How to build a Blue Ocean in a Red Sea of products and services?
In a competitive market, it’s easy to get lost in the sea of products. Your product may be great, but if it’s not differentiated from others, it may not gain the attention it deserves. In such a scenario, the Blue Ocean Strategy comes into play.
The Blue Ocean Strategy is a business strategy that aims to create an uncontested market space that makes the competition irrelevant. In other words, it means creating a new market or a niche where there’s no competition, and you can set your own rules.
Differentiating your product is the key to building a blue ocean.
If your product is similar to others in the market, there’s no reason for customers to choose your product over others.
There are a few rare companies that have managed to do just that by creating a “blue ocean” in a “red sea” of products and services.
To clarify, a “red ocean” refers to a crowded and highly competitive marketplace, where many companies are offering similar products or services. In contrast, a “blue ocean” refers to an untapped market, where there is little or no competition, and companies have the opportunity to create entirely new demand.
One excellent example of a company that created a blue ocean in a red sea is Apple. When Apple launched the iPod in 2001, the digital music player market was already crowded with competitors. However, the iPod was the first device that made it easy for users to legally purchase and download music online. By creating an entirely new market, Apple was able to sell over 400 million iPods and create a loyal customer base that would eventually help it launch the iPhone and the iPad.
In contrast, many companies have entered the red ocean and failed to survive. One prominent example is Blockbuster, which was once the dominant player in the video rental market. However, as digital technology advanced and competitors such as Netflix emerged, Blockbuster failed to adapt, and eventually filed for bankruptcy in 2010.
Another example is Kodak, which was once a leader in the film and camera industry. Despite having invented digital photography, the company failed to embrace the technology and instead clung to its film-based business model. As a result, Kodak struggled to stay afloat and filed for bankruptcy in 2012.
Dollar Shave Club created a blue ocean in the shaving industry by offering affordable, high-quality razor blades delivered directly to customers’ doors. By bypassing traditional retail channels and offering a subscription-based model, Dollar Shave Club was able to create a loyal customer base that appreciated the convenience and value of its products.
A study by INSEAD found that companies that create blue oceans have a 30% higher revenue growth rate and 40% higher profit margins than those that compete in a red ocean.
Entering a saturated market does more bad than good. It leads to bloodshed in the form of price wars and all companies end up losing time, money and resources.
Before launching your product make sure you have something that differentiates it from the competitors.
Play smart and create a blue ocean in a red sea ;)
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