1. Competitive Differentiation Bruce McAlpine, CPC President, Fulcrum Search Science Inc. ACSESS 10 th Anniversary Conference Toronto, May 7-9, 2008

2. 3 Big Questions 1. How can I develop and price my company’s bundle of services to create uncontested market space and render my competition irrelevant? 2. (Assuming this will involve internal changes) How can I “sell” this to my staff to get their buy-in and adoption? 3. How can I ensure that we are consistently delivering this unique bundle of services to our clients, thereby ensuring competitive differentiation, and hence “brand”?

3. The “Blue Ocean Strategy” Theory “Companies have long engaged in head-to-head competition in search of sustained profitable growth. They have fought for competitive advantage, battled over market share, and struggled for differentiation. Tomorrow’s leaders will succeed not by battling competitors, but by creating ‘blue oceans’ of uncontested market space ripe for growth.” (Chan Kim & Renee Mauborgne, Blue Ocean Strategy) “Companies have long engaged in head-to-head competition in search of sustained profitable growth. They have fought for competitive advantage, battled over market share, and struggled for differentiation. Tomorrow’s leaders will succeed not by battling competitors, but by creating ‘blue oceans’ of uncontested market space ripe for growth.” (Chan Kim & Renee Mauborgne, Blue Ocean Strategy)

4. Red vs Blue Ocean Strategy Red Ocean Strategy Red Ocean Strategy Compete in existing market space Compete in existing market space Beat the competition Beat the competition Exploit existing demand Exploit existing demand Make the value-cost trade- off Make the value-cost trade- off Align the firm’s activities with its strategic choice of differentiation or low cost Align the firm’s activities with its strategic choice of differentiation or low cost Blue Ocean Strategy Blue Ocean Strategy Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade- off Align the firm’s activities with its strategic choice of differentiation and low cost

5. Step 1 Identify the Factors on Which your Industry Currently Competes Identify the Factors on Which your Industry Currently Competes On what basis has our industry traditionally competed? On what basis has our industry traditionally competed? What are the factors our competitors think are important to our customers? What are the factors our competitors think are important to our customers?

6. Example – Cirque du Soleil (ref “Blue Ocean Strategy” – Kim & Mauborgne)

7. Step 2 Examine the Factors using the Eliminate- Reduce-Raise-Create Grid Examine the Factors using the Eliminate- Reduce-Raise-Create Grid Looking at these factors, which ones really are important to our customers? Looking at these factors, which ones really are important to our customers? What other products/services currently being offered by industries close to ours would be of value to our customers? What other products/services currently being offered by industries close to ours would be of value to our customers? What other factors not currently offered are really important to our customers, if them only knew they existed? What other factors not currently offered are really important to our customers, if them only knew they existed?

8. The Four Actions Framework (ref “Blue Ocean Strategy” – Kim & Mauborgne)

9. Step 3 Build your New Strategic Offering Bundle Build your New Strategic Offering Bundle Develop your new bundle of products/services Develop your new bundle of products/services Package it Package it Take it to the marketplace Take it to the marketplace

10. The Cirque du Soleil Strategy Canvas (ref “Blue Ocean Strategy” – Kim & Mauborgne)

11. Now It’s YOUR Turn!

12. Getting “Buy In” Staff Workshop – Part 1 – Setting the Stage Staff Workshop – Part 1 – Setting the Stage How are we feeling about our competitive position? How are we feeling about our competitive position? What would it mean to us collectively and personally if we could improve our competitive position? What would it mean to us collectively and personally if we could improve our competitive position? What are we prepared to do, to get there? What are we prepared to do, to get there? “Are we in this together? (the precondition of strategy)” – David Maister “Are we in this together? (the precondition of strategy)” – David Maister

13. Getting “Buy In” Staff Workshop – Part 2 – Blue Ocean Strategy Staff Workshop – Part 2 – Blue Ocean Strategy Theory of Blue Ocean Strategy Theory of Blue Ocean Strategy Current Factors of Competition in the Industry Current Factors of Competition in the Industry The 4 Actions Framework The 4 Actions Framework Your new Strategic Offering Bundle Your new Strategic Offering Bundle

14. Making it Real The work of taking the ideas and making them real: The work of taking the ideas and making them real: Operating procedures and policies Operating procedures and policies Pricing Pricing Compensation implications Compensation implications Internal documentation Internal documentation Promotion plan, including marketing Promotion plan, including marketing Legalities Legalities

15. Consistency “You can’t achieve a competitive differentiation through things you do ‘reasonably well, most of the time.’” (David Maister, Strategy & the Fat Smoker) “You can’t achieve a competitive differentiation through things you do ‘reasonably well, most of the time.’” (David Maister, Strategy & the Fat Smoker)

16. Considerations Change is never easy - old habits die hard, particularly with the more established consultants Change is never easy - old habits die hard, particularly with the more established consultants Keys to success: Keys to success: An inside champion An inside champion Continual communication Continual communication Consistent inspection Consistent inspection Positive reinforcement Positive reinforcement Client QC calls on successful AND unsuccessful assignments Client QC calls on successful AND unsuccessful assignments Formal review 3 months out Formal review 3 months out

17. Summary You CAN achieve long term competitive differentiation (BRAND), but it will take: You CAN achieve long term competitive differentiation (BRAND), but it will take: Dreaming Dreaming Discussion and buy-in Discussion and buy-in Staff work Staff work Consistent delivery Consistent delivery “If you can dream it, you can do it” – Walt Disney “If you can dream it, you can do it” – Walt Disney Dreams aren’t things to be wishes for, but worked for. Dreams aren’t things to be wishes for, but worked for.