The Blue Ocean Strategy
My second week as an intern at the Startup Lab was an enlightening experience, we had a guest speaker, Larry Cecchini, the President and CEO of Secure Designs,and he promoted the Blue Ocean Strategy (read more about it at BlueOceanStrategy.com), to the businesses in the Business Accelerator Program which touched on value innovation and lasting profit.
Lasting Profit and Value Innovation
During his pitch he focused on Value Innovation and how to create a leap in value for both the company and buyers leading to lasting profit. The biggest question he posed was, “How does a business create value innovations?” You create them with cost saving by reducing the factors an industry competes on and the buyer’s value is lifted by creating products the industry has not offered. He said over time the costs will reduce even further if there are high sales, and thus creates more profit. The high sales are generated by the superior value you offer. Lasting profit is achieved when the product’s utility, price, and cost are aligned. When I think of value innovation, I think of Southwest Airlines’ Free Checked Bags Policy. Every time you fly, you get two checked bags for free. Southwest is a value innovator because no other Airlines has that incentive to fly with them by offering this. Yes, Southwest might lose money not collecting the baggage fees, but they are gaining customers because of the incentive; therefore in the long run their value and profit outweighs their baggage prices and cost. Some people fly on Southwest because of the single fact they do not have to pay for bags. They are against the norm in their industry.
What Makes You Different
As a business you want to be the trendsetters and the one who is different. What makes you different could be your value innovation. In every industry, there are those people who are willing to take small risks to set themselves apart from the competition. A key to the Blue Ocean Strategy is “making the competitors irrelevant.” In order to make them irrelevant, one of the key steps is having value innovations.
Being of Great Value to an Employer
Even though I am not an entrepreneur myself, everyday I am competing against other people in the job market. And everyday I ask myself, “what am I bringing to the table and how can I be of lasting profit to my employer?” I take the concept of value innovation and apply it to myself because I want to bring maximum value at reasonable cost to the employer. I am interning at the Startup Lab because it allows me to work with a diverse community and gain experience I cannot find anywhere else. At the Startup lab, we get to work with businesses, network, listen to guest speakers, and develop as young, business-minded people. This experience is adding to my overall value because I can take what I learned here and apply that to my current and future opportunities.