‘The more you look at the competition the more you look like your competition’
‘Lasting success comes from new marketplaces not from competing with existing marketplaces’.
The Blue Ocean Strategy is about making the competition irrelevant
. Its about creating uncontested market space.
In business, a Red Ocean and Blue Ocean exists:
- Compete in existing marketplace
- Aims to beat competition
- Exploits existing demands
- Unknown industry or innovation
- Not presently competitive – aiming to make competition irrelevant
- Creates new things
The idea with the Blue Ocean Strategy is to create something new meaning you don’t have to compete with what already exists.
Value innovation comes from creating things that the industry has never offered.
Buyer value is gained by creating a new product/products that the marketplace is seeking and thus creating more revenue because of its uniqueness and overall value.
Blue Ocean Strategy is built on 8 principles:
- Reconstruct market boundaries
- Focus on big picture
- Reach beyond existing demands
- Get the strategic sequence right
- Overcome key organizational hurdles
- Build execution into strategy
- Align the value, profit and people propositions.
- Renew blue oceans
- Compelling tagline
- Strategy canvas.
- Four Action Framework.
- Eliminate, Reduce, Raise, Create.
This enables companies to create a new idea.
The 3 Steps encompasses of a model idea of business e.g. you fill each section to get overall best outcome.
Blue Ocean strategy teaches you to think differently. It teaches you to stand outside the box.
6 Path Framework:
- Look across alternative industries e.g. they have difference functions and do different things but serve the same purpose
- Look across strategic groups within industries.
- Look across chain of buyers e.g. consumer, purchaser
- Look at complementary product and service offerings
- Look at functional or emotional appeal e.g. combining each into business model
- Look at time – see how trends will affect business past and present.
Create a new pool where your product takes over – don’t just add to fit in
According to Tony Robbins people describe the process of what THEY DO rather than the BENEFIT that they PROVIDE.
Let me explain that for you;
‘What do you do’?
‘I’m in the restaurant business’.
Here the process of what they do is described. To create value, create a BOS you need to embody the benefit that you provide.
Here is an example:
‘What do you do’?
‘ I create an atmosphere where people can enjoy themselves, eat the best foods, spend time together and enjoy life’.
Do you see how straight away something more unique is created?
How can Blue Ocean Strategy Work For You?
How can companies break out of existing competition and create uncontested marketspace. Logically it seems as easy as saying – ‘Create something new’. However it isn’t all that simple. You will need to pursue differentiation and low costs.
Looking at competition is not something you particularly want to do within the blue ocean strategy. Looking at your competition is only necessary regarding pricing and differentiation.
Testing: How to Utilise BOS.
- Gaining reviews and recommendations on your product
- Leverage the power of social media by giving away the product -giving freebies
- Provide personality.
Is there a compelling reason for people to buy the product – are we strategically pricing it – if we deliver value at price are we able to make money on it. You need to develop a model where profit is active.
The founders of the Blue Ocean Strategy are Professor W Chan Kim and Renne Mauborgne. You can buy their book here. it has sold over 3.5 million copies in 44 languages!