Blue Ocean Strategy – a new approach to strategy and an opportunity for fundraisers?
On August 20, 2015 At 2:00 pm
Responses : 7 Comments
Blue ocean strategy is an alternative way of approaching strategy that’s about creating new markets (a blue ocean) instead of competing in existing markets (a red ocean). This distinction is of fundamental importance to fundraisers for two compelling reasons: first ‘me too’ competition is a key concern in almost every strategic analysis of the external environment; and second in many mature markets if giving is growing, it’s only growing slowly.
If fundraisers can genuinely create new markets or develop category breaking offerings, our ability to build support to help solve the world’s most pressing problems – climate change, poverty, diabetes and dementia – grows. And that’s got to be worth exploring.
So how do you go about creating a new market or rolling out a new category of offering? You start by doing something that seems almost anathema to fundraisers obsessed with brand and positioning. At the heart of blue ocean strategy is the idea that you need to make the competition irrelevant. And to achieve that you need to create a leap in value for the consumer/donor and, at the same time, reduce costs.
One of the most well known examples of a blue ocean strategy is Nintendo Wii. Compared with it’s ‘competitors’ at the time of launch – Xbox and PlayStation – Wii was a technically inferior product. Put simply it has less bells and whistles – and so costs less to make. But Nintendo introduced a leap in value for consumers that transformed its fortunes. Nintendo created the motion controller and games and activities that transformed ‘gaming’ from shooting games for teenage boys to fun activities for the whole family. And there’s the key – the ‘everyone’ market is significantly bigger than the teenage boys audience. Nintendo’s flash of genius was to realise it could change the market.
The second key idea of blue ocean strategy is that to succeed you need to focus less on customers, more on non-customers or potential new customers. You need to focus on the similarities between customers and non-customers to pull them into a new market.
So in the case of Wii, it was about creating social ‘games’ – like sports and dance – that people of all ages could play together through simple, interactive technology. Taken together that consumer value, the reduced cost product and the ‘everyone’ market added up to success.
Successful blue oceans pull in large volumes of non-customers. Maybe the challenge for fundraisers is to think about how to become the Wii of the gaming world? Not easily done, but potentially could attract many more donors and supporters that would grow the market and help fundraisers avoid overfishing in the current pond.
What would this mean in fundraising terms? A men’s campaign to beat breast cancer, a legacy proposition for young people? One favourite example of ours is a university fundraising campaign that didn’t approach alumni – the case of Oxford’s Campaign.
I’m not suggesting you abandon your current donors. Blue ocean and red ocean strategies are not alternatives. You have to be good at both creating new markets and competing in existing markets, not least because blue oceans eventually become red oceans.
For me, the question is to what extent can we expand beyond current donors and supporters to inspire those who currently reject or ignore us to encourage them to engage and support. The problems we exist to solve are vast and urgent – we have to at least try to tackle this question.
If you want to find out more about blue ocean strategy, please click here. You can also find out more by joining Bernard Ross and Paula Guillet de Monthoux at their masterclass ‘The Strategy Lab: building new business models’ at the IFC in Holland 20-23 October 2015 where you will explore if a radical blue ocean approach might be right for you, your organisation and your cause.
This post is part of the 2015 IFC Series. 101fundraising is proud to be the blog partner of the International Fundraising Congress for the 4th year!
Red Ocean Blue Ocean is one of =mc’s Big Ideas in Fundraising series – a collection of free strategic tools and models to help you form a systematic approach to your fundraising. Click here to view all the Big Ideas.