ROI Case File No.283 | 'DineWave's Voyage to the Blue Ocean'

Chapter 1: The Saturated Battlefield — Escape from the Red Ocean

The week following the resolution of LogisRent's TOC case, a consultation arrived from Kansai regarding a casual restaurant chain's new business venture. Episode 283 of Volume 23 "The Pursuit of Reproducibility - Sequel" tells the story of escaping a bloody competitive market to discover a blue ocean where no one else exists.

"Detective, our existing business is completely saturated. We operate 28 locations in the Kansai region, but we cannot differentiate from competitors and are trapped in price wars. We must create a new revenue pillar or we'll sink. But we can't see where to head."

DineWave's new business director, Mai Sato from Osaka, visited 221B Baker Street unable to hide her anxiety. In her hands were graphs showing ten years of flat existing business performance and, in stark contrast, a blank new business plan.

"We operate casual restaurants in Osaka. We've been serving families with affordable meals. But now, the market is completely saturated."

DineWave's Business Stagnation: - Founded: 2012 (casual restaurant chain) - Locations: 28 stores (Kansai region) - Annual revenue: $35 million (flat for 10 years) - Operating profit margin: 3% (below industry average of 5%) - Competition: Similar chain stores crowding the same markets - Price war: Average lunch price $8.20 → $6.50 (20% decline in 5 years)

Deep crisis showed on Sato's face.

"The problem is that the market we're fighting in has become a 'sea of blood.' Same business format, same menu, same prices. When we try to differentiate, competitors immediately copy. When we open a store, competitors open next door. When we lower prices, competitors lower more."

Red Ocean Battle: - Differentiation strategy: "Domestic ingredients" → Competitors adopt in 1 month - Price reduction strategy: Lunch $7.30 → Competitors counter at $6.50 - New menu: "Seasonal limited menu" → Competitors launch similar - Store opening: Enter new market → Competitor opens in 3 months - Result: All strategies copied, differentiation impossible

Management's Confusion: - Plan 1: "Shift to premium" → Risk losing existing customers - Plan 2: "International expansion" → Lack of capital and know-how - Plan 3: "M&A for scale" → Competition remains intense - Plan 4: "Complete withdrawal" → 420 employees lose jobs

"We want to start a new business. But we don't know what. We have a vague direction of 'AI utilization,' but no concrete strategy."

Chapter 2: From Red Ocean to Blue Ocean — Creating Competition-Free Markets

"Ms. Sato, what criteria guide your current new business considerations?"

To my question, Sato answered.

"Basically, we're searching for 'growth markets.' AI is a growth field, so we want to start something AI-related. But we haven't decided what specifically. AI diagnostics, AI customer service, AI cooking... Ideas emerge, but competitors have already entered all of them."

Current New Business Consideration (Entering Competitive Markets): - Direction: Growth markets (AI, DX, healthcare, etc.) - Assumption: "If we enter growth markets, we'll grow" - Problem: Growth markets are already swarming with competitors - Result: Moving from one red ocean to another

I explained the importance of competition-free markets.

"Entering growth markets and succeeding are different. Blue Ocean Strategy—avoid the blood-soaked red ocean where competitors swarm, and find the blue ocean where no one exists. There, value creation matters, not competition."

⬜️ ChatGPT | Catalyst of Concepts

"Don't fight competitors. Create a place where competitors don't exist. That's Blue Ocean."

🟧 Claude | Alchemist of Narratives

"Those who fight in the red ocean get stained with blood. Only those who find the blue ocean sail clear waters."

🟦 Gemini | Compass of Reason

"Blue Ocean is not discovered but created. Redefine existing value and carve new markets."

The three members began analysis. Gemini deployed a "Restaurant Industry-Specific Blue Ocean Strategy" framework on the whiteboard.

Blue Ocean Strategy's Four Actions: 1. Eliminate - Remove elements the industry takes for granted 2. Reduce - Decrease below industry standards 3. Raise - Increase above industry standards 4. Create - Generate new elements the industry lacks

"Ms. Sato, let's discover the blue ocean DineWave should create."

Chapter 3: The Unexpected Intersection — The Unexplored Domain of Dining × Security

Phase 1: Inventory of Own Assets (1 week)

First, we visualized DineWave's "invisible assets."

DineWave's Assets: - 28 stores as real-world touchpoints (1.2 million annual visitors) - 48% elderly customer ratio (families + seniors) - Community trust relationships (average customer history 8.2 years) - 420 staff members' field response capability - "Safety and security" brand image

Phase 2: Discovering Customers' Latent Problems (2 weeks)

From store conversations, unexpected issues surfaced.

Elderly Customer Voices (50 interviews): - "Recently, scam calls have increased and are frightening" (38) - "I almost wired money to someone claiming to be my son" (12) - "I wish someone I could consult was available" (42) - "Banks are cold. But people at this restaurant are kind" (35)

Discovery: DineWave's customers sought not just a "dining place" but a "safe haven."

Phase 3: Blue Ocean Hypothesis Construction (1 week)

We designed a new market with the four actions.

