Sunday, December 1, 2013

Library and Blue Ocean strategies (I) - the case of discovery services

As part of a new goal to start reading sources outside the library world for ideas, I have been reading Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant and I must say it is surprisingly insightful.

For those unfamiliar with the concept, blue ocean strategy contrasts with red ocean strategy, where firms in the industry compete head-on among traditional lines.

They typically compete along price lines or the same traditional factors/attributes that the industry always competes along, competing for the same market user base that may be static or even declining. This results in declining profits among firms in the industry as costs rise fighting for the same consumer dollars.

A blue ocean strategy, aims to make the competition irrelevant. A pithy line in the book says "The only way to beat the competition is to stop trying to beat the competition".

That sounds paradoxical, but only if you define "beat" in a limited way, competing along the usual industry defined lines. The insight (in some ways obvious) is that firms should instead  try to create brand new markets.

One example that is often used is that of Cirque du Soleil. Apparently the circus industry as a whole was shrinking, as kids began to prefer Console games, internet etc to visiting the circus. There was a limited number of famous circus performers (who weren't that famous anyway), so circuses competed to employ them raising the costs. Animal rights activists also made acts with animals increasingly difficult and expensive.

What Cirque du Solei did was that instead of competing along the usual circus industry factors of

i) price
ii) Star performaners
iii) Animal shows


Cirque du Solei changed the rules of the game. They started to blend drama and theater with their acts, blending circus with classic theater. By offering more intellectual experiences, they opened the market drawing in theater going audiences.

Adding of storylines, themes, and increasing the allure of the circus top tent, they created a brand new industry spanning/breaking market across theater and circus with multiple productions like that of broadway shows.

It was not just adding or raising new factors, they also reduced and eliminated attributes that had high cost.

For example, they eliminated animal shows, the need to hire top traditional circus acts, bypassing the whole problem of increasing costs there.

This is what the book calls "value innovation" - innovation that creates more value for consumers but at lower cost, breaking the age-old value vs cost tradeoff.

As the book was written in 2004, some of the examples look dated to my eyes, a more modern example would be Apple of course.

I am still absorbing the framework and analytic tools in the book to employ blue ocean strategies but I think the idea of blue ocean strategies is very important for libraries.

There are differences, libraries don't really compete with each other in the industry but our competitors are Google etc and we don't really have profits but still let's see what we can learn when we apply such tools.

I think like most industries we have always focused on red ocean strategies , basically how to make existing processes better. We are good at tracking how input and output statistics, at doing process improvement processes etc. Increasingly, we do bench-marking studies which focuses more on what other libraries are doing and making sure we do the same.

Red Ocean strategies are important no doubt and they will be always be the bulk of our strategies. But they won't suffice alone.

This is particularly so since our industry is similar to that of the circus industry, where the industry market demand is falling as users start to prefer other alternatives rather than those of ours.

In such a situation, doing the same thing better with incremental improvements isn't going to help. If anything we are in this situation because our competitors such as Google are employing blue ocean strategies on us!

So we need blue ocean strategies to create new ideas and strategies to open new markets, rather than hope to thrive by refining existing processes. We need to know what new things to do, not just how to do existing things better.

The most innovative thinkers in our industry have come up with a slew of ideas from

  • Library as a publisher
  • embedded librarianship
  • Maker spaces
  • Supporting data research management etc
  • Increased focus on information literacy etc
How did they come up with such ideas? Are they viable? In future posts, I will try to apply the various analytical frameworks in the book such as the ERCC grid, six path frameworks and strategy canvas to find blue ocean strategies.

But for now, let me try to analyse a purely business decision, the strategic move to launch web scale discovery services.

As you know, web scale discovery service has swept the academic library world since 2009, with most academic libraries having implemented one or thinking of implementing one.

Summon alone boasts 700 over customers, and others like EDS , Primo Central boast enough more. 

It's fair to say the strategic move to launch web scale discovery service can be considered a blue ocean strategy by Proquest etc creating a brand new market where none existed before.

A good way to look at this is using a strategic canvas, listing the main factors of the industry.

Producers in the aggregator database industry were basically competing on content and feature sets of the interface, and to some extent price.

Signing up content providers to carry their full-text was costly especially from premium names and so was the constant creation of advanced feature sets that required a lot of training to use by corporate trainers and librarians.

At the other extreme, Google was drawing in users, because the ease of use, and large result sets (not all of which was scholarly). 

Web scale discovery is based on the insight that one can provide a industry spanning product which offer the best of both worlds.

The value curve above shows web scale discovery  vs academic databases vs Google.

A good blue ocean strategy exhibits 3 characteristics, focus, divergence and a tagline. 

This blue ocean strategy exhibits focus

It turns out very complicated interface features alienated a large proportion of the user base, so web scale discovery services like Summon dispense with all but a well selected set of features, directing sophisticated users to use traditional databases for more complicated needs. (Other competitors like Ebsco, ExLibris, repurpose existing UI, also reducing cost)

It would have being prohibitively costly to try to shoehorn all the different sources of data into complicated feature sets so this works out nicely anyway.

You see divergence in the value curves of web scale discovery and traditional databases, discovery services raise the factors of ease of use compared to library databases as well as authoritativeness of results compared to Google. Throw in the addition factor of including the library catalogue - "The one search" concept and you have a unique value curve.  

Lastly, the tagline for web scale discovery could have been "Google but for academic content"- a concept that captured the hearts of both undergraduates (the actual users) and librarians (the influencers), creating a brand new market by spanning the web search industry and the traditional library database market.

One can quibble about how accurate this analysis is. For example, is it really less costly for Proquest etc to sign up providers to add content to the discovery index as compared to including the content full-text in the database? (There are well known issues about content providers refusing to provide content to discovery indexes). 

Is the "low price" factor in the value curve above really correct? (Web scale discovery services are often priced very high to libraries depending on the product but I suspect this boils down to the strategic decisions of the major players, the discovery vendors that hope for lock-in may price low).  

Lastly, while web scale discovery could be said to be a blue ocean strategy for Proquest when they initially launched Summon, they were closely followed by competitors and currently, there is bloody competition.....
Still from the point of view of libraries, I think this analysis leaves out the elephant in the room - Google Scholar. Google Scholar is in fact the prototypical "web scale discovery", offering the speed and ease of use of Google with "Scholarly results" and Google got there first.

If once we include Google Scholar in the analysis, arguably - web scale discovery is in fact a red ocean strategy, a direct clash with Google. Is this a battle we (by we I mean the whole library industry) can win?

There are some libraries who think we can't and this brand of thinking where the idea of opting out because Google has won already has become popular lately, 

From the point of discovery vendors though, it was a successful blue ocean strategy because the influencers ie the librarians in the buying process tend to have a mistrust of Google and do not include Google Scholar in their analysis, because it is not something we can actually buy...

But as time passes, the direct buyers, our users may exert a influence that might make us to reconsider.

Of course, the race is now on, how does one craft a blue ocean strategy to create a unique value curve to differentiate between Google Scholar and say Summon?

That's the subject of a future post.

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