Instead of competing with other companies, find a way to operate in an unrivaled market.
- The Blue Ocean strategy encourages products to be improved and brought to market at an affordable price without competition.
- Many companies have reached their current state with a blue ocean strategy, but this approach can be risky.
- To implement a blue ocean strategy, grow your existing team and identify painful areas that only your company can address.
- This article is for business owners who are interested in creating their own marketplace rather than competing.
mediaindonesia.net– Let’s say products and services provided will not meet your income goals. If you can know how to change your products and services to change your industry?
This is exactly what the blue ocean strategy refers, although last name brands are used long before the 2004 book. We will check how much help to create your market companies grow and share how to use your business.
What is the blue ocean strategy?
A blue ocean strategy helps companies gain market space in which they do not compete separately from other similar businesses. This new space is called the ‘blue sea’. This is in contrast to the struggle for survival in the ‘Red Sea’ filled with fierce competition.
A blue ocean strategy represents the simultaneous pursuit of high product differentiation and low cost, making competition irrelevant.
The name “Blue Ocean Strategy” comes from the book “Blue Ocean Strategy: How to Create a Competition-Free Market Space and Make Competition Independent”. Professor W. Chan Kim, co-author of the book with Renee Mauborgne, explained the concept in a Forbes article: “Our research shows that a blue ocean strategy is especially necessary when supply exceeds market demand. This situation applies .To more and more areas today and will spread more widely in the future.
Advantages and disadvantages of the Blue Ocean Strategy
A blue ocean strategy can be a boon to your business or inadvertently hamper your operations. Consider the pros and cons of the blue ocean to decide if the strategy is right for you.
Benefits of the Blue Ocean Strategy
Here are some of the benefits of the blue ocean strategy:
- Avoid saturated markets. Your small business must compete with giant corporations and other major players in your field. However, if you follow the blue ocean strategy, you will be a completely different product and at the same time you will meet the needs of the customer at an affordable price.
- You will not compete with powerful giants in your field. The current growth potential of walking in the blue ocean means balancing product or service innovation with costs and benefits to create new value for customers. Word-of-mouth advertising can increase demand because more customers buy what you sell. You will meet customers at their level. In the Blue Ocean mentality, value and affordability are equally important.
- You will always present your innovations at an affordable price to your target customers. This approach reduces the barriers your audience has to buying what you sell.
Disadvantages of the Blue Ocean Strategy
These are some of the disadvantages of the Blue Sea strategy.
- It may be too ambitious. The logic behind the Blue Ocean strategy is that any business can offer an affordable and unrivaled product or service. In fact, being so innovative is not always easy. Even if you have a great idea, real-world constraints can get in the way of its realization.
- It can be very risky. Maybe you’ve found a way to create a completely unique product without setting an absurd price tag. You may be at a crossroads because people in your small business are going to buy from your company. But what if only these people are interested in your offer? If so, the Blue Ocean approach may limit you unnecessarily.
- It can be permanent. Innovation breeds imitators. In other words, blue oceans turn into red oceans over time. Ocean Blue strategy may be ideal for your business, and it may be possible to stop long-term.
How to implement a blue marine strategy
KIM and MAUBORGNE books suggest the following steps to implement the blue strategy of the ocean.
- Determine the starting point to deploy your new offer and rent employees who help build the strongest team and brand identity.
- Evaluate the strengths and weaknesses of the current team and determine how they can be improved.
- Identify the point of pain that the current customer and new customers may have.
- It is different from other companies that develop products and services that handle these pain points.
- Create a formal plan for your shift and test out new products and services (and the processes you’ll follow to get there).
Examples of blue ocean strategy
Blue ocean strategies may sound strange, but companies have been using them successfully for quite some time, even before Kim and Mauborgne coined the name of the approach. Here are three examples.
When the famous car manufacturer Ford launched its now legendary Estate line, most manufacturers customized their cars to suit the needs of each buyer. This approach has resulted in high prices and inconsistent quality. In contrast, the T model was offered to each customer in only one color and one model. Lack of customization has led to lower prices and more consistent quality. Ford’s approach became the foundation of the modern automotive industry.
