Many would say today’s market place is saturated by all kinds of businesses competing with each other to acquire as big of a market share as possible. Everyone wants to be known as the best at what they do. However, new players are emerging every day. All of them carry the same hunger for profits and the same desire to participate in the competitive world we live in today.
Because there are so many players, it’s difficult for a single business to come across as unique. They aspire to make themselves more noticed over competitors in an attempt to capture as many consumers as possible.
The question is, therefore, how can a company successfully distinguish themselves when there are so many others offering the same thing?
The term blue ocean came into existence along with its opposing term red ocean, when professors W. Chan Kim & Renée Mauborgne first introduced them in 2004 in their classic book Blue Ocean Strategy, which quickly became a bestseller as people starring referring to it as the best strategy book ever written.
According to the authors, the term red ocean refers to all the industries that are in existence today. In here, there is a known and well-defined market with well-defined competitors, all aggressively chasing consumers. Every business knows the rules and boundaries of the game, and they are all competing in a bloody competition for people’s money.
On the other hand, the term blue ocean represents the unknown market. One that is empty, with no established players because it has not yet been discovered. In this ocean, demand does not exist. Whoever discovers it first holds a big advantage over everyone else. Figuring out how to access this untapped marketplace might be the solution to knowing how to differentiate your businesses from anyone else’s.
To better illustrate this concept, let’s consider Apple’s media player iTunes. The company realized that people all over the world were illegally downloading and sharing music. They saw this as an opportunity before anyone else did. By doing so, they were able to create and enter a market that was nonexistent until then. As digital music became even bigger, Apple was able to capitalize from it by launching iTunes, the first of its kind, in 2003. Since then, this music streaming application has dominated the digital music marketplace for over a decade.
Another interesting example of a company that was able to successfully apply the blue ocean strategy is Netflix. Instead of trying to compete with other movie rental players, they created something that again, was nonexistent. The company became the first streaming content provider that included movies, TV shows, and documentaries. Netflix was able to create its own demand rather than compete for it with others. From offering online movie rentals in 1997 to being able to predict what movies subscribers would be interested in watching, Netflix is a company that has demonstrated the blue ocean strategy particularly well.
Learning how to apply the Blue Ocean Strategy is not an easy task. That is why it is important for those businesses that would like to create something new to make sure they have the correct group of people with the right mindset to successfully implement this technique. A thorough understanding of the term is required for anyone that will participate in the initiative. This is when the book might be useful as a good source of information. After constructing this team, businesses should carefully examine hidden opportunities in the marketplace and try to identify what can they do that no one else is currently doing.
To some, this concept and what it proposes might seem too ambitious. Trying to create new markets can be an overwhelming task, but businesses should not be discouraged by that. On the contrary, knowing that there is a way for companies to move away from crowded markets and into “blue oceans” can open up a world of possibilities. Thinking that they could become the next pioneers of a new industry should be something that encourages them to take on the challenge, just like Apple and Netflix did.