In a little more than a decade, the U.S.-based financial information provider, Bloomberg became one of the largest and most profitable business information providers in the world.
Until Bloomberg’s debut in the early 1980s, Reuters, Dow Jownes and Telerate dominated the online financial information industry, providing news and prices in real time to the brokerage and investment community. The industry focused on purchasers —IT managers—who valued standardized systems, which made their lives easier.
Bloomberg saw that it was traders and analysts, not IT managers, who make or lose millions of dollars for their employers each day. Profit opportunities come from disparities in information. When markets are active, traders and analysts must make rapid decisions. Every second counts.
So Bloomberg designed a system specifically to offer traders a leap in value, one with easy-to-use terminals and keyboards labelled with familiar financial terms. The systems also have two flat-panel monitors so that traders can see all the information they need at once and built-in analytic capability with the press of a button.
By focusing on users, Bloomberg was able to create a blue ocean of strong and profitable growth. Traders and analysts have tremendous income but work such long hours that they have little time to spend it. Bloomberg decided to add information and purchasing services aimed at enhancing traders’ personal lives – services to purchase gifts, make travel arrangements, or search real estate listings.
By shifting its focus upstream from purchasers to users, Bloomberg created a strategic profile that was radically different from anything the industry had seen before. The traders and analysts wielded their power within their firms to force IT managers to purchase Bloomberg terminals.