A PRACTICAL APPROACH TO BLUE OCEAN STRATEGY - PART 4 REACHING BEYOND EXISTING BOUNDARIES – Noncustomer Analysis

Every business has a specific customer segment they are focused on which meet criteria e.g. specific demographics or specific needs. This can be described as the existing boundary.

Reaching beyond existing boundaries therefore refers to reaching out to those who do not usually patronize these businesses products or services. They are referred to as noncustomers and are the key to unlocking the blue ocean.

This group called noncustomers is divided into three categories:

 First Tier Noncustomers

 Second Tier Noncustomers

 Third Tier Noncustomers

FIRST TIER NONCUSTOMERS

These are customers who currently patronize your business occasionally for the following reasons:

Lack of a convenient alternative

Geographical reasons i.e. the products cannot be found in their immediate vicinity and so have to travel to another region to purchase such products

 Financial Reasons – they have to save for a while to be able to afford the product

SECOND TIER NONCUSTOMERS

These are customers that know about the product or business and can benefit from it but intentionally refuse to use it either for reasons such as

 Religion

 Cultural background

 Financial reasons i.e. cannot afford it

 Age

 Personal taste

 Prior bad experiences or lack of user friendliness

 Perception of the business and what it stands for

 Geographical reasons – products cannot be found locally

THIRD TIER NONCUSTOMERS

These are those that do not know about the product and/ or know about the product but have no use for them. Examples are :

 Children and alcohol

 Illiterates and books

 The blind and movies

 OBJECTIVE OF NONCUSTOMER ANALYSIS

At each point in time the noncustomer segment far outweigh the current customers. The objective of noncustomer analysis are:

1. Identify these noncustomers

2. Identify their needs

3. Focus on the key commonalities across these noncustomers (desegmentation)

4. Unlock the Blue Ocean 

Below is a table depicting the output or outcome of the noncustomer analysis for Polo Ralph Lauren T shirts 

Having successfully identified the noncustomers by desegmenting the market the next step in the process of unlocking a blue ocean is to access the uncontested market is to analyze and identify the pain points in the buyer experience cycle. Look out for this in the next article in the series. 

"AS IS" STRATGEGY CANVAS

The strategy canvas can be described as a pictorial or graphical representation of a company or product in relation to its competitors identifying its place in the market. It provides the big picture enabling management to get know everything they need to know at a glance. It can be used as both a diagnostic tool i.e. to help identify the problem areas and as a therapeutic tool i.e. An action framework for building a compelling blue ocean strategy.

The strategy canvas is a graph with a horizontal and vertical axis, value curve and the key competitive factors. The cornerstone of the strategy canvas is the key competitive factors without which it would be impossible to draw the strategy canvas.

The advantages of a good strategy canvas are quite numerous some of which are:

1. It provides the big picture at one glance
2. Easier to communicate
3. Prevents misinformation from the mish mash of data provided by various departments with conflicting agendas and poor communication skills
4. Easier to understand
5. Engages more people and promotes creativity
6. Enforces the need for change

A common mistake made by management is to begin strategy formulation and implementation without first being crystal clear about the current situation. An “as is” strategy canvas is the strategy canvas drawn at the onset of Blue Ocean Strategy formulation to accurately assess the company’s products in relation to its competitors as at that period
 in time.


In order to effectively apply Blue Ocean Strategy to Polo Ralph Lauren T Shirts, it is imperative that the “as is” strategy canvas be drawn. The objective of this is to accurately assess it place in relation to its competitors based on the key competitive factors of the industry and determine their strategic profile.
The “as is” strategy canvas would also help detect how deep into the red ocean the Polo Ralph Lauren T Shirt line is.


The T shirt market can be divided into two classes. The high class and budget class. Examples are:
 High class
 Budget class

For the purposes of this “as is” strategy canvas Polo Ralph Lauren would be compared to one of its competitors in the high class (Tommy Hilfiger) and one of its competitors in the budget class (BYC).

The key competitive factors are factors the industry competes on and invests in. with regards to
Polo Ralph Lauren T shirts the key competitive factors are:

 Price
 Customization
 Prestige
 Variety of Designs
 Durability
 Online sales


From the “as is” strategy canvas above it is obvious that Polo Ralph Lauren is deep in the red ocean as its value curve closely mirrors that of other competitors in its class in the industry showing that they both invest approximately the same amount in the same key competitive factors.

The value curve shows no focus, no divergence and definitely doesn’t lend itself to a compelling tagline.
It also shows that Polo Ralph Lauren T Shirts would benefit markedly from the application of Blue Ocean Strategy to help them break away from the competition and create uncontested market space.





We have successfully completed the second step in creating a blue ocean strategy. the next step is an analysis of the noncustomers which is pertinent to unlocking the blue ocean. So look out for the next step in the series.