Recession Proof Your Business_July 2009

How To Recession ProofYour Business

Waterside Consulting LLCChicago, Illinois, USA

How To Recession ProofYour Business

Waterside Consulting LLCChicago, Illinois, USA

Summer 2009 www.WatersideConsulting.net


Waterside Consulting

Introduction


About Waterside Consulting

• Since 2005, Waterside Consultants have:

– Provided strategic business consulting and advanced marketing consulting services using Blue Ocean Strategy.

– Helped Fortune 1000 and mid-sized companies with both “high level” and tactical business marketing and strategy.

– Served its clients in real time and operated virtually to optimize strategy development and resources associated with typical high-end consulting. We’re the world’s

first virtualBlue Ocean Strategy

consulting firm

We’re the world’s first virtual

Blue Ocean Strategy consulting firm


Principals:Carrie Halle

Senior Principal

• Carrie Halle is a Senior Principal with Waterside Consulting.

– Over 12 years of senior level marketing experience with consumer and industrial companies.

– Held senior level marketing positions at Ameritech, Motorola, NEXTEL and Zurich.

– CEO of a mid-size residential services firm.

– Developed and conducted marketing campaigns which have generated from $250,000 to $500 million in revenue for small and large companies.

– MBA from the University of Wisconsin-Madison, Major in Marketing, Dean’s List Honor student.

– BBA from the University of Wisconsin-Madison, Majors in Marketing, Management and Advertising.


Principals:Michael BoldenLead Strategist

• Michael Bolden is the Lead Strategist for Waterside Consulting.

– Over 15 years work experience in strategic development and has practiced Blue Ocean Strategy since its introduction in 2005.

– In recent work, developed a $200 million business for a “big box” retailer utilizing Blue Ocean Strategy.

– Worked for Accenture, Ernst & Young, CSC and 3M.

– Developed BOS 2.0 which is the next generation BOS focused around "owning market space" and dominating a given market.

– MBA from University of Chicago Booth School of Business, Majors in Marketing, Policy (Strategy), Finance and Production Management, Dean’s List Honor student.

– BS from Stanford University in Industrial Engineering.


Recession Proofing

Your Company

The Great Tail Chase

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight

Profitability declines

Launch more

offensive tactics

Overcrowded Market Space

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics


Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tacticsRevenues

decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics

Revenues decline

Expenses remain

high or grow

Cash flow becomes

tight


Launch more

offensive tactics


Market Space A

Move Into New Market Space

• Move out of the overcrowded market space.

• Move into a new market space where there is no competitor –wide open playing field of potential revenues and profits.

• Forward thinkers are shifting their focus from recession to recovery … and they will be poised for growth when the economy turns around.


How do we do this?

Blue Ocean Strategy


About Blue Ocean Strategy

• Blue Ocean Strategy, by W. Chan Kim and Renee Mauborgne, is an international best seller with over one million copies sold and translated into a record-setting 41 different languages.

• Published in 2005 by Harvard University Business School.

• Waterside Consulting uses Blue Ocean Strategy Basics and our Proprietary 2.0 Version to help clients create uncontested market space and make the competition irrelevant.


Blue Ocean Strategy (BOS)

• Create uncontested market space

• Make the competition irrelevant

• Create and capture new demand

• Break the value-cost trade off

• Pursue differentiation AND low cost simultaneously

Basic Definitions

• Red Ocean: Markets or industries where competition is competing for greater share of existing demand that is typically stagnant or declining (the bloody battle).

• Blue Ocean: Markets or industries where there is no competition because it is an untapped market space. The rules of the game are waiting to be written.

• Value Innovation: Creating a blue ocean by creating a leap in value for buyers of your company’s products and/or services, thereby making the competition irrelevant.

• Strategy Canvas: An analytical framework or tool that helps you to determine Value Innovation by looking at the factors the industry current competes on and plotting your product/service against your key competitors.



“Real Life” BOS Examples

Companies:– Federal Express– IKEA– Apple– Starbucks– Curves– Saturn– Nordstrom's

• Product Examples:– Television– Computer– Cell Phones– RIM Blackberry– Nintendo Wii

It’s not just about technological

advancements; it’s about creating

a new market space

It’s not just about technological

advancements; it’s about creating

a new market space


Strategy Canvas

• The key tool and cornerstone for initiating and formulating BOS is the Strategy Canvas:

– Dimensionalizes the major features or benefits of a product, company, or industry.

– On the Y-Axis are the relative value utilities of high, medium, and low.

– On the X-Axis are the dimensions, and on the Y-Axis is the relative scale or utility.

– Blue Ocean Strategy’s most powerful tool.

– Intuitive and simple, but yet non-obvious.

Strategy Canvas Visual


Mid-Size Compact Vehicle Value CurveSaturn vs. Average Mid-Size Compart Car Buyer

0.5

1

1.5

2

2.5

3

Style Gas Mileage Safety Reliability Price

Factors

Rati

ng

Average Mid-Size Compact Car Buyer Saturn Car Buyer

Low

Medium

High

Four Action Framework

EliminateEliminate

ReduceReduce

RaiseRaise

CreateCreate

Which of the factors that the industrytakes for granted should be eliminated?

Which factors should be reduced well belowThe industry standard?

Which factors should be raised well abovethe industry standard?

Which factors should be created that the industryhas never offered?

Value Curve Visual


Mid-Size Compact Value CurveSaturn vs. Mid-Sized Compact Vehicle Competitors

0

0.5

1

1.5

2

2.5

3

3.5

Style Gas Mileage Safety Reliability Price No HagglePricing

Employee-Owned

Company

Made InAmerica

On-Star

Factors

Rating

Average Mid-Size Compact Car Buyer Saturn Car Buyer

New Factors


Value InnovationThe Cornerstone of Blue Ocean Strategy

• Focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.

• Value Innovation places equal emphasis on value and costs. Blue Ocean Strategy seeks to create blue oceans by the pursuit of differentiation and low cost simultaneously, unlike Porter’s model.

Buyer Value

Costs

ValueInnovation

The Simultaneous Pursuit of Differentiation and Low Cost


The “Secret Sauce” BehindRecession Proofing Your Company

• With Waterside’s BOS Advanced Proprietary 2.0 (book due out later this summer), there are two immediate “winners” for companies looking to increase revenue:

– Hyper Dimensionality

– Selective Feature Reduction

Hyper Dimensionality & Selective Feature Reduction Visual

Operating System Strategy CanvasPlanned Google Chrome OS vs. Microsoft Windows Vista OS

0

0.5

1

1.5

2

2.5

3

3.5

Requ

ires

licen

se

Req

uires

upg

rade

s

Req

uires

com

pute

rm

em

ory

Man

ages

data

and

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nt

onyo

ur

com

pute

r

Fig

hts

secu

rity

risk

s

Fas

t acc

ess

toth

e in

tern

et

Back

up

and

rest

ore

capa

bili

tes

Com

pute

rpe

rfor

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impro

vem

ents

Runs

withou

ttr

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com

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rs

Man

ages

dat

aan

d co

nte

nt

inth

e c

loud

Factors

Rati

ng

Microsoft Windows Vista Google Chrome OS

Feature Reduction (Elimination)

Hyper-Dimensional Features


Waterside Can Help


Signs Your CompanyIs Sailing Into Rough Waters

• Is your company “Chasing Its Tail” or experiencing the "Fatal Five" danger signs:

– Slowed or stagnant growth

– Decreased revenues

– Increased costs

– Lower profitability

– Unpredictable cash flow

Contact Us

• 630.444.0844

• [email protected]