Home' Trinidad and Tobago Guardian : July 27th 2017 Contents JULY 27 • 2017 guardian.co.tt BUSINESS GUARDIAN
ENTREPRENOMICS | BG15
Your blue food ocean strategy
One of the most influential
management theories today
is the blue ocean strategy. It
was developed by W Chan
Kim and Renee Mauborgne
and they wrote the book ti-
tled, Blue Ocean Strategy: How to create un-
contested market space and how to make the
competition irrelevant. Their work essentially
turn strategy upside down. Maybe your enter-
prise can benefit from a different perspective
on how new markets and opportunities can
One of the leading management gurus is
Michael E Porter of Harvard Business School
who posits that for companies to have a com-
petitive advantage, they can accomplish that
by either one of two ways: lower their costs
(and so have a cost advantage) or differentiate
(be better on style, quality, etc).
Porter makes it clear that companies cannot
do both. Bic pens can offer lower prices because
of a lower cost structure but cannot differ-
entiate because it would make it expensive.
Cross pens can offer a differentiated offer-
ing; fine writing instruments which do the
same writing job as Bic but with the status
and snob appeal.
Blue and red oceans
Blue ocean strategy offers a different per-
spective. In current markets, companies com-
pete in what are called red oceans. The action
takes place within existing industry structures,
the focus is how to beat your competitors and
exploit your existing demand.
The result is a bloody war between com-
petitors, as all players are fighting for market
share. Porter's Five Forces Model works well
here in determining industry attractiveness.
However, the blue ocean deals with un-
known markets. This is where, frequently
entrepreneurial firms create demand, either
by pushing industry boundaries or creating
new industries. Amazon.com created online
retailing in a big way.
But frequently the industry boundary line
is expanded. An example would be Southwest
They did not create the airline industry,
but they mastered operational efficiency
better than all. They use one type of plane,
the Boeing 737, which makes maintenance and
pilot training easy. They also operated far from
busy city airports-making schedules more fre-
quent and tickets cheaper. People who once
took the train or bus now could afford to fly
Southwest. They expanded demand by con-
verting non-customers to customers. They,
in effect, disrupted the airline industry and
became a dominant force.
Cirque du Soleil
The authors point out that while the blue
ocean strategy is not a new one, blue oceans
can be created without the use of technology.
Southwest was certainly not using supersonic
Another example is Cirque du Soleil (Circus
of the Sun). This circus based in Montreal, was
using a new strategy not based on delivering
value or cost but value and cost.
The circus industry was not an attractive
one, as anyone doing a Five Forces Model would
reveal. The two main players Ringling Bros and
Barnum & Bailey were the dominant players.
Entering a market with two well-known brands
and with declining overall demand, is one
sure way to spill more blood in a red ocean.
But Cirque du Soleil had a different approach.
Value and cost
Cirque recognised that the circus had three
main success factors: clowns, the tents and
the acrobats. They enhanced the tents (which
the two players had neglected), removed the
slapstick humour of the clowns and introduced
more artistic acrobats. So, in effect, they raised
the bar for these elements.
But that was not all, Cirque attacked six ar-
eas of costs. The three rings concept of having
multiple shows simultaneously was eliminated,
and so was star performers and animals. The
last one also dealt with the animal activists
concerns who cared about cruelty to tigers
They also went further and reduced the hu-
mour and danger.
The overall impact was a lower cost at the
same time increasing the value, but there was
more to it than that.
Cirque introduced more theatre into the
acts further increasing the value by adding
story lines and original music, not the norm
of drum-rolling for the traditional circus.
Now this is counter to what Porter's theory
of competitive strategy preaches. Porter says
you cannot increase the value (differentiation)
and lower cost at the same time. Differentiation
means more cost and that seems logical but
Cirque and Southwest have done it and have
performed quite well.
Recently, their main competitor---Ringling
Bros---who labelled their travelling circus as
The Greatest Show on Earth, and about 100
years in the business, closed its great show for
good. Porter could not help them.
I would like to turn to an industry that like
the circus business, is declining and so for over
30 years. Trinidad like most Caribbean coun-
tries, is not self-sufficient in food.
There are many factors for this-Dutch dis-
ease (energy sector attracting resources from
other sectors), the hard and poor image of ag-
ricultural work, high risks and low returns of
the business (floods, water shortage, thief),
among others. The sector also has had to deal
with some new issues-climate change and or-
What can the blue ocean strategy teach us
about dealing with a similar decline as the
If I were a farmer I would look at some of
the high cost issues: high cost of land, poor
infrastructure and larceny. How can I reduce
One of the many ways is to think about a
more controlled environment.
Artesian Farms of Detroit have a hydroponic
operation (plants grow in soil solution) in the
city centre and to maximise space, plants are
stacked 14 feet high.
Another innovator, Green Collar Farms uses
an aeroponics system and it sprays a mist of
water and chemicals on the plant roots, all in
abandoned real estate (Detroit is a declining
city, like our main city).
Ron Reynolds, one of the owners of Green
Collar, quoted in the Detroit Free Press, "It
doesn't necessarily take a huge building. You
don't have to go to the city and say, 'I'd like
that 50,000-square-foot building'"
Further, Jeff Adams of Artesian, comments
in the same publication, "I was looking for en-
trepreneurial opportunities that could employ
neighbourhood people, the whole urban garden
thing really peaked my interest."
Well, think about what this innovative way
can do for all the empty or underutilised build-
ings and the impact on our Port-of-Spain slum
Image our city can now produce food and
reduce poverty at the same time. Blue food
will mean something different---lower cost and
maybe we can grow high-priced kale, arugula
and buttercrunch lettuce at the same time.
Notice that this is not high technology, but
requires more of a mindset change, one that is
more entrepreneurial in thought and action.
The blue ocean might have some big fish in
it for us.
Sajjad Hamid is an SME & family business
adviser. His contacts are: entrepreneurtnt@
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