Blue ocean thinking applies across all types of industries from the typical suspects of consumer product goods to B2B, industrial, pharmaceutical, financial services, entertainment, IT, and even defense.
What about the humble cup of tea? Can you apply it there? You may ask.
Yes. Of course, we would say.
“Couldn’t one offer tea for much less money? Tea leaves the plantation as an end product. It does not need to be roasted or ground, like coffee. No further processing required. Just packaging. Then why is the product so expensive in the tea shop?,” asked Prof. Günter Faltin who back in 1985 started his own company ‘Teekampagne’ or Tea Campaign, applying – although subconsciously – a blue ocean strategic approach.
With the realization that what makes tea expensive for users are the many middlemen, he started thinking if he could circumvent the wholesalers, importers, exporters. Not for all the tea in China could Teekampagne offer a large and diverse assortment of teas without going through a wholesaler. So, how about reducing the assortment of teas offered?
Limiting the assortment to just a few kinds of tea would let Teekampagne buy in larger quantities. While the idea of radical simplicity would make the tea much more affordable, who would want to drink just one kind of tea? Probably no one. What about buying a good tea. Better yet, an excellent tea? But would customers believe in the assertion that the tea Teekampagne selected was very good? After all, every trader in the market claims that his product is the cheapest and best.
So, how about buying the best tea there is in the world? Did such a tea exist? Is it sufficiently known and recognized the world over? Their findings showed that the famous tea grows in the region of Darjeeling in eastern India, and the first pick after the winter break – the legendary First Flush. An excellent tea that came with an indisputable measure of quality.
This way Teekampagne could buy enough to order directly in the country of origin, focusing the supply of tea on single origin. Replacing the customary small packages with large ones further reduced the price for the consumer.
The best tea in the world, at an unbeatably low price: that’s the simultaneous pursuit of differentiation and low cost – the value innovation that creates a blue ocean.
Professor Günter Faltin is the founder of the Entrepreneurship Summit happening in Berlin on October 6-7, 2018.
To learn more about examples like “Teekampagne” go to the Entrepreneurship Summit, happening in Berlin October 6-7. The Entrepreneurship Summit gathers over 1,000 entrepreneurs, leaders and academics who have a blue ocean mindset and aim to go beyond competing. Check out full program of the Summit. Professor Renée Mauborgne, co-author of Blue Ocean Shift, will be delivering a special virtual address at the Summit.