Is your business struggling to stay afloat in an overcrowded industry? Has fierce competition impeded your company's ability to move to the next level? What if there was a way to make your competition irrelevant? A way to have the market all to yourself? This is exactly what Blue Ocean Strategy is all about – creating an uncontested market where your business can thrive.
Sound too good to be true? Not for the numerous successful businesses that have already made their way to the top of a market all to themselves.
Red Ocean Versus Blue Ocean
Nearly all businesses today find themselves swimming in a Red Ocean. In other words, they are competing in an aggressive market with many sharks all trying to capture as many fish as possible. While the demand may be high, the ability to capture even a fraction of that demand is nearly impossible.
The Blue Ocean market, on the other hand, doesn't just remove the competition, it makes it irrelevant. This means that your company offers goods and/or services that are so unique that there are no competitors. Instead, you have a wide-open blue ocean with no sharks, but plenty of fish.
Why a Blue Ocean Strategy?
W. Chan Kim and Renee Mauborgne developed the Blue Ocean Strategy after analyzing a hundred years' worth of strategic moves in more than 30 different industries. While this dynamic strategy is being used in more and more industries, Kim points out that "Our study shows that Blue Ocean Strategy is particularly needed when supply exceeds demand in a market." This makes sense because once a market becomes saturated, it is extremely difficult to achieve and maintain success.
There are two main ways for a company to create a Blue Ocean Strategy. The first way is to start an entirely new industry, such as Apple did when it started iTunes, which served as the first online music pay-per-service platform. The second way is to develop a specific good or service out of the existing market, such as when Ford began mass-producing the Model T. At the time, there were plenty of car manufacturers, but they all created custom car designs for wealthy consumers rather than catering to the everyday consumer. Ford made cars more affordable to working families and expanded into a completely new market.
How to Implement a Blue Ocean Strategy
Kim and Mauborgne created a platform to make it easier for business to develop their own Blue Ocean Strategy. They state that the process starts by looking at the buyer's value from a different angle by using the "Four Action Framework" points.
- Raise – the need to identify which buyer's value factors should be raised higher than the current industry standards.
- Eliminate – the need to identify which buyer's value factors are competed for heavily in the market and should therefore be eliminated.
- Reduce – the need to identify which buyer's value factors should be set lower than the current industry standards.
- Create – the need to identify which buyer's value factors have never been introduced into the market, but should and can be created.
These steps will force you to take a closer look at what factors really matter and what factors you are simply doing due to market demand and competition. It enables you to restructure how you determine buyers' value – to see the bigger picture – and to identify how to make your business not just stand out from the rest, but pull away into your own, untested market.
When heading into the Blue Ocean market, you need a new type of marketing strategy that speaks directly to the consumer. Your marketing strategy should focus more on explaining why the consumer needs your goods and/or services versus fighting for dominance over your competitors. That's why you need a marketing firm like Coredeca that understands the unique demands needed to be successful in a Blue Ocean Market.