Everyone dreams of it. Everybody wants one. And almost nobody has the guts to even try. A new market full of business opportunities. A new market in which you are alone. And you'll be alone for a long time. A market without competition. Relevant competition. Because you've come up with something that your customers, and others too, are completely consumed by. Suddenly nobody cares about price. Everybody wants what's in your hand.
It is not difficult to create such a market. You just have to want it. And follow the methodology of the blue ocean strategy. This topic has resonated with me for almost a year now. I've been helping companies break out of the competitive rat race of selling by the hour, machine time or ton of material. That's why I've served up 11 articles here on the blog about how to get started with a blue ocean strategy, how to use its tools in your company, and what it can do for you.
Let's put this in order and recap the main points and individual tools of the Blue Ocean strategy that you can already work with.
What is the Blue Ocean Strategy
The Blue Ocean Strategy is a unique approach to business that focuses on creating new markets where competition is virtually non-existent. The methodology was first introduced by W. Chan Kim and Renée Mauborgne in the book Blue Ocean Strategy, published in 2005. According to a lot of research I've read, it's one of the top 10 business books and one of the top 10 business approaches of the last 50 years.
Blue Ocean is a whole new way of looking at the markets around us. It's a way to make markets your own and to create your own markets. It is an alternative to the conventional approach that forces you to look at your business strategies from a different angle. It doesn't matter if you're a startup, small or medium-sized business. Anyone can have a blue ocean. This article will reliably introduce you to the basics of Blue Ocean strategy.
How to choose a product for the blue ocean
How to get started with the Blue Ocean Strategy? How to create a new market? All you need is common sense, a little creativity, an interest in what's going on around you, and an understanding of what's happening in your market. First, choose the product or service you want to innovate. Small and medium-sized businesses should choose their core "thing", that is, what forms the core of their offering. You can read how startups and larger companies should proceed in this article.
Where to next? As with any strategy, the Blue Ocean Strategy first needs to take stock of the current situation. Map the competition. To do this, you can use a value curve, a simple graph that tells you which parameters your competitors consider important and what the level of supply of the main competitors in the market is.
Map the market and customers
In the next step, it is important to map out the benefits for the buyer. This is done through a table that captures the stages that the buyer goes through when using the product or service (purchase, delivery, use, maintenance, disposal...), as well as the different ways in which the company can increase the value of its offer (simplicity, convenience, productivity, fun, environmental impact...). Within moments, you'll read what the biggest barriers your current customers face in buying and using your product or service, and what deters potential ones.
But the blue ocean strategy also asks why there are people in the market who are not buying from you. There are very likely many more than those who are already your customers. These are not people you want to sell skis to, but they don't ski. These are individuals who like winter but enjoy it in a different way. Blue Ocean's strategy refers to them as non-customers and divides them into three groups. Every business should thoroughly research these three groups and try to understand what is stopping them from buying.
The aim is to find added value
While standard strategic approaches (red ocean) focus on c o m p e t i n g within established boundaries, the blue ocean strategy actively breaks down these constraints and seeks a suitable alternative. It does so in 6 steps, where 6 different avenues need to be explored in detail, such as the segment or industry you are in, the strategic customer group, the scope of the offering or how it is perceived by customers. If you manage to break down each point, at the end of the journey you will see new added value.
If you've made it this far, congratulations. You have mapped the market situation and now you can do something about it. You know what your customers and non- customers want. You know what's not important to them. You just have to decide accordingly and offer real value. Ignore the parameters that are not important to your customers and bring them nothing. And instead, work on what your customer considers important.
Ideally, do it in such a way that you can reduce production costs, differentiate yourself from the competition, and not affect product quality and demand. The whole process will be made easier by the ERRC matrix, which will allow you to implement all the points you put down on paper.
As a result, you reduce your costs while offering something unique with new added value. This is at the heart of the value innovation that underpins the whole
blue ocean strategy. You will outperform the competition. In every way. A drop in costs doesn't necessarily mean you'll lower the price to the customer. Most of the time it's just the opposite, and value innovation will lead you to greater profitability. Especially if you learn to set a price that most people can accept.
Blue Ocean for all companies
Over the last five years, the market has changed radically across segments. New demands are emerging and need to be addressed. But every change brings with it the chance to find a new place in the market and start to thrive in the long term. Shine. That's why now is the best time to test the blue ocean. Start thinking differently. Try a new approach. Regardless of the size of your business.
If you are interested in more detailed information about the individual tools of the Blue Ocean strategy, click on the links below which you will find articles that discuss each tool in more detail. If you need help implementing a Blue Ocean strategy in your company, please contact me. I'd be happy to discuss your questions with you, perhaps in a 30-minute video consultation. So, let's get to the blue ocean.