FPSB’s BLUE OCEAN STRATEGY

Philosophy “Competing in overcrowded industries is no way to sustain high performance. The real opportunity is to create blue oceans of uncontested market space.”

What’s a Red Ocean?  Known market space – what is today  Industry boundaries are defined/accepted  Competitive rules of the game understood  Gain share of existing demand by outperforming rivals  As space gets crowded, profits shrink, products become commodities, water turns bloody.

What’s a Blue Ocean?  Unknown market space – no competition since it doesn’t exist yet  Demand is created, not fought over  Opportunity for rapid, profitable growth  Built-in defense for brand that creates Blue Ocean space (e.g., e-Bay)  Usually created when company existing in Red Ocean alters the boundaries of an existing industry

Examples  Cirque de Soleil –Kept the clowns, tent, acrobats; added theatre. –Turned theatregers into circusgoers  Ford Model T –Black easy-to-use, easy-to-fix car that was more value than a horse, cheaper than traditional car –Turned horse-drawn carriage buyers into car buyers

CFP

Today ChFP ChFC Chartered Financial Planner RFC ISO22222 Eficert RFP Personal Financial Planner Certified Personal Financial Planner €FP

How Do We Start? Strategy Canvas  Captures the current state of play: –What factors does the industry compete on? –What do consumers value? –What is currently being offered? –Where is the competition investing? –Where is CFP certification positioned? –How can FPSB offer differentiation and value, at an affordable price?

Red vs. Blue Ocean Red Ocean Strategy  Compete in existing market space  Take on/Beat the competition  Exploit existing demand  Make the value/cost tradeoff (differentiation OR low cost) Blue Ocean Strategy  Create uncontested market space  Make competition irrelevant  Create/capture new demand  Break the value/cost tradeoff (differentiation AND low cost)

What’s Our Goal? New Value Curve  Eliminate some factors that industry takes for granted  Raise factors that should be raised well above industry standard  Reduce factors that should be reduced well below industry standard  Create factors that the industry has never offered

How Do We Get There? Six Principles of Blue Ocean Strategy  Reconstruct market boundaries  Focus on the big picture, not the numbers  Reach beyond existing demand  Get the strategic sequence right  Overcome key organizational hurdles  Build execution into strategy

Strategy Canvas for CFP Certification 1. Required to Practice 2. Education Course Credential 3. Easy student-to-credential process 4. Short Course Duration 5. Low Cost 6. Part of Career Path Program 7. Market Relevance 8. Market Dominance 9. (Perceived) Value for Membership Subscription 10. Recognized by clients/ potential clients 11. Global 12. Cross-sector focus 13. Comprehensive Training 14. Premium Brand 15. Difficulty Level 16. Pre-requisites 17. Ongoing obligations 18. Prestige/ Professional Recognition

Next Steps  Read “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant,” Harvard Business School Press, W. Chan Kim & Renee Mauborgne.