Why do we think we have adopted a Blu Ocean Strategy?
I think I don’t tell anything new to those who have an economic background or are simply passionate about business strategy, if I connect to the Blue Ocean Strategy, referring to what was published in 2005 by W.Chan Kim and Renèe Mauborgne, professors and co-directors of INSEAD, to describe some strategic choices that we have adopted for some time now, but that with our recent moves are reaching the climax.
The two authors worked on the analysis of the common characteristics found in a sample of about one hundred and fifty companies, which for more or less long periods and in different circumstances, have operated in market sectors without competition, concluding with a causal analysis of the level of performance, which indicates that to give life to a “Blue Ocean Strategy” is a strategic move linked to the creation of products and services that lead the company to operate in a new market.
Hence the difference from the so-called “Red Ocean” in which most companies navigate, those with defined borders and recognized by all, those populated by many competitors who seek to improve their performance by eroding market shares to others.
I think I know well what it is, having lived actively and in different roles in the Land Surveying Industry for over thirty years; a typical “red ocean” with some aggravating circumstance. When I started to deal with this niche market, there were seven competitors (then the brands were not multiplying like the loaves and the fish) and each one had differentiating features. It was normal to operate in a highly competitive environment since the number of players was still high compared to the market size, but there was no oversize of the offer as the current one.
Today, because of the market entry of new Asian players and the “multi-brand” strategy of traditional leading companies, which seek to defend and occupy market segments that could be conquered by new “low cost” competitors, the supply of similar products (often differentiated only by color and by minimal details) has increased exponentially.
The increase of an always greater and uniform offer sees more and more actors to compete in the waters of the “Red Ocean” of the Surveying Industry, trying to occupy a higher quota of a pre-existing market demand, taking competitors as benchmarks and trying to prevail over them.
Operating a “Blue Ocean Strategy” instead means creating a new market space in which there is no competition, enjoying the advantages typical of the “first mover” and the conquest of competitive advantages not easy to reach by other players in the field, increasing long-term profitability.
Of course, all this involves communication and economic efforts that not all companies are able to sustain and involves risks, if the product or service is not perceived and accepted by the market or if the expectations created in customers are not met.
However, it is an approach and a risk that I feel I can face more willingly and more naturally, compared to sailing in waters already too populated where prices determine one of the main discriminators with which to influence the users’ choices.
I am particularly proud and happy with the innovative choices I made in 2018, expanding my company’s operations from traditional Land Surveying, with the introduction of what I consider to be the “flagship” of fixed-wing drones, the only one able to fly 90′ with standards of quality and safety still unmatched today and the only one to date to have obtained marking and certifications, which allow him to fly practically in any scenario, where the value created by mapping and surveying is extremely high. It’s thanks to this strategy that I’ve gradually started to escape from a competitive market to one where I’m practically an exclusive player at the national level.
The same level of satisfaction derives from what I managed to develop four years later in the field of drones LiDAR systems introducing YellowScan in Italy, in the market segment that I usually define “geomatics-grade”, in which precision and accuracy are the discriminators for obtaining accurate and reliable data, guaranteed by sophisticated systems that can be brought to the market only by organizations capable of providing adequate training and technical support. Also, in this market the circle of the competitors is reduced a lot.
However, the product (actually it is a complete solution) that more than any other convinced me to have undertaken together with YellowScan a Blue Ocean strategy is definitely represented by Navigator, the new bathymetric lidar released earlier this year.
YellowScan has created with Navigator a market hitherto non-existent, that one of the bathymetric surveying by drone, able to offer a unique technological solution, in areas left uncovered by traditional bathymetric equipment carried out by boat or helicopter and ultralight aircraft equipped with lidar.
Navigator represents an authentic “breakthrough” for YellowScan that developed and realized the product entirely in house, based on a project that was in “pipeline” for five years and that has allowed it to gain a huge competitive advantage over all manufacturers and integrators of lidar systems in the world.
The value of the solution is very high for customers and all other YellowScan stakeholders, consolidating existing partnerships and creating new ones, bringing unprecedented benefits to the world of research and professions, operating in the areas of coastal relief extended to underwater areas, in river surveys aimed at monitoring flood risks, morpho-dynamics, hydraulic peaks and habitat monitoring.
Although I immediately understood the value proposition, I must confess that I initially underestimated the potential market size of YellowScan Navigator, which as I reported earlier, is instead the strategic move that sees us more and more actors of a “Blue Ocean Strategy”.
I admit that the first time I heard about Navigator (it was not yet on the market and it was called Alligator) I ascribed it an excessively niche role and only with the experience gained in the first tests in the field, conducted with Universities and Research Institutes and thanks to the incredibly high number of requests also received from the “service provider” sector, I convinced myself that the niche was not such at all and was instead a market uncovered by alternative solutions.
The productivity rate of a lidar that can be carried in flight by a medium-sized drone, able to load a payload of 3.7kg. is very high. The solution allows to operate on shore and shallow waters, not navigable by boats with bathymetric equipment, and is much less expensive than what is offered by lidar systems carried by helicopters and ultralight aircraft, not least it is able to acquire much more detailed and accurate data.
Of course, the processing of the complex data provided by a “fullwave” with returns up to 10 echoes, is entrusted to the proprietary software YellowScan CloudStation, which can perform the detection and classification of water.
This is what I wished to tell today, linking the most appropriate definition of “Blue Ocean Strategy” to the invention and launch of a unique product, designed to measure underwater and destined for a market that was not there until yesterday, but it was also the lexical link of “Blu Ocean Strategy” and “Navigator” that inspired me this story.
AM