What is Blue Ocean Strategy?
What do you think of when you hear Blue Ocean? Maybe you are imagining a nice island vacation, cruising on a yacht, or maybe …. solitude. How does Blue Ocean translate to business startups?
Companies use Blue Ocean Strategy to create an uncontested market space. A space that does not yet exist, essentially an area where there is no competition. Similar to the vacation metaphor, blue ocean translates to a lot of open available space for your product. Blue Ocean strategies are beneficial to both existing businesses and startups. It creates product appeal for neglected or overlooked customer groups. This article focuses on the specific benefits of the Blue Ocean strategy for startups.
For startups in general, the road to success is an uphill battle where initially risk is much higher than reward. Fortunately, the Blue Ocean strategy leverages advantages of being observant, discovering and delivering value that has not existed before all which are accessible qualities to a startup. Without a reputation, startups can dive deep on what is new and find what is lacking.
Blue Ocean is appealing because it not only guarantees no competition, but value proposition is created where it ceases to exist. To be successful within any business you need to fulfill a need for consumers. Blue Ocean strategy helps to identify needs and deliver the value to the untapped customers. Sometimes it’s just about finding a need that people didn’t even know that they needed in the first place!
The Risks of Diving
When utilizing the Blue Ocean strategy, the biggest risks involved include finding the right product or idea to thrive in the prospective environment. The goal is to discover something that is innovative, adds value and to execute it successfully. Finding a new market is not easy and ideas can fail. Ultimately it is up to the startup to do enough testing to make unique ideas prosper.
Timing is another risk and determining factor for the success of your product. Investigating trends and macro/micro qualities of the economic environment will predict if the market is ready to commit to your product. With an amazing product and no other competitor, the risk then is there may be no consumers to grab bait. Having the patience and dedication to know when is the right time for release is essential. Being the first one in the market also doesn’t translate to success. For example, there were other computers that emerged before the Mac Computer, but Apple’s dedication to their unique qualities brought them the success we see today.
Another risk to consider is the correct execution for your product. Understanding who your customer is, the needs your product fulfills and presenting the solution effectively will fortify Blue Ocean success.
Red Ocean or Blue Ocean?
Blue Ocean is as mentioned above, the uncontested market, with lots of clients the only competition is yourself. If other competitors exist, creating similar products with better quality or lower prices, this then becomes a Red Ocean. Can you create a Blue Ocean when the invention already exists? Yes! When you think of Japanese automobile manufacturers, you automatically think of small, fuel efficient vehicles emerged in the 70s. This may not seem unique today but this remains an uncontested market today. The goal of Blue Ocean is not to be the only car in the market, but provide distinguishing value while lower your cost. Consumers will think of you first and go to you first to fulfill their unique needs.
Applying Blue Ocean Strategy for your Startup
Failure is as prominent as success and if you do find your Blue Ocean it typically doesn’t last forever. Over time there will be others that want a part of the pie. The key to staying afloat relies on dimensions of your idea, and navigating back to the Blue Ocean.
To get the best out of Blue Ocean Strategy, it is important to have a look at the big picture and visualize your current positioning. Look at the global map to find a unique place to be. As companies continue to pop up, these uncontested waters will be more and more difficult to find. Startups have the advantage of researching this before their product is on the market.
It is easy for founders to focus on the small details within a strategy, but it is important to see the entire playing field. What product, customer, and marketing KPIs can you identify and how do they measure up? This allows a startup to assess and observe possible competitors and predict how the industry will react.
Next, having a vision for your startup is important. A team should agree on the destination for the startup and understand the assumptions and competition when entering the market. This allows the startup to identify the opportunities and see if an idea will float or sink.
Time to Dive In
In conclusion, all businesses rely on the idea of innovation: solving new problems, existing problems, or creating something entirely new. When approaching the public with your idea there are many qualities that will help to sustain and support your success. Results are never immediate: trust, preparation, being open to change will help keep you afloat until you find your spot in the ocean.
The most important thing you can do as an entrepreneur is continue educating yourself on the ever changing business environment. The key is knowing when your idea needs refurbishing, pivoting and what tools to use to get through barriers. Innovate, Execute and Repeat… these are all things that will lead to success; In other words, stay swimming until you find your Blue Ocean.
Interested in learning more about Blue Ocean Strategy? Here are a few resources to get a more in depth look.