Monday, February 23, 2009

Blue Ocean Strategy for Golf and Picnics

Following up on the previous post about Blue Ocean Strategy by Kim and Mauborgne ( and how it applies to parks, below are two further examples of how this strategy has been applied at the Northern Virginia Regional Park Authority. Again, the basic idea is that to win you need to play a different game than your competitors. Instead of the red ocean of fierce competition, is you come up with a different value proposition for the customer. By doing this you can carve out a new niche in the market.

Building on the previous post about how Pirate's Cove employed a blue ocean strategy, this example of blue ocean strategy has been what we are doing with our larger picnic shelters. We use to just rent the shelter and did not think about the other issues that someone renting a space for 50 – 250 people faces. Now when someone rents one of these shelters, we ask if they would like us to cater the event for them, and would they like to have a moon bounce set up next to the shelter to entertain children. By bundling these services that this kind of customer might be looking for, we are helping the organizer of the family reunion, or company picnic do their job in an easy way. While we offer all the services at a hard to beat price, we capture much more total revenue for the park than if we left them to their own devices to arrange food and entertainment. The experience has been so good for the customer that most want to secure the same site the next year for a similar event.

By offering all the key services that the event planning customer wants in a one stop cost effective option, we carved out a unique niche that someone offering any one of the services can not easily compete with.

A third blue ocean strategy was the golf membership program we rolled out a few years ago at our three golf courses. Up to that point we had just offered daily fee 18 or 9 holes of play. With this model there was no reason for golfers to make our courses their primary course other than location and price. And when the weather turned bad we could loose most of our revenue until the sun shined again.

The blue ocean strategy was to offer an affordable unlimited play option for frequent golfers. We rolled out a membership program where for a fixed price ranging from around $1,000 to around $2,500 golfers could play at any of our three courses as often as they want ( This remarkable value attracted many takers. By having these golfers pay in advance for their yearly golf privileges, we gained both customer loyally and a degree of insurance against poor weather. We created a high value for a certain customer, and created a blue ocean space in the market.

The Regional Park Authority generates over 81% of our operating income from enterprise operations like these, and to remain healthy over the next few years we are going to need to continue to be leaders and innovators in our field, creating high value for our customers in blue ocean markets.

No comments: