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Blue Ocean Strategy A New Way to Grow Your Business

18 Aug 2023

Introduction

  • In today's competitive business landscape, standing out from the crowd can be a challenge for companies.
  • Creating a new market space where there is no competition is the very idea behind the blue ocean strategy.

What is the Blue Ocean Strategy?

  • The blue ocean strategy focuses on creating uncontested market space to make competition irrelevant.
  • It's based on the idea that competition is often destructive because companies lower prices and compete on unnecessary features.
  • Instead, it aims to focus on creating new demand by offering products and services that are both innovative and affordable.

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What are Some Examples of the Blue Ocean Strategy?

Some of the companies that have successfully adopted this strategy are:

  • Nintendo

  1. Nintendo's home video game console, called the Nintendo Wii, is a great example.
  2. By pursuing value innovation, Nintendo simultaneously reduced costs and differentiated itself from competitors.
  3. The console dropped some features found in other game consoles, such as hard disk and DVD functionality. Instead, it introduced a wireless motion control stick.
  4. This step allowed Nintendo to offer unique benefits like fitness gaming and social group play.
  5. By venturing into uncharted territory, Nintendo could reach non-gamers, the elderly, and parents with young children.
  • Yellow Tail

  1. Yellow Tail is a wine brand that created a new market space by offering a sweet, affordable wine that was easy to buy.
  2. By reducing or eliminating the elements that the wine industry competed on, Yellow Tail was able to reach a novel set of customers.
  3. This helped the company become the fastest-growing wine brand in the history of America.

How can Companies Adopt the Blue Ocean Strategy?

The three critical factors required to adopt the blue ocean strategy are:

  • Mindset: It requires companies to break away from traditional concepts and explore untapped areas. Salesforce is a good example. It revolutionized customer relationship management by offering a cloud-based subscription service.
  • Management tools: These are essential for a systematic shift. They allow for gradual movement and unlock profitable growth.
  • Humanistic process: It must be emphasized; it helps inspire confidence and drives successful execution.

What is the Process of Adopting the Blue Ocean Strategy?

The five-step process for implementing the blue ocean strategy is:

  • Constructing a 'blue ocean' team
  • Understanding the current situation
  • Identifying pain points and untapped potential
  • Systematically reconstructing market boundaries
  • Conducting rapid market tests before finalizing and launching the shift

What are the Key Benefits of the Blue Ocean Strategy?

  • It helps companies cut loose from traditional business models and expand their demand and profitability.
  • It helps companies increase their value, innovate, and create new value for customers, thus developing their growth potential.

Conclusion

The blue ocean strategy is a strategic planning tool that helps companies acquire new markets.

 

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