Existing Dining Business: - Value provided: Meals - Competition factors: Taste, price, location, service - Market: Red Ocean

New Business Hypothesis: "Safety Service Protecting the Dining Place"

1. Eliminate: - Advanced technical support (unnecessary for elderly) - Complex setup procedures (difficult to use)

2. Reduce: - Price (50% of existing security services) - Functions (specialize in fraud detection only)

3. Raise: - Human support (store staff response) - Peace of mind (familiar staff available for consultation)

4. Create: - Security service provided by restaurants - AI real-time fraud detection + store staff monitoring - Fusion of "dining place" and "security"

Phase 4: Detailed Service Design (1 month)

Service Name: "Mamori Dining"

Service Content: 1. AI fraud detection app (simple design for elderly) - AI judges fraud possibility during incoming calls - Large screen display: "This is a suspicious call" - Recording function for evidence preservation

1. Store staff monitoring
2. Monthly check during visits: staff ask "Any strange calls recently?"
3. Consultation available at stores when troubled

4. Contact police/family as needed

5. Family linkage function

6. Notify family of parent's phone situation
7. Alert: "A suspicious call occurred"

Pricing: - Monthly $8.20 (half of existing security services) - First month free for DineWave restaurant users

Target: - 60+ years old living alone/elderly households - Their families (children/grandchildren generation)

Competitive Analysis: - Security company services: High price, no store support - Police awareness activities: Post-incident response only - Family monitoring: Physically difficult - Competition: Nearly zero (Blue Ocean)

Chapter 4: Voyage to the Blue Ocean — From Pilot to Full-Scale Deployment

Phase 5: Pilot Validation (3 months)

We started a trial operation at three Osaka stores.

Pilot Results: - Registrants: 180 (42% of elderly customers at 3 stores) - AI detection performance: 68 suspicious fraud calls detected - Damage prevention: 2 cases (estimated damage prevented: $60,000) - Customer satisfaction: 4.8/5 - Retention rate: 94% (after 3 months)

Customer Testimonial:

User (72-year-old woman): "Recently, someone claiming to be my son called. The app warned 'High fraud possibility.' I consulted the store manager. We reported to police and prevented damage. This restaurant saved not just a meal but my life."

Her Family (daughter, 45): "I live in Tokyo and can't monitor mother. But DineWave staff check on her monthly, giving me peace of mind. Mother is also pleased to have 'trustworthy people nearby.'"

Phase 6: Technical Feasibility Verification (Parallel Implementation)

We established AI accuracy and operational structure.

AI Fraud Detection Mechanism: - Voice recognition analyzes call content - Detects keywords: "money," "transfer," "tax refund," etc. - Analyzes voice tone and speech patterns - Cross-references with police fraud case database - Judgment accuracy: 92% (after 3 months of learning)

Store Staff Training: - Fraud methods and responses (police cooperation) - Communication training with elderly - Privacy consideration and personal information protection

Phase 7: Full Deployment and Monetization (6 months)

Following pilot success, we deployed to all 28 stores.

Results After 6 Months:

User Numbers: - Registrants: 2,850 - Monthly subscription revenue: $23,400 - Annual revenue: $280,800

Ripple Effect on Existing Business: - Registrant visit frequency: 2.1/month → 4.3/month (2x) - Average spending: $10 → $12.30 (longer stays) - Referral-based new customers: 38/month average - Contribution to existing business: +$683,000 annually

Social Impact: - Fraud damage prevention: 18 cumulative cases (estimated $450,000) - Police cooperation: Appreciation from Osaka Prefectural Police - Media exposure: Featured on NHK, Yomiuri Shimbun, etc.

Brand Value Enhancement: - Image established: "Company protecting not just meals but community" - Job applications: 1.8x ("Socially contributing work") - Corporate image survey: #3 "Trustworthy company" (Osaka dining industry)

Comprehensive Results After 12 Months:

New Business (Mamori Dining): - Registrants: 5,200 - Monthly revenue: $42,500 - Annual revenue: $510,000 - Operating profit margin: 62% (20x existing business)

Positive Impact on Existing Business: - Annual revenue: $35M → $40M (+14%) - Operating profit margin: 3% → 8% - Customer loyalty: Significantly improved - Brand value: Established as "company needed by community"

Competitive Landscape: - Similar services: Zero (complete Blue Ocean) - Entry barriers: Combination of store network × trust relationships × AI technology

Chapter 5: The Detective's Blue Ocean Diagnosis — Strategy That Nullifies Competition

Holmes compiled the comprehensive analysis.

"Ms. Sato, Blue Ocean Strategy's essence is 'nullifying competition.' Not fighting competitors, but creating a place where competitors don't exist. DineWave sailed from the red ocean of dining to the blue ocean of dining × security. There, only value creation exists."

Final Report 24 Months Later:

DineWave established a new position as "the restaurant company protecting communities" in Kansai.

Final Results: - Annual revenue: $35M → $52M (+48%) - Mamori Dining registrants: 5,200 → 18,500 - New store openings: 28 Kansai stores → 48 nationwide - License partnerships from other companies: 12

Sato's letter expressed deep gratitude:

"Through Blue Ocean Strategy, we transformed from a 'company fighting competitors' to a 'company creating value.' Most important was abandoning the assumption that 'restaurants serve meals.' What our customers truly sought was not the 'thing' of meals but the 'experience' of a safe haven. Now when considering new businesses, we always ask 'Can we create a competition-free market?' We understand that blue oceans are not discovered but created."

The Detective's Perspective — Avoid Red Oceans, Create Blue Oceans

That night, I reflected on the essence of competition and value creation.

Blue Ocean Strategy's true value lies in transforming perspectives. Most companies search for growth markets and try to enter them. But growth markets are already swarming with competitors.

True strategy is creating markets. Redefine existing value and solve customer problems no one has noticed. There, competitors don't exist, and price wars don't occur.

"Those who fight competitors exhaust themselves. Only those who create places without competitors enjoy the voyage."

The next case will also depict a moment when Blue Ocean Strategy carves out a company's future.

"Those who fight in red oceans get stained with blood. Only those who create blue oceans sail clear waters."—From the detective's notes

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