A♦️ Escape the red ocean: Find your blue ocean strategy

Feeling like a fish in a tank full of sharks?  Fierce competition drives prices down, squeezing your margins and making it difficult to stand out. You deliver exceptional service, top-notch products, yet your competitors constantly undercut your prices. This fierce competition creates a bloody "red ocean," a market space saturated with competitors all vying for the same customers with customers prioritising price over value, leaving you scrambling to differentiate your offerings.

Problem or Challenge

Many businesses operate in what W. Chan Kim and Renée Mauborgne, authors of  Blue Ocean Strategy, call  "Red oceans." - saturated markets with fierce competition. These are highly competitive markets saturated with similar products and services with businesses struggling to differentiate themselves. The challenge lies in escaping this red ocean and finding a "blue ocean" – a market space devoid of competition where you can create new demand and thrive.

Complexity

The challenge lies in escaping the red ocean and finding your own "blue ocean."  Blue oceans are untapped market spaces with high potential for growth and profitability.  They are created by  innovating and offering value propositions that are fundamentally different from what currently exists. This requires innovation, a deep understanding of customer needs, and a willingness to challenge traditional industry norms.

Solution: Embrace Blue Ocean Strategy

Blue Ocean Strategy encourages businesses to shift their focus from competing within existing markets (red oceans) to creating entirely new markets (blue oceans).

Here's how you can navigate to a blue ocean:

1. Identify Customer Needs: Start by deeply understanding your customers' needs and pain points. What are their unmet desires and frustrations with current offerings?

2. Look Beyond Existing Competitors: Don't just focus on what your competitors are doing. Instead, explore alternative industries, complementary products, and untapped customer segments.

3. Reconstruct Market Boundaries: Challenge the traditional assumptions about your industry and how business is done. Think creatively about ways to combine existing elements or eliminate unnecessary features.

4. Focus on Value Innovation: Don't simply create "me-too" products or services. Aim to deliver a combination of high value and low cost, making your offering truly unique and attractive.

Benefits

By successfully implementing a Blue Ocean Strategy, your business can expect to reap significant benefits:

• Increased Profitability: Escape the price wars of red oceans and command premium pricing for your innovative offerings.

• Rapid Growth: Blue oceans present the potential for explosive growth as you tap into entirely new markets.

• Sustainable Competitive Advantage: The unique value proposition created by your blue ocean strategy becomes difficult for competitors to replicate.

Why it Works

Blue Ocean Strategy works by focusing on value creation, not just competition.  By offering something truly  different and addressing unmet customer needs, you create demand rather than fighting for a share of existing demand.

Measurement

The success of your Blue Ocean Strategy can be measured through various metrics:

• Market share growth: Track how quickly you're capturing a share of the new market you've created.

• Customer acquisition cost (CAC): A decrease in CAC can indicate that customers recognize the unique value you offer and are willing to pay a premium.

• Profit margins: Blue oceans often allow for higher profit margins due to the lack of fierce competition.

My Story, Sources and References

I first learnt about the Blue Ocean Strategy from a lecturer on my MBA course at Cranfield university.  At the time a rookie, a new, enthusiastic young lecturer, Joe is now one of the top guys there and it’s not surprising. He’s knowledgeable and communicates brilliantly.  I strongly recommend Joe and indeed Cranfield.  As well as the original source book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne.

Don't settle for the bloody waters of the red ocean.

Embrace Blue Ocean Strategy and chart a course for uncontested market dominance.

By focusing on value innovation and creating a truly unique offering, you can achieve sustainable growth and profitability.