What Is Blue Ocean Strategy and How Does It Work?

W. Chan Kim and Renee Mauborgne, academics at INSEAD, a private university with locations all over the world, devised the Blue Ocean Strategy marketing method. Blue Ocean Strategy, a book written by Kim and Mauborgne, was published in 2004. Since then, their theories have spawned a cottage industry, with books, websites, courses, and numerous studies devoted to the subject.

You’ll probably want to brush up on the fundamentals before diving into that much information. What are some examples of success and what are some of the drawbacks? Is Blue Ocean Strategy appropriate for your business? Let’s have a look at what we’ve got.

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Blue Ocean Strategy: The Fundamentals

More than rethinking your business plan is required for Blue Ocean Strategy. It’s a fundamentals-based rethinking of your entire business and marketing strategy.

No, that does not imply that if you are a website design specialist, you will turn your business into a microbrewery. It does imply putting your skills and materials to new, previously unexplored uses.

Red Ocean Strategy, on the other hand, is the polar opposite of the Blue Ocean Strategy. And it’s how the vast majority of firms compete. A Red Ocean strategy entails squeezing out existing market space between competitors. As a result, you compete for a larger part of the pie. But why not try your hand at making a new pie?

The Blue Ocean Strategy encourages entrepreneurs to look for unmet demand in uncrowded areas. Rather than trying to out-compete your company rivals on their terms, you look for untapped markets with unmet needs. Consumers may not even realize they desire something in some circumstances. In reality, with your one-of-a-kind service, you may build demand.

Take the iPhone, for example. Few of us understood we wanted a gadget with a touch screen that could take calls, send messages, play music, and offer a plethora of apps before 2007. Apple primarily competed in the personal computer market.

Instead of remaining in that constrained industry, Steve Jobs and Apple leveraged existing resources to create an entirely new market. As a result, competitors have had to compete in a field that Apple has staked out for more than a decade.

Blue Ocean Strategy does not necessitate the acquisition of new talents or the acquisition of new resources. Rather, it means putting your existing skills and resources to work to meet unmet—or possibly non-existent—demand from customers. It necessitates ingenuity as well as extensive planning. However, it has the potential to expand your company’s horizons.

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Success Stories of the Blue Ocean Strategy

Blue Ocean Strategy has been used successfully by a number of well-known companies.

Take Bloomberg Business, for example. Few people had heard of it a few decades ago, despite it being a leader in the financial news today. The digital financial news industry was dominated by companies like Reuters and Dow Jones. They primarily targeted IT managers with their services.

Bloomberg noticed that there was an unmet demand among traders. Traders required immediate access to information in order to make real-time judgments. Bloomberg, in other words, found an utterly unmet demand for information.

Bloomberg L. P. has risen from its inception in 1990 to become one of the world’s leading financial news companies by capitalizing on this uncontested market.

Consider the story of Peirce College in a completely different context. Peirce College, founded in 1865 in Philadelphia, offered technical and commercial training to returning Civil War soldiers.

However, by 1990, its expansion had stalled. Arthur J. Lendo, the president of the college, used Blue Ocean strategy thinking in 1991. He was looking for uncontested marketing opportunities that were connected with unmet requirements. In this situation, it meant reaching out to working adults who were looking for educational opportunities.

They moved their attention to associate degree programs and online learning as a result.

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These two examples may appear obvious today, but they were not at the time. Change necessitated creativity. That is, they needed to stop trying to out-compete each other in current markets.

They satisfied demand not already met by competitors by shifting to mainly uncontested markets.

Many more success tales can be found in Blue Ocean Strategic Moves. Read them attentively and determine what need in your own industry is now unmet.

Critical Analysis of the Blue Ocean Strategy

Many new ideas result from the Blue Ocean Strategy. Some of the items and services we use today didn’t exist a decade ago. But does it mean it’s appropriate for everyone? There is a danger. Do you truly want to make a major shift if you’re already a successful business owner or entrepreneur in your field?

One method to use is a thorough SWOT (Strengths, Weaknesses, Opportunities, and Threats) study. If you are risk-averse, devoting only 10% or less of your available resources to innovation outside the established market space may be the best option for you.

You might invest more time and money if the competitor can consistently out-price and out-service you. In either case, you should proceed with optimism tempered with skepticism.

For example, some competitors may have purposefully left market spaces unexplored. That is, they are either unprofitable or in short supply.

In certain circumstances, the timing is simply incorrect. It’s possible that your amazing concept is too far ahead of its time. The first to pave the road for others do not always achieve their objective. It’s possible that the market space is hazy, or that your product difference is obscure. People, on the other hand, are frequently reluctant to change.

It will very certainly take ninja-level marketing talents to explain a new product or service to them.

Think about LaserDisk. In the era of VHS, the home entertainment platform was undoubtedly well ahead of its time. It paved the way for CDs, Blu-ray discs, and other types of data storage. However, the DiscoVision brand no longer exists, and Pioneer Corporation suffered a significant financial loss.

Steps to Follow for Success

Many companies have risen to the top thanks to a Blue Ocean Strategy. It has enabled businesses to carve out their own niche. It has improved all of our lives with improvements we didn’t realize we needed… but now can’t live without.

With the fundamentals in mind, you could be ready to move on with the Blue Ocean Strategy. To help you get started, we’ve put up a list of resources.

The Blue Ocean Strategy website has a wealth of information and courses to help you learn more.

Proceed with caution and success by riding the ocean wave.

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