Dec 12 2006
How Blue is Your Ocean?
In early 2006, Filene assembled credit union leaders and academics to examine the concepts and principles set forth in the groundbreaking book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by W. Chan Kim and Renee Mauborgne. Filene author Roch Parayre, of the Wharton School and Decision Strategies International, then applied the “value innovation” processes to create this exciting study for the credit union industry.
The Blue Ocean report:
- Introduces the value innovation framework and its applicability to credit unions;
- Furnishes examples of value innovation at work in the financial services marketplace; and
- Provides a set of tools that can be used to revitalize credit unions’ strategy development.
Value innovation offers a unique framework for organizations to develop new uncontested market opportunities. In the words of Kim and Mauborgne, this creates a blue ocean strategy.
Like most competitive industries, the retail financial services marketplace can be portrayed as a red ocean, or competitive landscape that is bloodied by fiercely competitive rivals vying for the same share of the consumer’s financial services needs. In this red ocean, competitors exhibit undifferentiated strategies in a crowded marketplace, which drives down profits, creates commodification and turns the waters bloody. Value innovation, by contrast, generates blue ocean strategies through the simultaneous pursuit of lower cost and differentiation.
We hope this report provides a roadmap to better understand how your credit union can innovate in the future. We’d love to hear what you think about the report!