Chartering Dell’s Course To Blue Ocean Sailing

Looking for Blue Oceans but Sailing in the Wrong Direction
I am encouraged by Dell’s attempt to follow Blue Ocean thinking, but they are treading in the wrong direction.  Dell’s proposed MP3 player is the right idea of using software as a service enabler, but to find a Blue Ocean, Dell should look at other consumer-oriented areas that wrap services around hardware. Potential markets include techno-phobic consumers within emerging hardware and software technologies—these groups require simplified solutions. Dell could look to ancillary products or services for less-contested consumer spaces and develop services that integrate user-friendly hardware or software solutions – Apple’s whole business orientation is predicated on this paradigm.

Exploring Commercial Blue Ocean Space
As for Dell’s core market, there are still many Blue Oceans which await in the commercial space.  Dell can still look to commercial-user problem areas that would benefit from software and service solutions.  This space has many holes: Microsoft is a generic provider of software, and consultancies such as Accenture offer expensive and highly customized solutions.  A niche for Dell to explore might be small and medium businesses seeking a hybrid solution of customized applications and services.  Michael Dell pioneered this business model with customized PCs to start Dell.  As Michael Dell visits more Blue Seas to continue Dell’s growth, he may discover that the closest Blue Water is a commercial Blue Ocean.  His search for “consumer” Blue Oceans may eventually prove fruitful if he sails in the right direction. 

Do you think it is a trip he should take?  Should Dell navigate a safer path into the other regions of the “commercial sea”?  Which way would you go? Or would you split the armada and explore both directions?

I am willing to talk with blog participants live via phone for free consultations.  I am also available to companies, businesses and organizations for consulting engagements and speaking opportunities.  For any of these request, E-mail me .  I will help my readers in any way possible – I want to share my knowledge and expertise.

Mike Bolden marketing expert and blue ocean strategist – writing to inform, enlighten, and inspire.  Author of forth coming book, “Owning Marketspace”.  Available for consulting and speaking engagements.

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Dell to Re-Enter iPod Arena – Blue Ocean Intentions, Red Ocean Waters

Dell’s MP3 Player
Recently, Dell has been testing a digital music player that ties to software for a range of portable PCs and lets users download and organize music and movies from various online sources.  According to the Wall Street Journal’s July 30th Market Section, the software would connect the device to an online subscription service that Dell expects to launch later this year.  The key advantage of Dell’s MP3 Player will be that it allows consumers to download songs and movies, and then move them between devices like PCs and cell-phones.  Apple’s digital music strategy doesn’t always allow this functionality.  Michael Dell is trying to move out of the Crimson Red Ocean of PCs into a broader range of consumer markets.  The problem is that he has picked an Ocean within this space which is also red, and not blue.

Apple Owns the MP3 Player Marketspace
Companies that dominate other arenas, such as Sony and Microsoft, have tried to move into the MP3 Player marketspace, and they have failed miserably here.  Quite simply, Apple owns this marketspace!  According to the industry analyst NPD Group, Apple owned 71% of the MP3 player market in the 1st quarter of 2008.  Its closest rival, SanDisk, had 11%, while software heavyweight Microsoft had a 4% market share with the Zune.  This is textbook domination and the type of market share I discuss in my forth-coming book, Owning Marketspace. 

Because Apple is so dominant in this market, even a peripheral attack is inherently a Red Ocean.  If Dell wants to think Blue Ocean via consumer markets, it should look elsewhere.  While the MP3 player market is a large and lucrative space, it’s maturing quickly and is blue only to Apple.  Moving into it and competing with Steve Jobs will require a massive amount of resources, especially in marketing – an area where Apple excels.

I am willing to talk with blog participants live via phone for free consultations.  I am also available to companies, businesses and organizations for consulting engagements and speaking opportunities.  For any of these request, E-mail me .  I will help my readers in any way possible – I want to share my knowledge and expertise.

Mike Bolden marketing expert and blue ocean strategist – writing to inform, enlighten, and inspire.  Author of forth coming book, “Owning Marketspace”.  Available for consulting and speaking engagements.
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