www.EldercareDecisions.com Growing your Eldercare Practice

One of the activities that we hope to encourage here at the National Eldercare Professionals Community is the sharing of great ideas, including books and articles that our members have read and found useful in growing our business.

We also will encourage our members to warn us to avoid some of the BS that claims to be the latest, best, most creative, and most innovative approach to business, but really is nothing more than over hyped blather.

If you have not yet read the Blue Ocean Strategy we want to recommend this very stimulating book. You'll find it at Amazon.com and most bookstores.

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renée Mauborgne

Creating and defining your market space using strategic principles from the Harvard business school (W.  Chan Kim and Renée Mauborgne, Harvard University Press)

"In "red oceans"   companies try to outperform their rivals to grab a greater share of existing demand as the market space gets crowded prospect for profits and growth are reduced.  Products become commodities and cutthroat competition turns the red ocean bloody.  Blue oceans by contrast are defined by untapped market space , demand creation and the opportunity for highly profitable growth.  Although some blue oceans are created well beyond existing industry boundaries, most are created from within red oceans by expanding existing industry boundaries.   "

It will always be important to swim successfully in the red ocean by competing rivals red oceans will always matter and will always be a factor business life.  But with supply exceeding demand in more industries -competing for share of contracting markets while necessary will not be sufficient to sustain high performance.  Companies need to go beyond competing.  To seize new profit and growth opportunities they also need to create "blue oceans".

  The reality is that industries never stand still.  They continuously evolve, operations are improved, markets expand, players come and go.  

To set a company on a strong profitable growth fpath in the face of competitive industry conditions it won't work to benchmark competitors and try to out compete them by offering a little more for a little less. Such a strategy may nudge sales up but it will hardly drive a company to open up uncontested markets space.  The key is to gain insight into how to redefine the problem the industry focuses on, and thereby reconstruct buyer value elements that reside across industry boundaries.

To create a new value curve, there are four key questions to challenge an industry strategic logic and business model:

• Which of the factors that the industry takes for granted should be eliminated.
• Which factor should be reduced well below the industry standard
• Which factors should be raised well above the industry standard
• Which factor should be created that the industry has never offered

To position your eldercare business to stand out in your market area you need to discover entirely new sources of value for buyers and to create new demand and shift your strategic plan.

Three characteristics of a good strategy

1. FOCUS: Avoid a strategy that is a muddled. Every great strategy has a focus. The company's strategic profile or value curve should clearly show it.  If you let your competitor's moves set your agenda, a costly business model is the result.  And undifferentiated and hard to communicate marketing and sales system with a high cost structure.

2. DIVERGENCE: When a company strategy is formed reactively as it tries to keep up with the competition, it loses its uniqueness.  By applying the four actions of a eliminating, reducing, raising, and creating, you differentiate your profile from the industry's average profile. Southwest airlines for example pioneered point-to-point travel between midsize cities; previously the industry operated through hub and spoke systems.

6 Strategies of blue ocean strategy

1. Reconstruct market boundaries
2. Focus on the big picture not the numbers
3. Reach beyond existing demand
4. Get the strategic sequence right
5. Overcome key organizational hurdles
6. Build execution into strategy

  Value innovation creates powerful leaps in value for both the firm and its buyers, rendering rivals obsolete and unleashing new demand

  This is the cornerstone of the blue ocean strategy

Using the competition as a benchmark creates a "me too" strategy.  Instead of focusing on beating the competition, focus instead on making the competition irrelevant.  You do this by creating a leap in value for buyers and your company thereby opening up a new and uncontested marketplace