Imagine a world where you can create your own unique market space, free from cutthroat competition. Does that sound like a dream? In reality, there’s a strategy that helps a start-up discover innovative ways to deliver exceptional value to its customers, leaving the competition far behind.
And if you have guessed it, we are talking about the blue ocean strategy! So, if you are ready to make waves in an uncontested market space, read along!
What is the Blue Ocean strategy?
The Blue Ocean Strategy is a business theory that suggests companies should focus on creating new market space rather than competing in existing markets. W. Chan Kim and Renée Mauborgne introduced the concept in their book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.
This approach challenges businesses to move away from traditional competition-based strategies and instead focus on creating uncontested market spaces. The key principles of the Blue Ocean Strategy include value innovation, which focuses on simultaneously reducing costs and increasing value for customers.
Coming back to its concept, the book divides the market universe into 2 main parts: Blue Ocean and Red Ocean. Let’s quickly understand what they mean.
Blue Ocean Vs Red Ocean
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Credit: https://www.blueoceanstrategy.com/
” align=”justify”> Credit: https://www.blueoceanstrategy.com/
A blue ocean represents an untapped market space where competition is irrelevant because the company has created a new demand for its products or services. On the other hand, a red ocean represents companies competing in existing markets, trying to outperform each other through price competition or product differentiation. This results in a crowded and saturated market where margins are constantly under pressure.
Blue Ocean strategy examples
Tesla
Tesla revolutionised the automotive industry by introducing electric vehicles that perfectly blend advanced technology and sustainability. With their emphasis on sophisticated design, top-notch performance, and environmental friendliness, they appealed to a new generation of eco-conscious consumers willing to pay a premium for such products.
Nintendo
Nintendo revolutionised the gaming industry by targeting non-traditional gamers with its Wii console. By focusing on intuitive gameplay and family-friendly content, the firm could tap into a new market segment previously untouched by its competitors.
Zerodha
One of the most famous examples of a company that successfully implemented the Blue Ocean Strategy in India is Zerodha. They introduced a user-friendly platform and low-cost pricing model that created an uncontested market space in the brokerage industry. Zerodha also successfully attracted non-investors to their app resulting in rapid growth and market dominance.
Oyo Rooms
Oyo Rooms is a hospitality chain that was founded in 2012. It has changed the way people perceive budget-friendly accommodation options in the Indian hospitality industry. Unlike expensive hotels that offer extravagant features such as fancy lobbies, elegant lounges, and spas, Oyo focuses on providing amenities. These include free wifi, AC, television, and good hygiene at an affordable rate.
The bottom line
The Blue Ocean Strategy is a revolutionary approach to business strategy that encourages companies to think creatively and come up with unique market spaces. By focusing on value innovation and identifying new growth opportunities, companies can break away from the competition and achieve sustainable success. Whether you are a startup or an established corporation, the principles of the Blue Ocean Strategy can help you chart a new course for your business and drive profitable growth in today’s competitive market environment.
