High levels of competition and market saturation can be harmful to the growth and expansion of any company, be it a start-up or an MNC. If they are unable to beat their competitors, they are eventually bound to shut down shop.
This scenario, unfortunately, happens too often in the corporate world. Businesses are therefore always looking for strategies or approaches that let them stay one step ahead of their competition. The Blue Ocean strategy is one such approach that can help organisations keep themselves relevant in the market.
Let’s understand the Blue Ocean strategy in-depth and why it can be a life-saving drug for modern-day businesses.
What is the blue ocean strategy?
The strategy is based on the notion that highly competitive industries and saturated markets are like red oceans—infested with sharks and very bloody. This kind of space prohibits the growth of a company of any size or nature.
Instead, companies should head over to a blue ocean—a market space that has little to no competition for their products. This can give them the opportunity to grow and expand their business and capture a new market.
The idea also emphasises that eventually, other competitors can enter your space and make it a red ocean. Therefore, you need to keep reinventing your business strategies and models to stay ahead of your competition.
Where did the principles of the Blue Ocean strategy originate?
This business strategy was the result of a decade long corporate study spanning over 30 industries. The study analysed the strategic moves of companies to exit a crowded, competitive industry and begin anew in a new space.
The study not just surveyed companies that could successfully eliminate their competition but also those who couldn’t and analysed the reasons for their failure.
The research was encapsulated into a bestselling book with the same title in 2005, written by INSEAD professors Chan Kim and Renee Mauborgne. Since then, the data and research have continued to grow, which has allowed business leaders to learn the key differences between mere survivors and winners in the blue ocean.
Successful examples of companies incorporating Blue Ocean strategy
The Blue Ocean strategy has been the backbone of success for many famous brands and companies across the world. Here are a couple of examples where businesses could incorporate the Blue Ocean strategy successfully.
- Ralph Lauren
Ralph Lauren, a famous US-based designer, created his own blue ocean of ‘high fashion with no fashion’ with his renowned brand Polo. He brought together two high traffic fashion groups—classical lines and haute couture. Doing this created a brand-new segment of the audience who desired a touch of the classics in their fast fashion.
- Apple
File sharing programmes like Napster and Kazaa were facilitating the flood of illegal music downloads across the world in the 90s. The trend also took steam from the increasing demand for digital mobile music players.
Observing this market space allowed Apple to create its blue ocean with the launch of iTunes. iTunes allowed you to download legal song downloads at very affordable prices by partnering with music companies. This removed a bone of contention for the general public while keeping the music industry satisfied.
Why should business owners look into adopting a blue ocean strategy for their organisations?
Adopting the Blue Ocean business model can be very beneficial for a company and help them expand their revenue significantly. Here are some of the prime benefits of considering a Blue Ocean approach for your organisation.
- The Blue Ocean strategy is data-backed that prove its efficiency
- It can allow you to set your organisation apart at a low cost
- It allows you to explore uncontested market space
- It allows your company to maximise business opportunities and minimise the associated risks
- You get a detailed step-by-step process to break away from your competition
- It can provide a lot of frameworks and process paths to empower your business
- The blue ocean strategies are easy to comprehend and execute
- It can teach you how to create win-win outcomes for your business.
How can you implement the blue ocean strategy for your business model?
Implementing a Blue Ocean initiative in your company need not be overwhelming and difficult. Here is a five-step process that can help you initiate the change seamlessly across your organisation.
- Connecting the senior management to actual market realities to spot gaps in the demand or a new business opportunity.
- Identifying the right business opportunity for your Blue Ocean initiative and getting the employees on board.
- Focusing on activities that can eliminate the competition or make them irrelevant.
- Distributing leadership responsibilities across different management levels to make the initiative successful
- Pursuing leadership strategies that can have a high impact at a fraction of the usual cost.
As the competition rises in practically every industry, it is essential more than ever to head towards bluer oceans and reinvent your business model or products. Incorporating the blue ocean strategy can help you stand to create a high demand for your products or services and stand out from the crowd.
The best way to study the blue ocean strategy in-depth would be to do it as a part of a strategic business management programme. This allows you to learn about other business management and leadership frameworks as well and develop your individualistic leadership style.
The IBAT College Dublin offers a great Diploma in Strategic Business Management programme that might be ideal for you. This course can help you build a toolbox of efficient business management approaches like the blue ocean strategy or the agile methodology. It also helps you develop your strategy making and innovative thinking skills.
By completing this business analysis course, you can be eligible for a plethora of managerial positions across the corporate world. A few interesting career roles include operations manager, revenue generation head, production supervisor and CEO.
Click here to enrol today in this power-packed programme from IBAT College Dublin.
This article was written by Sweha Hazari.