A blue ocean strategy is a marketing strategy that creates uncontested market space by creating demand where there was none before. It’s about finding new ways to satisfy unmet needs in your industry. A blue ocean market offers growth opportunities, reduces competition, and increases profits compared to the traditional red oceans of competitive products or services. This article will explore blue ocean strategies, what they are and how you can use them to create an advantage over your competitors!

Blue Ocean Strategy Definition

A Blue Ocean Strategy is used to describe a market with no competition or merely little competition. This approach entails looking for a business with only a few competitors and no price pressure. In blue oceans, demand is generated rather than fought over. This is the opposite of what happens in a red ocean market where companies fight for their share of the existing order, common price wars.

What Does the Blue Ocean Strategy Mean in Marketing?

A blue ocean strategy is a market-creating business approach that seeks to create and capture blue oceans – untapped emerging markets ripe for growth. The term was coined by W Chan Kim & Renée Mauborgne in their groundbreaking book Blue Ocean Strategy. They explain how companies can gain an advantage over their competitors by creating blue oceans rather than competing in red oceans where the competition is most vital.

The blue ocean strategy was developed through research into 150 strategic moves spanning more than 100 years and 30 industries. It found that lasting success came not from battling competitors but via innovative business models designed to deliver superior value to customers effortlessly.

To create blue oceans, companies must define their strategic intent – the specific growth objectives they seek to achieve – and develop a corresponding blue ocean business strategy. They also need blue ocean capabilities for delivering this value, which can be created in conjunction with partners or alliance networks as required. Once these blue ocean strategies have been executed successfully on a small scale, blue oceans can be scaled up and rolled out across the organization.

For example, Cirque du Soleil created a blue ocean in the circus industry by transforming it from one centered on animal acts to one that highlighted human acrobatic skills. In addition, Cirque redefined what was considered possible with elements such as an artistic approach to performance, a dramatic storyline, and the use of music to enhance audience involvement.

By removing animals from their shows and focusing on acrobatics (and not clowns), Cirque created blue oceans in both their market space – with a focus on human skills rather than animal tricks; and in price strategy – with ticket prices that reflected higher quality entertainment without breaking the bank. They also changed how their industry operates by changing the rules of what is possible and bringing a blue ocean strategy to life through their business model, marketing approach, customer service policies, and organizational structure.

Blue Ocean Strategy Five Steps

Blue Ocean Strategy identifies five steps for companies to follow when creating blue oceans:

Step One – Identify the most attractive growth opportunities in your industry by asking, “Where will you be as a leader rather than a follower?” Your goal is to go beyond existing demand and create new market space. For example, the blue ocean shift leverages disruptive technology, or an untapped market needs to develop new order or a blue ocean.

Step Two – Target noncustomers as blue ocean opportunities, asking, “What are the commonalities between your best customers and those who have not historically bought from you?” By selling to this blue ocean of noncustomers—or nonconsumers—a company can unlock an uncontested blue sea and create blue oceans of profit.

Step Three – Develop blue ocean offerings, asking, “What can you offer these noncustomers that delight them?” This means considering the needs of your potential customers in new ways to develop blue ocean ideas for products or services—and then turning those blue ocean ideas into specific blue ocean offerings.

Step Four – Create blue ocean structures, asking, “How can you organize to deliver this blue ocean offering at the right price and capture blue oceans of profit?” This involves considering an appropriate business model for your blue ocean strategy—one that will set up a company not just to compete but also to create new demand and market space in blue oceans.

Step Five – Make the blue ocean shift happen, asking, “How can you successfully execute your blue ocean strategy?” Once blue ocean strategies have been developed and the organizational structures put in place to deliver them, companies must learn how to implement these blue oceans of profit across all functions—and at every level of the organization. This requires full support from top management and blue ocean leadership.

Who is Blue Ocean Strategy for?

BlueOceanStrategy.com was created to help entrepreneurs, intrapreneurs, and innovators around the world learn more about blue ocean strategy – who it’s for, where you can find blue oceans in your industry and how do they work. In addition, the information on this site can help blue ocean strategists, blue ocean offerings, and blue ocean structure designers.

It is for CEOs, entrepreneurs, and intrapreneurs who want to generate breakthrough growth in today’s challenging business environment by creating blue oceans of good demand where they didn’t exist before; the small company seeking a time-tested strategy for outsmarting much larger competitors; and blue ocean shift teams or organizations that want to develop a blue ocean strategy, identify blue oceans of profit and execute successfully.

Examples of Blue Ocean Companies

Some blue ocean companies include:

Nike, Apple, and IKEA redefined their industries by creating blue oceans of new demand. Let’s look at each one to see how they did it.

Apple launched the iPod in 2001; within six years, over 100 million iPods were sold worldwide with no signs of slowing down. Now that’s blue ocean success!

Nike redefined their industry as a blue ocean company with the Nike+ platform and community – it was a new product line/service offering, business model, and structure at once.

IKEA grew from three stores in 1958 to 300 stores across 29 countries today by continuously creating blue oceans of new demand.

Before we finish you should check those posts about Business Marketing Strategies, How to Learn Marketing Skills, Creating a Marketing Funnel.

Conclusion

What is the Blue Ocean Strategy? In essence, it’s a way of rethinking the conventional marketing approach. It offers an alternative to the traditional “Red Ocean” strategy, which sees competitive companies vying for the same customers in a given industry space. Instead, you can make your blue ocean of untapped potential by thinking outside the box and creating new market spaces or unique products! If this sounds like something worth exploring more, check out our blog posts on how we helped clients with their B2B digital marketing strategies using Blue Ocean Strategy principles. Are you ready to explore this innovative methodology for yourself? Contact us today, and let’s get started on your next great idea!

Author

Professional consultant and project manager in software houses. He has over 8 years of experience as a project manager for key clients. Currently mainly works on business consulting and communication with strategic clients. Privately a fan of good food, board games, and cycling. He loves to share his experience with new people!

Write A Comment