Finding your bank's 'Blue Ocean' strategy.

• Author: Motley, L. Biff
• Position: Customer Satisfaction - Viewpoint essay

In their best-selling book, "Blue Ocean Strategy," (Harvard Business School Publishing Corp., 2005) authors W. Chan Kim and Renee Mauborgne talk about ways to create uncontested market space while making the competition irrelevant. This is the holy grail we marketers have been seeking since we began thinking about product differentiation, market segmentation, positioning, and all the other concepts directed toward protecting our companies from the "red ocean of undifferentiated price competition."

Their insights are revealing and helpful. The key in many of their examples is to pare down the bloated offerings to something simple and combine it with a high value element from another field. For example, Cirque du Soleil, while in its essence is a kind of circus, pared down the expenses associated with hauling animals acts and other elements of the three-ring format, while amplifying the up-market theatrical aspects of their show. In the end, they were able to both reduce their costs of operation and increase their ticket prices by appealing to a different market segment within which there were no competitors. They found their blue ocean.

In a similar way, Yellow Tail wines, Curves and other companies described in the book did the same. They analyzed their competitors' offerings, gained an understanding of which elements were valued by clients and which were not, then set about carving a new niche, or "blue ocean strategy." In the case of Yellow Tail wines, they jettisoned all of the unimportant talk about enological heritage, aging quality, vineyard prestige, and wine complexity and focused on ease of selection (they offer only two wine types: Shiraz and Chardonnay), ease of drinking (they both taste good); and fun and adventure.

Curves, the very successful women's fitness franchiser, moved into their blue ocean by focusing on the unique preferences of...