How To Use Blue Ocean Strategy For Your Business Growth
Blue Ocean Strategy is a marketing strategy that focuses on creating new demand in the marketplace by changing the terms of competition.
The term “Blue Ocean” refers to uncontested market space: the “ocean” which is blue because it represents water, or in this case, uncontested market space. Blue ocean strategy is a framework for achieving sustained success that can be applied to any kind of business and its strategic decisions.
The key difference between a Blue Ocean Strategy and other types of competitive strategies lies in its focus on innovation as the basis for creating new demand (rather than competing against existing demand) and redefining industry boundaries.
The easiest method for creating a new market and increasing your sales fast is using the strategy of blue ocean strategy. This strategy doesn’t rely on your competitors doing the same thing to make your business grow, how does it work?
Blue Ocean Strategy is an analytical framework developed by W. Chan Kim and Renee Mauborgne that helps companies create and capture new market opportunities in a disruptive way. It deconstructs the blue ocean, which is the opposite of red oceans (crowded competitive markets) and strategies that lead to bloodbath competition. These are new markets that have emerged from technological innovations or industry shifts that leave traditional competitors fighting over yesterday’s business.
Blue Ocean Strategy: Expand Your Market Without Competing Head-to-Head is a step-by-step guide of how this revolutionary approach can be used in almost every industry. The concept of the Blue Ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.
The Business of Strategy
Every organisation needs to create strategies to get ahead. The bottom line is that for every competition you do, there are multiple other competitors. And the cost of entry into every market is relatively low. There is however one critical difference between the Blue Ocean Strategy and competitive strategy. For the competitive strategy to work, you have to be ready to compete head-to-head with your competition. Blue Ocean Strategy on the other hand does not compete, it embraces competition and hopes to dominate it. For it to be successful, you need to follow certain steps:
Step 1: Identify competitors Next, understand your competitors’ main strengths and weaknesses. What distinguishes your organisation from your competitors is your target market and the scope and reach of your business.
Why Blue Ocean Strategy?
Competition in the market is the main driver for innovation. The existing market is the most boring market because it has little growth and only a few gains that attract new customers. Therefore, in order to turn an unexciting market into one which is more exciting, differentiation and low cost can be the best way. Blue Ocean strategy is a technique that enables to creation of an untapped market space, where established competitors are nowhere to be seen and consumers have no reason to buy anything from any of these competitors. By innovating in the first-ever market, companies like Microsoft, Amazon, Oracle, are able to create markets in which they have no actual competitors and are able to capture 95% of the profits of the markets they have entered.
The Components of Blue Ocean Strategy
The Blue Ocean approach has three parts attack, innovation and value creation. The attack comes before innovation. Innovative ideas are first tested and refined, and before their implementation in real life, they undergo multiple processes of refining and testing. The third part, value creation, comes after innovation. This strategy focuses on delivering value to customers at high quality, lowering their costs, and creating a sustainable competitive advantage. Blue Ocean Strategy, which is based on surfing the wave and reaching the shore, implies finding a way to surf through a wide ocean to find a larger shore to be more successful. The main premise of the Blue Ocean Strategy is to build an ocean of potential customers. It is often done by diversifying the value offering.
How to Apply Blue Ocean Strategy in Your Business
Many business owners might be sceptical of diving into the Blue Ocean strategy. However, every business has a need to target a specific market segment or a customer base. Most of us have a customer segment that is willing to buy the product or service, but we lack the ability to fulfil that demand. We often go after a mass market by trying to sell the product at a lower cost. This strategy generally fails because it lacks differentiation. However, there is a solution. We can create a new market by adding value to our products or services and showing our clients that the product or service they are buying is better than the competition is offering.
Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.
Defining the target market is vital to creating a Blue Ocean Strategy. A wide range of organisations employ Blue Ocean strategy to win the first-ever customer and create differentiation for the market. There is no denying the value of a first-time client. However, there is a common gap for both new and existing customers. It is the gap in the quality of the services, products and solutions. That is why a new client has to wait for a better product or service than the original one.
Having a Blue Ocean Strategy will open up this gap. It will attract clients by providing a customized product and solution to their needs. The concept helps companies to remain ahead of the competition by providing a more targeted and premium client experience. To keep the competition at bay, companies use this.
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