Traditional strategies, often referred to as Red Ocean strategies have been the norm for business who contest in the same markets fighting for a competitive advantage. This strategy influences the company to provide better service to buyers and focuses on the existing customers and buyers rather than creating new customers.
The Blue Ocean strategic planning model is a departure from traditional management of number crunching and competitive benchmarking. Rather than attempting to gain more share in an already saturated market, Blue Ocean Strategy is about creating demand in a growing, uncontested market and capturing this uncontested space.
The approach is not to beat the competition or be the best in the industry. Rather, it aims to redraw industry boundaries by operating within a different space, making the competition immaterial. It aids an approach where consumers don’t have to choose between value and affordability. If a company can identify what consumers currently value and then rethink how to provide that value, differentiation and low cost can both be achieved. This is known as “value innovation” and is the cornerstone of the Blue Ocean Strategy.
Five steps to jump from a red ocean into a blue ocean
Begin by determining which business, product, or service to tackle, before putting together the team to carry out the initiative.
Understand the current situation by having a clear, shared picture of the existing strategic landscape.
Imagine the possibilities, by uncovering the hidden pain points in the industry and identifying non-customers of the industry.
Design a roadmap to the goal by applying systematic paths to reconstruct market boundaries and develop strategic options.
Launch a “blue ocean move” by rapidly testing and refining according to your designed business model, and thereby maximising potential.
For businesses to continuously ride the non-competitive wave, there is a constant need to repeat the Blue Ocean Shift for continuous growth. Don’t forget – your competition will imitate you when you lead the market!