Blue Ocean Strategy
for Computer consultancy and computer facilities management activities (ISIC 6202)
Given the 'Margin Compression' (MD01, MD07) and 'Structural Competitive Regime' (MD07) in the computer consultancy and facilities management industry, a strategy to create new market space is highly relevant. The rapid pace of technological change (IN02) constantly creates opportunities for 'blue...
Strategic Overview
The Computer consultancy and computer facilities management activities industry is characterized by fierce competition, leading to 'Margin Compression' (MD01, MD07) and a 'Talent War & Attrition' (MD07) in established service areas. Many traditional offerings risk commoditization due to 'Market Obsolescence & Substitution Risk' (MD01) and 'Structural Market Saturation' (MD08). In this 'red ocean' of intense competition, Blue Ocean Strategy provides a critical framework for firms to break away from existing market boundaries and create uncontested market space, thereby making the competition irrelevant.
This strategy encourages identifying entirely new value curves by focusing on non-customers and unmet needs, leveraging the rapid advancements in technology (IN02, IN03). Instead of competing on price or marginal improvements in existing service lines, firms can develop innovative hybrid offerings, specialized consulting verticals, or novel delivery models. This not only enhances profitability by escaping price wars but also attracts and retains top talent seeking cutting-edge work, addressing 'Talent Shortage & Recruitment Difficulty' (CS08) and 'Skill Obsolescence' (MD01) by fostering innovation. Successfully navigating a Blue Ocean requires a significant investment in R&D and skill transformation (IN05), but promises substantial long-term growth and market leadership.
4 strategic insights for this industry
Escaping Commoditization Through Value Innovation
Many foundational IT services (e.g., basic infrastructure, help desk) have become highly commoditized, leading to intense price competition and 'Margin Compression' (MD01, MD07). Blue Ocean Strategy allows firms to identify elements to 'eliminate,' 'reduce,' 'raise,' and 'create' in their value offerings, moving beyond incremental improvements. For example, eliminating unnecessary features/costs while creating entirely new value like 'AI-driven predictive maintenance' can redefine the market for facilities management.
Leveraging Emerging Technologies for New Market Space
The rapid evolution of technologies such as Generative AI, Quantum Computing, Blockchain, and advanced IoT creates vast opportunities for 'blue oceans.' Instead of merely adopting these as features, consultants can build entirely new service categories around their strategic application (e.g., 'AI Ethics and Governance Consulting,' 'Quantum Readiness Strategy for Financial Services'). This leverages 'Innovation Option Value' (IN03) but requires managing 'Talent Skill Obsolescence' (IN02) through continuous upskilling.
Identifying 'Non-Customers' and Unmet Needs
A core tenet of Blue Ocean is to look beyond existing customers to 'non-customers' – those who are underserved or not served at all by the current industry offerings. For instance, small to medium-sized enterprises (SMEs) may perceive traditional IT consulting as too expensive or complex. Creating simplified, subscription-based 'IT Strategy as a Service' tailored for SMEs could open a new, uncontested market, addressing 'High Customer Acquisition Cost (CAC)' (MD06) by tapping into an overlooked segment.
The Talent Advantage in Blue Oceans
While the industry faces a 'Talent War & Attrition' (MD07) and 'Talent Shortage & Recruitment Difficulty' (CS08) for established skills, creating blue oceans can attract and retain top talent. Professionals are often drawn to innovative, challenging work that defines new frontiers. Firms known for pioneering new service areas (e.g., specialized cybersecurity for critical infrastructure) can become magnets for highly skilled individuals, mitigating talent-related risks.
Prioritized actions for this industry
Conduct a systematic 'Four Actions Framework' (Eliminate, Reduce, Raise, Create) analysis for existing and potential service lines.
This framework helps identify non-value-adding elements to eliminate or reduce, and value-adding factors to raise or create, fundamentally reshaping the value curve of services. It moves beyond competitive benchmarking to value innovation, directly tackling 'Margin Compression' (MD01, MD07).
Invest significantly in R&D and specialized skill development for emerging technological domains with high 'Innovation Option Value'.
To create new markets, firms must be at the forefront of technology application. This requires proactive investment in learning, talent acquisition, and pilot projects for areas like AI, quantum computing, or specific vertical industry solutions. This addresses 'MD01 Investment in New Technologies' and 'IN02 Technology Adoption & Legacy Drag'.
Identify and target 'non-customers' (e.g., overlooked industries, SMEs, or internal departments not currently served) with uniquely tailored, high-value offerings.
Focusing on those outside the current market who face unmet needs is key to creating new demand. This could involve simplified service models, specialized packages, or subscription-based offerings that overcome existing barriers (e.g., cost, complexity) for new client segments, addressing 'MD06 High Customer Acquisition Cost (CAC)' by opening new demand.
Develop and commercialize 'hybrid offerings' that combine traditional consultancy with proprietary software, data platforms, or unique intellectual property.
Moving beyond pure service delivery into 'consulting-as-a-product' or platform-based solutions creates defensible market space and can generate recurring revenue. This differentiation helps mitigate 'Vendor Lock-in Risk' (MD05) for clients and establishes a unique market position, enhancing 'Inconsistent Pricing Power' (MD03).
From quick wins to long-term transformation
- Organize cross-functional brainstorming sessions to identify 'non-customers' and their unmet needs.
- Conduct a preliminary 'As-Is' strategy canvas for a core service line to visualize current competitive factors.
- Task a small, agile team to research and prototype 1-2 'blue ocean' concepts in emerging tech areas.
- Pilot a 'blue ocean' service offering with a select group of early adopters or non-customers.
- Allocate dedicated budget and resources for continuous R&D and skill development in identified blue ocean areas.
- Develop a new 'To-Be' strategy canvas for a potential blue ocean offering, outlining its unique value proposition.
- Integrate Blue Ocean thinking into the company's strategic planning and innovation pipeline as a continuous process.
- Establish partnerships with academic institutions or tech startups to co-create blue ocean solutions.
- Realign organizational structure and incentives to support risk-taking and market-creating initiatives.
- Underestimating the effort required for market education and convincing 'non-customers' of new value propositions.
- Spreading resources too thin across multiple speculative blue ocean ventures without clear prioritization.
- Lack of internal alignment and resistance to change from established business units.
- Failing to protect new market space through IP or rapid scaling, allowing competitors to quickly imitate.
Measuring strategic progress
| Metric | Description | Target Benchmark |
|---|---|---|
| Revenue from New Market Offerings | Percentage of total revenue generated from services or products introduced as 'blue ocean' initiatives within the last 3-5 years. | Achieve 25% of total revenue from blue ocean offerings within 5 years. |
| Market Share in New Segments | The percentage of market captured in newly created or redefined market segments where competition is minimal. | Achieve >60% market share in identified new segments within 3 years of entry. |
| Profit Margins of Blue Ocean Services | Measures the profitability of services specifically designed to create new market space, typically higher due to reduced competition. | Achieve 2x average industry profit margins for blue ocean services. |
| Innovation Pipeline Velocity | Tracks the speed and volume of new market-creating ideas moving from concept to pilot to full commercialization. | Launch 1-2 significant blue ocean initiatives per year with a 75% success rate. |
Other strategy analyses for Computer consultancy and computer facilities management activities
Also see: Blue Ocean Strategy Framework