Ang Magiting - The Official Web Site of Rotary Club Makati North

AN EXCITING MEETING!

By: Rtn. Daniel Wiedmer

This week’s program was very exciting, not only because of an outstanding guest speaker, but also because we had the chance to win invitations to spas, bottles of wine and a book on leadership edited by our own Vic Magdaraog The lucky winners were Chet Tan, Eric Natividad, Ian Alas, Ariel Rivera and Bob Hecks for the wine bottles, Dieter Brueckner, Joe Reano, Pabling Calma, Vic Magdaraog and Daniel Wiedmer for the spa invitations. Ric Dela Torre won Vic’s book on leadership, which contains a lot of inspiring examples of leaders in the Philippines – perfect material that Ric intends to use for the next LEAP congress.

Our guest speaker, former RCMN member Vicente R. Romano III, educated us about the Blue Ocean strategy. This strategy shows us that break-through growth is possible by creating uncontested markets, Blue Oceans.

Too many businesses have been focused on competitive advantage in the vein of Porter’s Five Forces. They are trying to apply differentiation, cost leadership or focus strategy, always obsessed with competitive advantage over rivals in the same industry. They are competing ferociously in the existing market place, the Red Ocean – like shark-infested water.

So how do you get away from the Red Ocean’s cutthroat competition, into an uncontested Blue Ocean? You create a new market space by recombining industries and innovating value. When a new market space is created, the differentiation strategy and cost leadership strategy can be pursued at the same time because competition is irrelevant (for a while at least). Examples of new markets created in the Philippines include C2, Boy Bawang, STI, and Lucky Me.

An international example is the Yellow Tail wine brand. In the wine market, everyone used to compete along established characteristics: price, taste, vineyard prestige, etc. Yellow Tail was able to create a new market from beer drinkers who want a fun and party experience, instead of going after those picky wine drinkers. They produced a wine with less taste and vineyard prestige than even budget wines, but could sell them for more by strongly emphasizing the Australian fun side (think of hats and kangaroos….). They created a new, uncontested market by selling to non-wine drinkers, making competition from other wine brands irrelevant. Their success was tremendous: they sold millions of bottles within a couple of years.

So how do we apply this to Rotary…..?