Thursday, June 07, 2007

Blue Ocean Opportunities?

Smart companies in today’s hyper-competitive industry are redefining the market space in which they are competing. They are trying to avoid the overly competitive space where they can’t find a truly long-lasting advantage and rather compete in spaces that seem neglected. Look at HP’s successful strategy which moved from competing heads on heads with Dell in the Direct Space to a stronger focus on the retail space. Their recent success in the retail market explains partly why they have overtaken Dell as the largest computer manufacturer. Another example was IBM’s move from a pure hardware focus (especially on PCs) to service oriented offerings that really drove their growth over the last 5 years.

This strategic repositioning move, nicknamed Blue Ocean by W. Chan Kim and Renee Marborgne ( is rarely seen in our marketing services industry. Let me quote from Kim’s website: “Based on a study of 150 strategic moves spanning more than a hundred years and thirty industries, Kim and Mauborgne argue that tomorrow’s leading companies will succeed not by battling competitors, but by creating “blue oceans” of uncontested market space ripe for growth . Such strategic moves - termed “value innovation” - create powerful leaps in value for both the firm and its buyers, rendering rivals obsolete and unleashing new demand.”

Most marketing service providers are just in awe with Google’s tremendous success and are almost paralyzed of truly redefining their business cause. So, is there any marketing solutions provider that tries to redefine the competitive landscape to find a truly unique space of winning? I see primarily two core blue oceans opportunities that marketing solution providers can pursue:
  • Technology leadership: Imagine a software company married to a full service marketing agency. This happened when Microsoft acquired Avenue A/Razorfish. It will be interesting to see how it plays out.
  • Strategy leadership: Imagine McKinsey married to a creative hot shop like Crispin Porter, assuming the new entity would survive the cultural shock of combining such different entities. But if done successfully, it could be unbelievable powerful

Over the next years we will witness agencies that will have identified these blue ocean opportunities and be the leader it. They will redefine the solutions space that they are competing in. Any bets on particular firms?

Friday, June 01, 2007

Marketing in India

Last week I spent some time in Mumbai, India. I was thoroughly impressed with the marketing talents that I met. In the US and Europe we are always focusing strongly on the tremendous engineering talent that India has but we forget that there are already thousands of successful and brilliant marketers, in addition to the thousands of great marketers that are currently being educated.

Based on my (still limited) understanding of the Indian marketing landscape I believe that there are few critical forces that will decide over the next 5 years the impact that the Indian marketing community could have on a global scale:
  • Knowledge transfer: The knowledge transfer of successful US based (most located in Silicon Valley) Indian entrepreneurs back to India is critical in developing an even more sophisticated marketing know-how and talent. This could happen in creating a very active marketing centric start up culture and mentality around, or by bringing additional capital into the key Indian centers, or by transferring additional management expertise to India
  • Global Indian brands: India developed only a few global primarily B2B brands over the last decade. But it is still lacking in building out large Consumer brands that have global reach. I am confident that this will change, it’s just a question of how fast and how many. But it’s absolutely necessary to develop a strong Indian marketing community
  • Move beyond back-office support functions to central value generation: There is still a tendency to consider India primarily as a back office provider for US and Europe based firms. It’s definitely necessary that India continues to develop stronger and stronger solutions for global firms but in addition it has to focus on becoming the center for proprietary and innovative core value generating solutions, too. This can only happen through developing state-of-the-art consumer facing marketing offerings.

I strongly recommend that any global marketer spends time in India and starts to learn about the growing impact on our marketing discipline. I am just at the beginning of my learning experience.