Ever felt like you want out due to the cut throat and ever-increasing competition in your niche? You are not alone in this. In a world where the largest percentage of the market share is always monopolized by the big fish, the rest are left with no choice but to come up with better ideas, or close shop. No one opts for the latter if they can help it, so here’s something to think about:
What if you were able to make your competition irrelevant and reap all the profits?
The Blue Ocean Strategy is all about making your competition irrelevant by creating your own new market. Yes! You can still find new untapped markets today as this strategy challenges everything you have ever known or learned about strategic success. It provides a systematic approach to getting rid of competition by making it irrelevant.
Blue Ocean Strategy is a product of Renee Mauborgne and Chan Kim who are globally recognized management thinkers. The strategy is based on ten years of reviewing over 150 strategies in over 15 industries that have been active for not less than 100 years. Through what they gathered from their research, we learn that most companies are doing it wrong by trying to battle it out for already overcrowded market spaces. Here’s how you can make your competition irrelevant.
The strategy is pretty simple as it focusses on value innovation. Rather than spending all your resources and energies in the ‘red ocean’ where competition is stiff, you get to enjoy a free market in the blue ocean. The red ocean is where the competition is fierce; there are set rules and boundaries while the blue ocean is untapped market with no boundaries and regulations. In the digital world, this strategy could work well by allowing brands to rethink their value to their consumers. The goal of the Blue Ocean Strategy is to create demand in an uncontested market area. This is achieved by focusing on creating products/services for your customers as opposed to creating customers for your goods and services.
Canon displayed the Blue Ocean approach by pioneering the personal desktop copier industry: they shifted from targeting corporate customers to users
The Blue Ocean move has been successful in companies such as Canon, Cirque du Soleil, Starbucks, Nintendo Wii, Yellow Tail and Dingo among others.
However, the most notable and discussed example of the strategy being used is in the case of Cirque du Soleil. Cirque du Soleil was a traditional circus in the same niche with the likes of Ringling. Using the strategy, they were able to make astounding amounts of revenue that took other circuses nearly a century to achieve. Instead of trying to steal customers from the other circuses, they reinvented the whole circus concept by incorporating new themes targeting adults and people in the corporate world who wouldn’t mind spending extra for unique entertainment.
Starbucks is a great example for using Blue Ocean successfully in the modern world. While other coffee producers in the world were busy competing for the market share in regards to the primary competing factors such as pricing, location, quality and maybe quantity, Starbucks created a demand for other factors such as brand aspiration, customer service, and variety. Starbucks easily turned grabbing a cup of coffee into a lifestyle by incorporating new ideas such as music and wi-fi in their coffee shops.
Starbucks found their Blue Ocean space by creating a lifestyle in coffee consumption
These companies solved an existing problem that other businesses in their niche overlooked. They were able to capture untapped markets by providing new experiences to their customers- new experiences consumers don’t even know they’re missing.
It’s time to look beyond traditional, predictable market space and manifest new experiences.
Get those engines revving and encourage fresh ideas.