12 PUBLIC GAMING INTERNATIONAL • MARCH/APRIL 2023 PGRI INTERVIEWS Paul Jason: Most U.S. states, like Idaho, are still not allowing their state lottery operator to make the games available online. How does Blue Ocean Strategy apply when our freedom to innovate is being restricted in these ways? Jeff Anderson: An article in the WLA/ NASPL issue of PGRI magazine reminded me of Blue Ocean Strategy. The article was about a keynote speech at the World Lottery Summit in Vancouver. As the producer and director of Cirque du Soleil-Kurios, Michael Laprise wanted to modernize the traditional circus performance, sans animals, their trainers and rail cars. And boy, did he, overlaying a contemporary hero-quest story onto the performance. He drew inspiration from all quarters. Street performers who showed the way you can generously share your talent in new and fascinating ways. He leveraged a spirit of collaboration between everyone – performers, support teams, and audience ¬– to blow up the distinctions between merchant, partners, and audience. He inspired excitement by turning the impossible into the possible. And he talked about the rich framework that lotteries have to craft a story that moves the audience. It reminded me of the BLUE OCEAN STRATEGY APPLIED TO THE GOVERNMENT LOTTERY SECTOR Jeff Anderson Executive Director, Idaho Lottery PGRI Introduction: In their classic book, Blue Ocean Strategy, Chan Kim & Renée Mauborgne coined the terms ’red ocean’ and ‘blue ocean’ to describe the market universe. This was cutting edge stuff in 2005 when it was introduced. Given the explosion of games-of-chance options and the reshaping of consumer perceptions of gambling, Jeff Anderson and I think it is a good time to revisit this classic model for understanding the ways in which new markets are created. We also explored Daniel Burris’ Anticipatory Trend Modeling, Steve Jobs’ Thinking Different, and Simon Sinek’s focus on effective story-telling. And why it all comes back to the Blue Ocean mentality. And how this all applies to Lottery. Blue Ocean Strategy is about reimagining our business model, product/service differentiation, and unorthodox collaborations to open up uncontested spaces and create new demand. It is about creating value for the customer instead of focusing on the competition. It is based on the view that market boundaries are not a closed system and that industry structures are not cast in stone. Doing the same thing and expecting a different result is not the path to innovation and success. Those boundaries and structures must be reshaped by the actions and beliefs of the industry players who are creating our future. Red Oceans are the industries, the competitive landscapes, the consumer market-places, the business processes and strategies, all as they exist today. In red oceans, industry norms and boundaries are accepted, the conventional competitive rules of the game are followed, and the goal is to outcompete rivals in the known space to grab a greater share of existing demand. As the market space gets crowded, margins are squeezed and growth stymied. Products become commodities, leading to cutthroat competition. Hence the term red oceans. Continued on page 50
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