I.
Blue Ocean Strategy
In “Blue Ocean Strategy,” the authors provide
a framework and tool set for discovering new markets in traditionally filled
spaces (Red Ocean) by changing the nature of competition away from the normal
direction of the industry. The main idea of the Blue Ocean Strategy is the
value innovation to reinvent the business model such that maximize the value
proposition and minimize the cost to provide the value to customers. To achieve
the value innovation the authors suggest the companies ask the following four
questions (eliminate-reduce-raise-create framework):
a. Which of the factors that the industry
takes for granted should be eliminated?
b. Which factors should be reduced well below
the industry standard?
c. Which factors should be raised well above
the industry standard?
d. Which factors should be created that the
industry has never offered?
These four questions can be converted into
the strategy canvas (level of value proposition v. value proposition factors)
to create a new value curve. In “Blue Ocean Strategy,” the authors use strategy
canvas to analyze the competitive environment of the market. Drawing a strategy
canvas does three things. First, it shows the strategic profile of an industry
by depicting very clearly the factors that affect competition among industry
players (BLUE OCEAN FACTORS). Second, it shows the strategic profile of current
and potential competitors, identifying which factors they invest in strategically.
Finally, it shows the company’s strategic profile- or value curve-depicting how
it invests in the factors of competition and how it might invest in them in the
future.
II. Blue Ocean Patent Strategy
The basic principle in the Blue Ocean Patent Strategy
is to exploit existing patents to achieve the value innovation, and thus, to
serve the customers in fundamentally different ways. For example, a company in
the consumer electronics industry that wants to enter the medical device
industry can exploit existing patents that cover the factors of the strategy
canvas. By deciding which factors (that are covered by the existing patents)
are really crucial, and thus, needed to raise and/or create, a new business
model that changes the nature of competition away from the typical direction of
the medical device industry can be developed. Patents regarding superior UI/UX,
compact/portable design, robust wireless connectivity are the good candidates
for the BLUE OCEAN FACTORS.
Another way to achieve the value innovation
is to integrate into the existing platforms. HBS Professor Iansiti, the author
of “The Keystone Advantage,” suggested technological assimilation as a new
engine for technological innovations in his article “Creative Construction.” In
the technological assimilation frameworks, a core innovation that once provided
stand-alone products or services for a specific market can be the building
blocks for mass market generating innovations through assimilation to broader platforms
that were not existed at the time of innovations. A good example may be the GPS
technology providing LBS (location based services) applications for smartphones
and automobiles. Another good example may be the DVR technology of TiVo that
was integrated into digital set-top box platforms. By contrasting all possible
value propositions from an existing platform to the potential value
propositions provided by the inventive departures (novelty points) of the
existing patent(s), the integration feasibility of the existing patented
technologies into the platform can be found, and thus, the new integrated value
propositions can be developed.
As the smartphone market matured, many
companies are looking for the post-smartphone market that can generate new revenues.
Many market researchers expect that the interconnected IoT (Internet of Things)
devices will create a new market that will result in more than $1 trillion in
value added to the global economy within 10 years. Recently, many global
leaders in IoT business provide the IoT platforms to create diverse
platform-based business models and form IoT business ecosystem. According to
the market research of Research and Markets, there are more than 260 companies
that are offering IoT platforms. These IoT platforms can be the good candidates
to be considered for the development of the Blue Ocean Patent Strategy.
For details regarding the Blue Ocean Patent StrategyTM development, please contact Alex G. Lee
(alexglee@techipm.com).
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