Can a company create a blue ocean for itself in an already highly competitive market? What are the possibilities of creating a blue ocean in a tough competitive market? These questions are very well answered in the book ‘Blue Ocean Strategy’, and the book focuses on the factors that can help an organization to create a blue ocean for itself in an unending tough market.
What Exactly is a Blue Ocean?
The book describes the blue ocean as that space in the market, which is still unidentified by the competitors of an organization. It means the company should focus on “Value Innovation” to create that space for itself in the market. The book outlines ‘Don’t beat the competition, but make it irrelevant with Value Innovation’. Now you must be thinking, what is Value Innovation and how should a company practice Value Innovation?
Blue Ocean
Value Innovation
Value innovation connects the two most important terms needed for success in a competitive market: Value and Innovation. According to the book a company must place equal emphasis on both value and innovation. If a company focuses only on value, then it loses out on creating a unique place for itself in the marketplace, which can only be achieved through innovation, So, the bottom line is value innovation is the key to success for a company that is trying to make its mark in a highly competitive market.
Here value innovation is not about using cutting edge technology or utilizing the right opportunity to enter the competitive market, but it is about aligning a company’s innovation and creativity with utility, price, and cost positions. Consumers are looking for innovative services, but at an affordable price, with enhanced utility and features. Providing a product at an affordable cost means lower production or services cost for the company, and this is definitely an excellent bargain.
Value- Cost Tradeoff
Blue ocean strategy pulls a company out of a very competitive ‘Red Ocean’ by breaking the rule of Value- Cost Tradeoff. It believes in creating a unique marketplace for the company which is still unexplored by a company’s competitors. It explains how a company should stop making a choice between differentiation and low cost. According to the book every company should focus on creating blue oceans where it can practice both: differentiation and low cost.
Most of the companies across the world are trying to spend billions of dollars to beat the competition strategically, but does it actually make a huge difference to the market share of the company. The answer is No, as benchmarking competitors in the old traditional way does not yield the desired results for success. You are actually just trying to choose between differentiation and cost leadership. Why make this difficult choice, and that too at the cost of spending billions in dollars for beating the competition.
This is just the starting point of the book, and the journey goes on with various successful, case studies like Cirque du Soleil, Casella Wines etc. strategically analyzed and well- explained in the book.
[…] Can a company create a blue ocean for itself in an already highly competitive market? What are the possibilities of creating a blue ocean in a tough competitive market? These questions are very well answered in the book ‘Blue Ocean Strategy’, and the book focuses on the factors that can help an organization to create a blue ocean for itself in an unending tough market. […]