Blue Ocean Strategy
Innovation for New Markets
The blue ocean strategy leads out of the shark tank: instead of copying the competition, companies find new markets.
Blue Ocean strategy: Off to new markets
Which company does not dream of an untouched market? And how many companies are stuck in the constant, sometimes ruinous competition and are treading on the spot? In order to escape this fierce struggle for survival, a rethink is necessary: If your own market or the market you are aiming for is too fiercely contested, you create a new one.
Opening up new markets is the core idea behind the so called Blue Ocean Strategy. To explain it simple the Red Ocean stands for existing markets where the sea is full of blood and therefore red, the Blue Ocean is the untouched, sweet spot of sea where nobody was before you.
I think we don’t have to discuss the obvious advantages of an untouched market. At least in the beginning you won’t have any competition. Your organization can act instead of react which automatically gives you higher turnovers and returns. But it is for sure not risk free, failure can get you everywhere. And even worse you will swim all by yourself not finding any customer and starve to death or die of thirst.
Customer Centric Focus
The Blue Ocean Strategy comes with several tools with which your organization can create new business cases. What they all have in common, is the focus on the customer benefit, regardless on the how to sail the blue ocean. Just think about technological innovation.. typically driven by making the customer lives more comfy.
Analyze and reposition your offer
The Blue Ocean Strategy first starts by analyzing your existing offer, which has to be done from the customer perspective. This is followed by the competitors analysis, what do they have that customers buy their products instead of ours, what is the extra value? The outcome is then recorded in a so called value curve.
The next step is the usage of the so called ERIC square. A typical tool to redesign service offers of drive product developments. The Blue Ocean gets a shape.
The E stands for Eliminate: What existing features are obsolete for the new use case?
The R means Reduction: What is important for the customer but can be reduced to an absolute minimum without being kicked out?
I for increase: What product features should be raised above the existing standard?
And finally C for Creativity: What awesome features does the customers want but don’t know yet?
A slightly different approach can also be the use of the Osborn Checklist, but won’t be covered in this article.
Creating Blue Oceans
Let’s face it, you can have the best product in the world, but without a market it is worthless. This already indicates the crucial factor of success of a blue ocean strategy, e.g. creating new markets or at least expand the existing one. To help you getting to new markets six paths can be taken:
Are there existing strategic groups in the industry?
Are alternative fields of operation possible - and if so, which ones?
Is there a potential target group that has been ignored so far?
What are the new mega trends that others haven’t recognized yet?
Are there complementary services or goods that nobody has on the radar?
What functional or emotional motives would customers want to buy the new product from?
Following these questions already shows you that the Blue Ocean Strategy rarely ends up in a completely new and disruptive product. The reality is that different product features are combined and given out to the market as new release. That is for sure not the idea behind the Blue Ocean Strategy, but used for it. The benefit of the Blue Ocean Strategy is to turn non-customers into customers. These folks are your blue ocean.
Have a look on Show Stoppers
Like with all theories, the Blue Ocean Strategy seams quite simple. But no matter what and how you do it, make sure to have a clear and transparent communication throughout your organization. Everybody has to be on board and support the planned journey, otherwise chances of getting stuck at the harbor and not setting sail are quite high.
And finally, when set goals or targets think about SMART, most important > it has to be realistic - can’t say this often enough.
Checklist: Blue Ocean Strategy
In summary, the following aspects must be taken into account in the Blue Ocean Strategy:
A saturated market with predatory competition does not permit growth.
A new, unrivaled market is created through beneficial innovation.
The existing offer is analyzed from the customer's point of view.
A new range of services or features is created.
Employees in the own company are involved in the implementation.
