Adrift On Open Seas: Risks when Pursuing Blue Oceans pt.2
In this ever-changing world of digital agencies, our visionary owner Alex continues their pursuit of an effective Blue Ocean Strategy. After learning from previous mistakes and incorporating the insights of a SWOT analysis into their strategic planning, Alex felt excited to dive into their Blue Ocean strategic discovery. However, the team's enthusiasm was quickly depleted as they realized how the shifting sands of politics, economics, and social trends impact everything.
“Many mechanics are at play when crafting a Blue Ocean Strategy. These shifting tides, like winds on the ocean, can take an eager organization miles off course and create a constant restarting loop as environmental variables change (sometimes daily).”
It wasn't long before Alex realized their Blue Ocean Strategy was far from bulletproof. They had made significant strides in differentiating themselves from the competition. Still, they hadn't considered the broader environment their business operates in.
Putting Some Wind In Your Sails
A PEST (Political, Economic, Social, and Technological) Analysis is an excellent framework to complement your Blue Ocean Strategic approach. PEST examines the macro-environmental factors that can impact business performance. Changes in government regulations, economic fluctuations, and social trends all dramatically influence how industry transforms through time.
Enhancing BOS w/PEST
A PEST Analysis can complement your Blue Ocean Strategy with valuable insights into the macro-environmental factors that impact a company's performance. These insights help businesses proactively address challenges and capitalize on opportunities when pursuing that elusive Blue Ocean.
Here are some ways a PEST Analysis can enhance a Blue Ocean Strategy:
Political factors: A PEST Analysis can help businesses understand the political climate, including government regulations, policies, and stability, which influence operations.
Economic factors: Examining economic factors such as growth rates, inflation, interest rates, and exchange rates help businesses gauge the overall health of the economy and anticipate fluctuations that impact demand for products and services.
Social factors: A PEST Analysis will help companies explore social trends, demographic shifts, and cultural influences that affect customer preferences and expectations.
Technological factors: Assessing technological factors such as emerging technologies, industry innovations, and infrastructure is part of running a successful Blue Ocean Strategy. Adding the PEST perspective can help deliver a unique expression of these trends.
Want to explore the demographic shifts happening in America today? Research the trends Vox Audita Solutions Inc., PolicyLink, and USC Dornsife put together on the National Equity Atlas.
By integrating a PEST Analysis into a Blue Ocean Strategy, businesses can develop a more comprehensive understanding of the macro-environment in which they operate. This knowledge helps them identify opportunities and challenges and inform decisions on which factors to raise, create, eliminate, or reduce when building a robust and comprehensive strategy.
Jump In With Both Feet
Ultimately, a PEST Analysis helps businesses navigate the uncharted waters of a Blue Ocean more successfully, giving them additional tools to leverage when making decisions for a new customer offering.
A successful Blue Ocean Strategy requires a comprehensive understanding of internal and external factors influencing a company's performance. By integrating tools like SWOT and PEST analyses into the Blue Ocean Strategy process, businesses gain invaluable insights into their strengths, weaknesses, opportunities, threats, and the macro-environmental factors that shape their landscape. This approach empowers companies to create innovative, well-rounded strategies better equipped to navigate a Blue Ocean process. As businesses venture into new market spaces, embracing the synergies between these strategic tools will enable them to grow exponentially.
As we continue our journey, our visionary owner, Alex, becomes wiser and more adept at developing business strategies. In the story's next chapter, we'll demonstrate how including Porter's Five Forces into a Blue Ocean Strategic process can add even more wind to the sails toward success in this unpredictable world of digital agencies.
Stay tuned and thanks for reading.
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