When Nintendo released the Wii in 2006, the company avoided competing with the Xbox and Playstation in graphics. Instead, Nintendo prioritized wireless gameplay control that was not available on other systems. This allowed Nintendo to introduce more interactive physical games such as the Wii Sports series. The popularity of games – such as consoles – grew rapidly.
Netflix has twice successfully used the Blue Ocean model. Reed Hastings and Mark Randolph founded the company in 1997 as the first mail order DVD rental company. Of course, Netflix eventually introduced the Stream TV model, which permeates almost every aspect of modern life. Either way, the strategy has paid off, making Netflix a household name at Walmart or Amazon levels.
In search of blue oceans
While avoiding naming Michael E. Porter of Harvard Business School, Kim and Mauburn directly attack the famous Five Forces’ market analysis. Porter’s model examines certain factors that help determine whether a company can be profitable based on other companies in the industry.
Defenders of Kim and Mauburn’s strategy might argue that this tactic encourages fierce competition and stays in the red ocean. Kim and Mobornne say that the key to a successful business of excellence is to redefine the conditions of competition and move to the blue sea with its own water. The goal of these strategies is not to win the competition, but to make it irrelevant.
To discover the elusive blue sea, Kim and Moburn called what they call a “quadruple framework” to reconstruct the elements of buyer value in creating a new value curve. I encourage you to look it up. The picture raises four main questions.
- Reboot: What factors need to be significantly above industry standards?
- Scarcity: What factors result from competition from other industries? can you reduce it
- Elimination: What factors have long competed with the industry to eliminate?
- Construction: Need to create an element that the industry has never provided?
This exercise allows companies to examine each element of competition and discover the assumptions that executives unwittingly make during competition. They can then search within their industry and move to the blue sea.
True Blue Sea Strategy
Kim highlighted how Amazon has grown from an online retailer to a digital platform that sells just about anything.
The reader said, “Consider Blue Sea’s first change in book retail by offering the world’s largest book selection, affordability, automatic buyer order confirmation, and helpful choices for those who are buying. I also bought the book.” A critique of what was or wasn’t useful in the book.”
However, Amazon has not always succeeded in creating the blue sea. According to Mauburn, it has failed in some cases against Zappos, eBay and Apple.
“In each of these cases, every company that Amazon took on created their own blue sea, and every time Amazon tried to emulate it, it failed,” Mauborgne said. “The lesson is that the best defense is offensive and the best violation … is to make a layer of blue ocean and create your own blue ocean, imitation is not the way to success, especially in The crowded industries, most companies face today today. ”
Another company that created a blue ocean layer is the Home Depot, which led an initial price limit, which led to Kim to the DIY market with several multiplision dollar.
“When they saw Amazon in the room, rather than competing their heads … they doubled what Amazon could not – know and advice could be complex to do-it-it-it-it- IT IT-IT-IT-IT makes its projects, for example
Moving in a blue ocean strategy
If there is a limited place of growth, companies must try to seek vertically to find new sectors where they can enjoy the uncontrolled market share. The goal is to capture a new question with a higher product that makes competition irrelevant. Unfortunately, this doesn’t always work.
Retailers are struggling financially as stores continue to expand and shopping habits change in the United States. Stores such as Nine West, Claires, Bonton Store, etc.
Moborn Boom recommended to the companies involved the strategy he presented in his recent book with Kim, Changing the Blue Ocean: Beyond Competition. The Strategy Canvas is a one-page analysis that helps companies focus on the industry and its key competitors.
“It makes you look at yourself, just like the market looks at you,” Mobornne said. “When retailers use it, they quickly find that they have been competing in the same space for 30 years, and they are all mirror images of each other. It provides a real wake-call for everyone. It matches and creates. Strong motivation for change.”
The last piece of advice for his company is to stop the competition and start creating.