To stand out in the marketplace, we must create a unique market space known as a blue ocean
The business world is fiercely competitive, and upcoming companies get crushed under existing competitors’ immense weight. New companies attempt to copy the existing ones and end up in a losing battle with more established firms with bigger capital. The common market space is a red ocean, while whichever company comes with an alternative twist to the status quo is a blue ocean.
To avoid getting outmuscled by much stronger competition, one must create a unique market or niche to operate in. A blue ocean is an uncontested market space, a new product that captures the existing customer base and offers them something familiar and refreshingly new. A red ocean is the already existing market space, the big-money companies that have set a standard for others to compete. While the red ocean has a restricted scope, the blue ocean presents an unknown and vast range of possibilities.
A blue ocean company thrives because it employs a strategic move. A strategic move is the series of managerial actions and decisions involved in making a primary market-creating business offering. The activity that makes blue ocean businesses successful is “value innovation.” This consists of creating value with products that are leaps and bounds beyond the existing market’s supply scheme.
The Blue ocean strategy involves rapid and novel techniques that create new content that provides increased value and innovative breakthroughs. For a blue ocean business to be successful, it must avoid making innovation with value or vice versa. A company that emphasizes value creation without innovation will fail to stand out in the market. In contrast, those that focus more on innovation without value will alienate the current market consumers. The key to success with the blue ocean is balancing both value and innovation to stand out and offer lasting value. We seek to equip new businesses with the cutting edge in beating the market by creating a “blue ocean.” You will learn how to create unique business ideas and how to keep them relevant through creating value.
To effectively create blue oceans and blue ocean strategies, one needs some essential tools
There are various analytical methods for creating blue oceans with one key thing in mind: “risk minimization.” These methods wholly appreciate the factors that affect the market directly and find ways to use the information to create value and innovation.
First, you must identify the factor in the already existing market that the industry is all too familiar with. To distance your business from the existing competitors, you want to eliminate factors they’d usually employ. This way, your business will not be prone to the pitfalls that strike the competition.
Next, you must identify the industry’s standards and seek to ensure your product doesn’t match or surpass it, but instead falls well below it. Identifying the standards means investing less in the market’s factors and focusing on novel ones that will set it apart from the rest.
Now you can identify which factors the industry barely pays any attention to and raise it above the industry’s standards. You can place yourself above the rest and cash in on a space that has been untapped and undiscovered and use it to your advantage.
Lastly, you can now create a new set of factors for the market; this way, you create within the consumer a new craving, thereby creating new demand. You would have effectively given the consumers a new need they never thought they had. Instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.
With this four-pronged approach, you would effectively create a sound business plan that is both distinct and unique. A good strategy must focus on its goals and values; it must also not copy the existing process and have a catchy ad tagline.
It is essential to create viable strategies that guarantee market dominance
To effectively formulate or create the blue ocean strategies, you must employ vital strategic guidelines. There are six methods/procedures used to develop sustainable and profitable blue ocean strategies:
It is imperative to identify the market and focus on being the best.
Find an alternative to the current services offered, and this should not be confused for a substitute since a substitute can quickly lose value if the initial steps up their game. An alternative is a different industry that offers similar services but in contrast to the status quo.
Observe the competition and pick out the areas they thrive and seek dominance in those areas.
Suppose you desire to succeed in a particular strategic group. In that case, you must pick apart the normal operational parameters and provide users with the same value and service but for less cost.
Focus on buyer groups: purchaser, user, influencer.
There are three buyer groups, of which each is targeted differently and by different strategic groups. The purchaser is for the corporate sector. The influencer refers to the group that relies more on expert advice before purchasing. The user refers to the direct real-time consumers of the products available in the market.
Define the scope of products/services offered similarly by the industry.
The market has many players that provide a particular service, and as they increase in number, the target group reduces, causing a drop in revenue. But here’s where the blue ocean comes in, to avoid getting dragged in competing for limited space, create a complimentary service instead.
Come to terms with the industry’s practical and emotional orientation.
To create a blue ocean company in this atmosphere is to forge an idea that caters to both the emotional and functional needs of the consumers.
Take into consideration the current state of the market at that time and the competitive threats.
You have to identify a recent trend in the market and predict how well a business will do in the coming years with the aid of present factors and possible movement changes over time.
Practical applications of the blue ocean strategies
To effectively align the blue ocean strategies, one can formulate a strategy canvas, which consists of a fourfold approach that will help visualize its current and proposed final states:
First is the visual awakening. This refers to a sort of awakening, one that disabuses the minds of company executives of the idea that their current plan is working and will keep working. It prompts the need for change, the change needed to create a blue ocean.
Then, there is the visual exploration that involves fieldwork, sending out managers to personally investigate how their products/services fare among the users or whether they use them.
After which, the managers would present their findings at a gathering within the company consisting of competitors also. It is known as a visual strategy fair; this meeting helped remove the rigors of in–house politics and opened the door to consumers’ opinions. The managers pitched their findings and ideas they birthed.
Once you’ve gone through these three stages, you must by now have formed a logical strategy befitting of your company’s value projections.
Did You Know? Coca–Cola has stayed at the top of the beverage business for 125 years by offering value to customers. When you buy their products, it’s not just for the content. There’s a history you’re tapping into.
