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Get off the beaten track, ...

ENJOY BLUE OCEAN STRATEGY IN WEB-TO-PRINT

I would like to take this opportunity of the Web-to-Print week launched on INKISH to share with you one of my former posts from October 2011 about the Blue Ocean strategy which remains, in my opinion, very relevant for companies wishing to launch an online printing business... I hope you enjoy reading it: 

We all know very well that it is very rare to meet successful printing companies year after year, either because the industry is going through a difficult period, as it is the case today for the graphic industries, or also because unfortunate decisions have been taken by their managers.

Nevertheless, some printing companies, such as Exaprint, the printing company reserved exclusively for graphic arts professionals (see the following presentation of this particular printing company by its founder Philippe Dupuy) succeed despite a difficult economic situation. Why?

These printing companies have created an entirely new market space that W. Chan Kim and Renée Mauborgne in their book[1] call "the blue ocean" as opposed to the "red ocean", the saturated competitive environment where most existing printing companies are located. 

By choosing a blue ocean strategy, companies are making the choice to no longer accept the boundaries and rules of the game imposed by their industry. They are moving away from the idea that the only way out is to outperform their competitors every time. They are thus leaving the space of an increasingly crowded market with growth prospects that are shrinking year by year.

Of course, there is no question of these companies ignoring their own market and not wanting to overtake their opponents. Competition is part of the life of any business. But as supply outstrips demand, especially in a sector such as the graphics industry, which is being stifled by overcapacity, printers can no longer simply fight for market which is reduced to skin of sorrow: they must rise above it. 

"Graphic arts professionals must "get out" of the logic of price and the technical offer of print only. The printed document alone is no longer sufficient to meet the expectations and needs of clients." (Edito Examag n°10)

For years now, printing companies have in fact been too inclined to compare themselves with the best in the sector and to focus solely on their market by choosing a strategic orientation focused either on cost domination, or on differentiation or focusing.

How do you leave your known strategic space? How to create a new strategic space?

In addition to not engaging in a speed race with one's competitors and not constantly comparing oneself with one's competitors[2], the authors' advice is to apply a completely different logic which they call innovation-value, i.e. the simultaneous pursuit of differentiation and cost domination.

By the innovation-value logic, “it is a question of making a leap in value, both for the buyer and from the point of view of the company, which makes it possible to put competition out of the game by creating a new strategic space not disputed.”[3]

Figure 1: Innovation-Value: Cornerstone of the Blue Ocean Strategy (source: Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne)

Knowing that the usefulness and the price of the offer determine value to the buyer, and price and cost control determine value to the business, printers, like any business, must strive to combine cost reduction with increased value to the buyer (see Figure 1).

Based on this logic, Exaprint, for example, has chosen not to sell its products directly, but to maintain a network of 100% resellers, exclusively graphic arts professionals (printers, advertising agencies, graphic designers...)[4]. 

Having anticipated what is valuable for its resellers, a batch of services associated with the printed product, Exaprint integrates each year into its "reseller kit" offer a batch of innovations and unprecedented services (a "green products" catalogue, "innovative products", sales support products, white-label web shops, etc.) while investing in new production tools and automation to reduce its manufacturing costs.

"Bringing you the best product offer on the market in terms of delivery time, price and quality is a priority for us. Our difference: to offer you innovative and efficient marketing tools." (Examag n°10)

W. Chan Kim and Renée Mauborgne insist, innovation-value goes beyond innovation. It is above all a matter of strategy. In the case of Exaprint, innovation-value certainly does not stop at the investment in a new digital press or the development of new web tools, but it concerns all of the company's activities: marketing, production, customer service...

Summary of the fundamental characteristics that define Red Ocean and Blue Ocean strategies:

Red Ocean Strategy
Blue Ocean Strategy
- Act within the existing strategic space. 
- Create a new strategic space. 
- Beat the competition.
- Put the competition out of the game. 
 - Exploit existing demand.
- Create and conquer new demand.
- Accept the trade-off between value and cost dominance.
- Get out of the trade-off between value and cost dominance.
- Bring all company activities in line with its strategic choice of differentiation or cost dominance.
 - Bring all the company's activities into line with its strategic choice of differentiation and cost domination. 

[1] "Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant", W. Chan Kim and Renée Mauborgne

[2] Kim and Mauborgne argue that the concern for benchmarking and the obsession with winning over competition promotes an imitative - not innovative - attitude toward the market that often leads to price pressures and further commoditization of products (1997a, 1997b, 1997c). Rather, they argue, firms should seek to take competition out of the game by offering a qualitative leap to the customer. Gary Hamel argues that success, for both new entrants and established leaders, depends on the ability to avoid competition and to rethink the inherited industry model (1998). He further states that the formula for success is to bypass competition rather than to position oneself against it (2000).

[3] "Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant", W. Chan Kim and Renée Mauborgne

[4] In this concept, Exaprint remain anonymous, the reseller is the sole interlocutor of his customer.