This is the summer version of STRTGY Notes, the popular 1,000-word newsletters that more than 1,400 professionals and entrepreneurs read to understand how to unlock the innovative potential of the organizations they work with every day and create the next competitive advantage.
Hey, happy Monday!
Last week I posted on the channels Instagram e Facebook of STRTGY a photo of a camera developed by a French startup called PIXII on the occasion of the market launch of its first and only model.
The PIXII is a very unusual digital rangefinder camera:
- It has no screen in which to see the pictures, the screen is in fact your cell phone
- The experience is fully mobile first
- You can use compatible rangefinder optics (not just Leica)
- Does not have SD card or expansion slot
- It has a beautiful design, won the Red Dot Design Award
- It costs about €3,000
For strategy-nerds like us, this immediately rings a bell.
This launch has all the hallmarks of a Blue Ocean strategy. And since everyone seems to have read the book by W. Chan Kim and Renée Mauborgne but no one seems to recognize Blue Ocean products when they encounter them, so I decided to take the ball and briefly reverse engineer the strategy Pixii seems to have adopted so far.
Obviously this is a super-simplified and simplistic version of the matter, but hopefully effective.
Disclaimer: I have no relationship with the brand.
What is the Blue Ocean Strategy
If you are unfamiliar with it, the Blue Ocean Strategy is a strategic scheme that helps companies bring such a high value and differentiating offering to market that price is no longer the sole driver of purchases that unlike competitors, in the undifferentiated red ocean, are forced to discount and thin their revenues in order to steal market share.
The Blue Ocean Strategy can be applied to any industry as long as it has a management that is aware of the path it decides to take and is a leader of a necessary change in mindset: it is not necessary to fight competition because it is possible to neutralize it, that is, to make it irrelevant in the eyes of customers.
The three main tools
➀ The Strategic Framework.
You’ve probably seen that graph that looks like an equalizer. It’s called Strategic Framework and allows you to take a snapshot of the current known market space. Let’s look at what I designed for Pixii to understand how it works and how you can create one for your business.
On the horizontal axis, one must list all the factors on which the entire industry takes investment for granted.
On the vertical axis one must mark a dot whose height indicates how well a particular company is performing relative to a category of competitors.
What comes out is a graphical representation of the strategic profile of the initiative in relation to the performance of the competition. It is called value curve.
For the hi-end camera market, it is easy to see how all the compete for:
- Large, jointed and touch screens
- Proprietary lens system
- Ability to record video at high resolution and speed
- Sensors
- Etc…
It is easy to visually notice how Pixii’s value curve is completely different from that of other high-end cameras.
➁ The framework of the four actions.
If you draw your strategic framework correctly, it is very easy to identify the four key actions you need to take to implement the strategy. Here’s what Pixii basically did.
ELIMINATE
Pixii decided not to have an LCD screen so much you can use your cell phone which has a better screen for sure.
It has also decided not to have a proprietary lens offering; indeed, this will be one of its strengths.
It even chose not to record video. But also (they are not marked in the chart) not to have expansion slots for internal memory, or connection interfaces such as HDMI and microphone…
REDUCE
Eliminating these things has been able to allow some aspects such as weight to be reduced well below the industry standard, thanks to simpler hardware, and software to manage the machine itself, saving in engineering costs.
He also decided to settle for a smaller sensor with fewer megapixels but more than sufficient performance digital photography.
RAISE
He thus decided to raise the price over a camera with these features and elevate the aesthetics while also winning an international award.
He also focused on extending compatibility with analog rangefinder lenses by even choosing the classic Leica bayonet and a series of adapters.
The smaller sensor serves just that.
CREATE
Pixii has been good here. But I must admit that I had to go and read some of the founder’s interviews to understand more about it.
Essentially the camera was built this way to simply be a no-frills but high-quality tool for recording images on the sensor and transferring them to the cell phone. It is the app actually the software that manages the quality of the images, unlike other cameras with cutting-edge processors and algorithms sewn into the electronics.
This is a much more efficient, though cheaper, solution because when you change smartphones you will not only have a better screen but also a new camera!
In addition, Pixii immediately gave created value for all those who have optics from their analog kit that they can finally use.
➂ Talking to non-customers.
Pixii is not aiming at the very loyal Leica customers who would be unlikely to change their opinion even if this camera costs half as much as an equivalent Leica because Leica also has a super-bodied rangefinder but without a screen: it is called the M10-D and new it costs about €7,000
Pixii is aiming at all those (like me ☺️) who are fond of analog photography, have moved to digital to an unhealthy degree with solutions that do not satisfy them, but most importantly can immediately reevaluate the obsolete but beautiful optics they no longer use.
Watch the full review of 35mmc which has mounted an excellent Zeiss Biogon.
To recap
This analysis barely scratches the surface of the topic, I realize. But I promised you, and I wanted to show you that while Pixii and Leica may seem to be competitors, with very similar products, in fact they are not. They have two completely different markets!
I have no idea whether or not the project will be successful.
What I do know for sure, however, is that you can apply this framework in any area.
You can buy the book and try to do it yourself or you can ask for support from a counselor who really knows what he or she is talking about. In that case, go ahead and search STRTGY.
Let me know what you think and if I can help you in any way.
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