry you have competition, even in non-profit arts. We compete for “butts in seats,” for grant
money, for corporate sponsorships, for ad space, for the critics’ attention, for performance/gallery
space, for views on the Internet, etc. Mature industries (e.g. theatre) are called “Red Oceans,” meaning
the marketplace is so saturated with competition that it gets a little bloody.
As you have probably experienced, trying to grow an arts organization or develop an arts career in a red
ocean is tough. There is a fair amount of audience demand for arts and entertainment, but a surplus of
artists and arts organizations ready to fill that demand. In Harvard Business Review’s October 2004
issue, Prof. W. Chan Kim and Prof. Renée Mauborgne proposed using a blue ocean strategy: “developing
uncontested market space that makes the competition irrelevant.” In a blue ocean you create new
demand, rather than fight over it, which allows you to rapidly and profitably grow.
How do you create a blue ocean? Kim and Mauborgne outline two ways you can create a blue ocean:
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launch a new industry (e.g. eBay’s online auctions)
or expand the boundaries of your current industry (e.g. Cirque du Soleil in the circus industry).
Having an innovative idea strong enough to launch a new industry is rare, but expanding industry
boundaries is more common.
Kim and Mauborgne write about Guy Liliberte, a onetime accordion-player/stilt-walker/fire-eater who
started a circus when the industry was in major decline. Not only were children’s interests redirected to
the rapidly increasing availability of hi-tech gadgets (e.g. Playstation), but animal rights groups where
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discouraging circus attendance. Despite this unattractive environment, Laliberte grew Cirque Du Soleil
into the most successful circus in history with 40+ million audience members, multiple productions, over
90 global cities on its tour schedule, and unmatched revenue.
How did he do it?
“The only way to beat the competition is to stop trying to beat the competition.”
Traditional firms were fighting to capture the attention of children. Cirque created demand in a
demographic never targeted by circus organization in the past: “adults and corporate clients prepared to
pay a price that is several times as expensive as traditional circuses.” Additionally, traditional firms
exclusively focused on entertaining elements such as pageantry, showmanship, tricks, slapstick, and
wow factors. Although Cirque embraced all these elements, they added an overall high art aesthetics
that engaged their target market.
Also, Cirque eliminated costs as Gabor George Burt discusses on his blog:
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Traditional firms paid premium compensation to “stars” that did not really have the star power
to draw audiences. Cirque had no stars and saved on salary costs.
Traditional firms had animal shows. Not only was this very costly, but it was increasingly
politically incorrect. Cirque created an all human show.
Traditional firms had aisle concession sales, which were costly and didn’t add much value to the
audience’s experience. Cirque eliminated this practice.
Traditional firms had multiple show arenas, which were costly and somewhat distracting for
audience members. Cirque cut this as well.
Hopefully, this example has illustrated the importance of understanding your industry dynamics, finding
creative ways to navigate around threats, and taking advantage of opportunities.
Of course, we are all aware of the threats surfacing from the current economic crisis. However, I
encourage you to continue to find/create opportunity, because not everyone is experiencing bad times.
In fact, Rachel Abramowitz recently reported in the LA Times that bad economic times are good times
for the entertainment industry.
So find your blue ocean or niche or differentiation strategy and fulfill your goals!!!!!
For more detailed information on how to do an environmental analysis, feel free to contact me or stay
tuned for the launch of our new strategic planning courses at Fractured U.
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