One could argue that Microsoft uses a similar strategy. They try to get into everything in the hopes of making something stick. Let me give you a recent example. They make a great mid-tier database product (SQL Server) and they own the desktop office marketplace (MS Access). Well they want to compete with Oracle, and have take some steps in SQL Server to do that (partitioning for example) but they lack a good Business Intelligence product. Their answer was this garbage called SQL Server Reporting Services. It is not bad for small little reporting systems, but if you try to tie it into a data warehouse it completely chokes. They were trying to compete with the likes of Business Objects, Cognos and SAS but really failed on execution. That whole industry is pretty cut throat, and with IBM buying Cognos and BO buying Crystal, you see a trend of consolidation. In short, they tried to dive into the Red Ocean and were eaten by the sharks.

I will go back to my original observations. They do Office really well. If they want to differentiate themselves, then produce enhancements to that product line.

Apple has it’s own problems with this type of strategy. Yes they have done very well, and they continue to see market share and stock price increases, but how much of this company is tied to Jobs? When he is unable to continue to move it forward, they do not have the energetic leader to step into those shoes. Microsoft has that whack-job Balmer, and under him there are a number of competent leaders. Microsoft is also not as closely tied with Gates that his departure would result in a significant loss for the company. They continue to have the high prices, people are losing their jobs at a record pace, and nobody will have the money to buy the product. This is why the cheaper netbook options are very popular. When you only need to update Facebook and post to Nick’s blog, the netbook seems like an extremely tempting proposition.

One final parting shot. I can argue that Lenovo strikes the balance between these two strategies. They focus on a core set of products, and make them technically solid. Instead of trying to be a Wal-Mart, they try to sell a few really good models. Their prices are slightly more then the netbooks, but they are not as high as Apple. As a result, they are striking a good balance between price and functionality. They are also not tied to an individual leader, as some of these other organizations are. Perhaps they are better suited for the long-term?

I’d rather pay more for great service, but then again that just makes me service oriented which is outside the market niche they fill which is “cost/value conscious” customers.

If you’ve looked at Apple’s market cap I don’t think there’s a lot to argue with on the strategy of moving the masses to higher end products. In a time where the PC market is being consumed by netbooks Apple has managed to weather the price-conscious storm and has even been gaining market share.

Price breaks are wonderful things to include in a value strategy. Think of Wal-Mart. They have made a very successful business model undercutting the competition. PRICE is what makes them, because many would agree their products can be very low quality.

I agree we could conceivably consider the price cut as a blue ocean strategy but I’ve always been loath to consider price cuts an effective value strategy (but thats more of a personal bias than anything else).

These could just be coincidences or us reading in this is true but that doesn’t change the value of the example. If someone inadvertently finds a Blue Ocean space we should analyze that because even if it was just right place right time we can still learn from understanding how they deviated and the success it caused.

I’ll fill you in sometime on my own wine blue ocean strategy which unfortunately I haven’t had a chance to get off the ground yet.

Using these toolkits, Subway is the only one offering the five dollar pricing and the healthy alternative. Viewed as individual events, they would not be a strong case for blue ocean but viewed together as a much larger strategy, one could argue that they are.

Take another section of the book. They discussed the six utility levers (pg 123) that are involved in the customer buying experience and the role of execution (pg. 174). Without direct insight into the internal strategy sessions of Subway it is only speculation; however, it appears that they were intentional in these areas as well. Timing the price cuts for a time when the recession was hitting people was excellent. Also, it appears they have an intentional plan in place for the customer buying experience. Again, well done!

The biggest criticism is that few companies have adopted this strategy formally. We may be simply reading in this idea into a situation where it does not exist. The fact that Subway made the rest of the market respond to these two items seems to lend credibility to the idea that it was blue ocean strategy. Without the internal knowledge of operations at Subway, it would be impossible to confirm.

Another interesting I don’t really want to call it Blue Ocean but a strategy Subway pulled out that has again moved the entire market was the $5 footlong meal.

This has caused a movement towards a $5 value menu across many competitors including Quiznos, KFC, and others.

More please on this topic….

I firmly believe a blue ocean strategy isn’t just building a new product its also in positioning a product to meet the needs of an ignored audience. When Subway started there was no such thing as “health fastfood” that then is a Blue Ocean Strategy.

Then when everyone was rushing to create a healthy food menu at their burger joint Burger King said screw it lets double down on unhealthy and target men. I would argue Burger King has done a wonderful job of distancing themselves and adding products that speak to men such as the Angry Burger.

Maybe we’ll agree to disagree.

Ah you read the swan-song for Steve Jobs tablet piece on CNN? Was an interesting article sounds just like your comments.

As far as the big ass magic table “Surface” the problem is cost with that piece of hardware. Interestingly enough they were everywhere in the Vegas bars, but yeah interesting concept need to get the price down to a level where you could see it go mainstream.