It is possible to create new demand in the market using well-timed strategic planning
Ordinarily, companies in the red ocean seek to increase their current customer base by focusing their new range of products on a tailored and fixed buyer class/group. But unknowingly to them, this only alienates more and more consumers, hence reducing their products’ demand. To avoid this, create a blue ocean, obviously, but how do you do this without losing your already dwindling customer base?
While red ocean companies struggle for the tiny amount of consumer demands accrued to them, you create a platform that increases demand instead. But how? First, you should avoid the common mistake of focusing on the current customer base and seeking out noncustomers, finding out why the current market doesn’t serve them, and giving them cause to become customers.
Some blue ocean companies see them as an opportunity to expand demand and see them as a clump of customers waiting; this misconception leads to blue ocean companies applying a one–size–fits–all approach and losing the much–needed ground. There are three tiers of noncustomers.
- The first–tier noncustomers are the ones who participate in the current market minimally and are prone to switch to a more convenient alternative if one arises. They are prime targets for blue ocean expansion because of shifting loyalties.
- The second–tier noncustomers are the refusing sector, and they do not patronize the market either because the services are too expensive or it doesn’t cater to their needs.
- The third–tier noncustomers are neglected because they are not interested or thought to have been catered to by another market/industry.
To effectively create a sustainable blue ocean, the goal is to capture the largest tier. Carry out a survey and identify the one that will provide the most considerable returns. It will preferably combine all three levels by giving them a service they want in common.
There are a few factors that can stand in the way of the full functionality of a blue ocean; here’s how to scale those hurdles
The term “hurdle” refers to the factors that would slow down or hinder a business’s growth.
One of the most unnoticed hurdles in the corporate world is the lack of unity within its ranks. When a firm has a disjointed system within its ranks, it cannot rise to become a top contender, but if there is a well–oiled system put in place among the employees, you can be sure of success.
- The first hurdle is the cognitive hurdle, which involves making the staff members aware of the strategies and opening their minds to a shift in strategy. They don’t stay stuck in the old approach and have conflicting views of what you intend to achieve.
- Next is the issue of limited resources. To execute a proper blue ocean, you’d need a vast amount of resources, but this hurdle isn’t a hurdle as long as you cut enough cost and channel more towards execution.
- The third is the hurdle of being motivated, getting the team inspired and motivated about the project and strategy.
- Lastly, politics is another hurdle within the ranks. It is important to only have people with the same vision as you handle the decision–making process.
To get your staff to stay committed, you must strive to create an atmosphere of trust and loyalty for/to the strategy. This way, each person in your team is wholly committed to the plan. When the ranks are invested emotionally in the process and fully understand it, there is no hesitation and struggle to carry out its grand vision.
Keeping your blue ocean relevant; ways to promote a company’s usefulness
A blue ocean is a beautiful idea for a company looking to be head and shoulders above the competition, and it can give the desired results if done right. But what are the contingencies put in place to keep the ocean blue?
When your blue ocean offers rare services, it gives it an edge over every other company and sets it on a dominant stage. The key is to set up your blue ocean in a way that is almost impossible to imitate by the newcomers. There are a few traits of a blue ocean that would keep it relevant and hard to copy.
First is the ridicule’s quality. If your venture is so outlandish that it incites ridicule from the competition, it will discourage them from imitating you. By the time your ideas blossom in profit, it would be too late to copy, and even if they did copy, you’d have cemented your place as the reference point in that industry. Also, if your brand image goes in conflict with the status quo, no one would jump at the idea of copying your brand because of fear of alienating their current customers.
A blue ocean venture will thrive without competition if it comes with a large monopoly of the industry to which it caters. Value creation/innovating is the most crucial tool in keeping blue ocean companies viable, relevant, and renewable. It should be a constant process, continually fine-tuning until you get the required results. Blue ocean strategies are prone to replication, but if you strive to value innovation consistently, you will stand out even in a room of copycats.
The world has many red ocean companies that have sunk their teeth deep into the market and squabble over fast–reducing customers. If you wish to break from the cycle and gain maximum profit, you should take a cue and create a blue ocean. A blue ocean offers you a chance to take risks and get rewarded for them; it also gives you dominance and uniqueness in a vastly crowded and monotonous market.
But creating a blue ocean isn’t an easy task for any entrepreneur because many other players in the game would record losses if blue ocean firms succeed. Blue ocean firms need to approach the market with a mindset that they will take every risk and do the outlandish. Sometimes the road less taken is the most profitable.
The red ocean companies will try to copy the blue ocean strategies once they start experiencing success. Hence, the blue ocean firms need to prioritize creating value that will be unique to them and impossible to imitate without them as a reference. For a blue ocean company to stay relevant and compete in the market, there must be continuous innovation and a readiness to make bold moves.
Value creation is vital to solidifying your place in the very competitive marketplace. When your company/product provides enough value for money, it will not only pull more customers to you; it will make you a formidable force. Red ocean companies rely on their long–term legacy and slack off in creating value; this is where you can shine.
Identify a market space and assess its top players, their services, and the factors that aid their reach and continued relevance and, from the data, create a blue ocean strategy to challenge and dominate the industry. Also, provide new and bold services for consumers.