Why You Should Start Thinking Blue Ocean Strategy Right now


"Challenging an industry's conventional wisdom about which buyer group to target can lead to the discovery of a new blue ocean"


'Blue Ocean' Strategy Definition

Back in 2005, Professors W. Chan Kim and RĂ©nee Mauborgne revolutionised business strategy with new ways of thinking how to position and market their brand.

In their book, "Blue Ocean Strategy, How to Create Uncontested Market Space and Market Competition Irrelevant", Kim and Mauborgne advised businesses to stop going head-to-head with each other in crowded markets, and to seek out areas of the market where there is little or no competition.

With small businesses finding themselves up against the top dogs in their market space, they are trying everything they can to take some market share. Instead of resorting to risky actions such as cutting prices, Kim and Mauborgne's strategy encourages businesses to look for areas of the market where there is a potential for higher profits due to lack of competition.




Red Ocean vs Blue Ocean 

In their book, Kim and Mauborgne defined their terms 'red ocean' and 'blue ocean' to describe current markets:

Red Ocean Strategy

Business operating a 'red ocean' strategy are:
  • Competing in existing market places
  • Exploiting the existing demand 
  • Making a strategic choice of differentiation or low cost 
Blue Ocean Strategy

Business operating a 'blue ocean' strategy are:
  • Taking a unique approach to stand out
  • Making competition irrelevant
  • Capturing new demand
  • Participating in shaping market trends  

In 'blue ocean' strategy, Kim and Mauborgne set out The Four Actions Framework that you can use to pinpoint your business's value elements (the value creating components your organisation invests in, in order to differentiate from competition) :

1. Raise

Here you need to look at which factors of your business offering should be raised well above the industry standard. 

Are there any factors your industry forces consumers to make in their purchase that make it more difficult for them?

2. Create

Which factors should be created that the industry has never offered?

Is there a new source of value for the consumer that you can create and turn into a demand in the market?

3. Eliminate 

These are factors that the industry take for granted and should be eliminated in your new strategy. Often these factors are reliant on current buyer values which can change over time. This could be examples of above-the-line marketing techniques which may be common in your current market. 

4. Reduce

Which elements should be reduced well below the industry standard? 

This can include products or services that have been over-designed in order to beat competition and are costing your company more than the value they are bringing back.

Creatlr have some great framework templates you can use to focus on your value elements using the The Four Actions Framework in your business.


"In red oceans, industry boundaries are defined and accepted and the competitive rules of the game are known"

'Blue Ocean' Examples

Over the past few years, many businesses have disrupted their market by owning their 'blue ocean' strategy.

In their book, Kim and Mauborgne highlight Southwest Airlines as a pioneer in this field. "Southwest Airlines created a 'blue ocean' by breaking the trade-offs customers had to make between speed of airplanes and the economy and flexibility of car transport." Southwest Airlines decided to eliminate this factor and offered high-speed transport, at attractive prices, with frequent and flexible departure times.

Nintendo are also often noted as one of the biggest successes of the 'blue ocean' strategy. When they launched the Nintendo Wii in 2006, they recognised an area of untapped potential in giving consumers the ability to use their games console to get fit. Introducing the wireless motion control stick allowed them to step into unchartered territory, with little competition.



Why You Should Be Thinking 'Blue Ocean'!

If your business is stagnating or failing in your current 'red ocean' market, it is time to look for the blue ocean. This approach encourages businesses to pursue differentiation using creative and innovative strategies.

To start thinking 'blue ocean', you need to start thinking of the value elements you bring to your current industry.

You need to ensure your new ideas can be easily adopted and that it is priced accordingly to the potential of your target market. If your costs cannot match this price, then you either need to adapt your business model or sacrifice the idea because it will not be profitable - a key aspect of 'blue ocean' strategy.

You could also take a leaf out of Nintendo's book and target a completely different market. Instead of focusing on the traditional gamer market, with the Nintendo Wii they targeted untapped markets such as parents that don't have the time to get out of and exercise, by allowing them get active at home.

In 1997, Apple were on the brink of bankruptcy. In 2018, they became the first company to hit a market value of US$1 trillion.

At a conference last year, Kim noted that a fundamental element of Apple's success was value innovation, rather than technological innovation. Apple didn't create the technology they used to make the first iPod, or the iPhone, they partnered with companies that specialised in the latest touch screen tech to create something new. As Kim noted "Business is about making money using technology; not inventing new technologies".

Opportunities exist in every industry. Are there any external technologies you could be using in your business to make your product offering more appealing and help your find that blue ocean?

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