Jun 12

Blue Ocean Strategy and service innovation, an interview with the Marketing Manager of Schindler Italia

The Blue Ocean approach is based on the assumption that in mature markets, blocked and with decreasing margins, win companies that manage to propose new competitive formulas, by introducing new competitive factors, and not companies that create the best mix of consolidated competitive elements. Schindler, a colossus with 45.000 employees worldwide and leading provider of lifting systems, has experimented Blue Ocean techniques, with the support of Valdani Vicari & Associati. VVA involved two internal working groups, to find new competitive formulas in the elevators maintenance segment.
We asked Sergio Rossini, Marketing Manager by the Italian division, what kind of benefits can be achieved by using Blue Ocean techniques: "Blue Ocean techniques are helpful to see markets and the problems we face every day in a different way, but also to highlight new problems and to ask new questions. A first benefit is surely the creation of a different mindset, which permits not to end up in blind alleys, typical of market reflections. For example, the belief that it is only a price matter, or that markets fail to perceive the value offered by a company. During brainstorming phase, we started “thinking" like Customers, not only with regard to our product, but trying to identify all their possible needs. This new way of thinking led us to frequent places where our Customers usually meet or discuss, like associative events or social network: we discovered that what we can do for them is more than just selling a product."
Blue Ocean techniques are not based on detailed Customers observation, hyper-segmentation, industry benchmark, scouting and technological innovation. Blue Ocean proposes alternative techniques, generally not used during companies reflections. For example: the analysis of neighboring, complementary and alternative markets; the analysis of market non-Customers; the anticipation of inevitable, long-term trend; the analysis of established practices for market segmentation. These techniques lead to the generation of competitive ideas, often very far from the established market culture. How can you "promote" internally and defend these new ideas?: "The visual representation of all Customer Value Propositions in the market, through the so called “Value Curves”, is a tool that allows to challenge established perceptions and visions of the internal management. It enables also to prepare the ground for innovative proposals, that unfortunately are often not really explored because of their distance from company’s dominant culture. Then there is a second step, in which proposals become compelling because the sales force gets unexpected results, using these new approaches. However, concept and product presentations, as well as classroom trainings, help companies to be prepared to the real test: Customers reaction."
Do you think you have found some Blue Ocean, small or large? “Probably not yet, but I can say that looking for it, we challenged a lot of typical clichés in our industry. We begin to be perceived in a different way with respect to the other competitors: this is not a Blue Ocean, but it is surely a competitive advantage.”
What other approaches and ideas have been used in Schindler to find new competitive insights? “In the past, the self-assessment based on EFQM model (note: a model for quality and excellence development, sponsored by the namesake foundation, that also allows to participate in the 'European Quality Award - EQA) and Customer satisfaction surveys. However, these methods allowed us to make only incremental improvements and not to generate quantum leaps. Now we are looking with interest at the Customer Experience approach and at the concept of Bad Profit, which summarizes the eternal struggle between the search of profitable and sustainable growth and the necessity to meet short-term economic objectives. An example: the removal of penalty."
In your opinion, what are the most important competitive levers in this market phase? “Ours market is mature and characterized by the simultaneous presence of artisans and multinational companies. These last ones, while boasting extremely high national volumes, have smaller results in the provincial or city micro-market, with respect to artisans. Customers accept with increasing difficulty a premium price for higher-quality products; lifting systems are increasingly perceived as a commodity. In this situation, key drivers for success are Customer Relations and Communication, which does not mean advertising but transparency. Today, our Customers can monitor all aspects of the service that we provide them, directly through our systems. This is made possible by technology, but primarily by our desire to be an help for Customers and not a counterpart.”