If there is one task that seems almost impossible in the business world, it is finding a way to stand out from the competition in a way that is truly innovative. And we say almost impossible, because there is one way that will surprise you: the blue ocean strategy. This concept, introduced by W. Chan Kim and Renée Mauborgne in their book “Blue Ocean Strategy,” suggests that instead of competing in saturated markets, the “red oceans,” companies should seek out or create markets without competition, or “blue oceans.” Let’s break down how it can transform the way companies operate.
The nature of the blue ocean
Blue ocean strategies are based on the idea of creating a new market space where competition is irrelevant. Instead of fighting for a share of the existing market, companies that adopt this strategy focus on creating demand in an unexplored space, generating profitable and sustainable growth. This approach not only involves innovating products and services, but also redefining the perception and value that consumers associate with them.
Differences between red ocean and blue ocean
A red ocean represents a saturated market where companies are fiercely fighting for limited market share. Competition is based on outperforming the rival on cost, price or quality, which usually leads to a price war and a reduction in margins. On the other hand, a blue ocean is a market without direct competition, where the company can set the rules of the game. Here, the focus is on differentiation and innovation, which allows the company to create and capture new demand.
3 steps to implement the blue ocean strategy
Evaluating the current market
To implement a blue ocean strategy, any company must begin with a thorough assessment of its current market. This involves identifying saturated areas and segments that are either unserved or poorly served.
Innovation and creativity
Innovation is at the heart of the blue ocean strategy. That is why it is so important for this mechanism to work that companies foster a culture of creativity and innovation, where new and radical ideas are welcomed and studied.
Prototyping and proof of concept
And of course, before launching a new offering into the market, prototypes and proof of concept testing must be done. This helps validate ideas and ensure they meet the needs of the target market.
And yes, you’ve seen this before..
Cirque du Soleil
An iconic example of the blue ocean strategy is Cirque du Soleil. This Canadian circus reinvented the entertainment industry by combining elements of circus and theatre, creating a completely new experience that appealed to a global audience. Rather than competing with traditional circuses, Cirque du Soleil created its own market space.
Nintendo Wii
Finally, another success story is the Nintendo Wii video game console. Instead of competing directly with PlayStation and Xbox in terms of graphics and power, Nintendo focused on playability and accessibility. The Wii attracted a new audience of casual gamers and families, opening up a new market in the video game industry.
So blue ocean strategy offers a refreshing and powerful perspective for companies looking to differentiate and grow in competitive markets. Adopting this strategy requires a change in mindset, a focus on creativity and a deep understanding of the market, but the benefits can be substantial.
