How to implement the blue ocean strategy
Posted: Thu Dec 05, 2024 10:41 am
We have become accustomed to talking about saturated, dynamic and highly competitive markets. Getting strategies that are effective in achieving profitability is a challenge. That is why other strategies have emerged, such as the blue ocean strategy . This is characterized by seeking out market spaces where there is still no direct competition and where gradual growth can be achieved by applying innovation.
In this article, we will learn about its characteristics and advantages and differentiate it from another similar one, the red ocean. But if you want to lead business transformation projects and implement innovative strategies like this, you may be interested in training with our Master in Customer Experience . You will acquire the necessary skills to design and execute projects that offer unique experiences to customers.
What is blue ocean strategy?
Blue ocean strategy was developed by W. Chan Kim and Renée bc data philippines Mauborgne in their book "Blue Ocean Strategy" . Their argument is that companies can achieve remarkable growth if they decide to leave competitive markets that are saturated, which they call red oceans , and create new ones where there is no competition. These would be the blue oceans.
This business strategy is based on innovation, with the aim of offering something new to consumers . That something must have exceptional value for the customer , which cannot be easily imitated by the competition. In this way, the increase in demand is facilitated and the risk of competitors managing to gain more market share is reduced.
However, the key to the blue ocean is to redefine market boundaries and create new categories , whether of products or services, rather than competing for a share of an existing market. When competitive pressure is removed, it is easier to maintain progressive growth.
Blue Ocean
How is it different from the red ocean strategy?
The key difference between blue ocean and red ocean strategies is how they approach competition and value creation . In red oceans, companies compete in saturated markets, where growth is limited and competition is fierce. Profit margins are squeezed as companies fight to gain market share. Price wars are common, and progress can only be made by staying ahead of competitors.
However, in the blue ocean, destructive competition is avoided. To do this, saturated markets are left behind and new ones are created. But this is not an easy task, since a value proposition needs to be developed with unique products and services that are capable of redefining how consumers perceive them.
Advantages of the blue ocean business strategy
Innovation and differentiation
When you choose to innovate and launch something new on the market, you can reach a new audience and stand out from other companies that have been around for longer. Innovation can be linked to multiple aspects . For example, technology, customer experience or the business model.
Higher profit margin
Operating in a market where there is no direct competition avoids the pressure to set a certain price that is competitive. In a blue ocean, a premium price can be set, which will consequently increase the profit margin. Today, with digital transformation, this is particularly important; technological innovation, such as AI projects , facilitates the creation of products with high added value.
Sustained growth
By not having to fight for a piece of a market, it is easier for a company to expand without having to face traditional obstacles. This vision is also useful when crises occur, such as the pandemic . The blue ocean strategy seeks to adapt to new market needs and find opportunities that have not been taken advantage of.
Adaptability and flexibility
Creating a new market or redefining an existing one involves constantly re-evaluating value propositions. An innovation manager would have to lead digital transformation initiatives that respond to emerging trends. For example, automation and artificial intelligence.
In this article, we will learn about its characteristics and advantages and differentiate it from another similar one, the red ocean. But if you want to lead business transformation projects and implement innovative strategies like this, you may be interested in training with our Master in Customer Experience . You will acquire the necessary skills to design and execute projects that offer unique experiences to customers.
What is blue ocean strategy?
Blue ocean strategy was developed by W. Chan Kim and Renée bc data philippines Mauborgne in their book "Blue Ocean Strategy" . Their argument is that companies can achieve remarkable growth if they decide to leave competitive markets that are saturated, which they call red oceans , and create new ones where there is no competition. These would be the blue oceans.
This business strategy is based on innovation, with the aim of offering something new to consumers . That something must have exceptional value for the customer , which cannot be easily imitated by the competition. In this way, the increase in demand is facilitated and the risk of competitors managing to gain more market share is reduced.
However, the key to the blue ocean is to redefine market boundaries and create new categories , whether of products or services, rather than competing for a share of an existing market. When competitive pressure is removed, it is easier to maintain progressive growth.
Blue Ocean
How is it different from the red ocean strategy?
The key difference between blue ocean and red ocean strategies is how they approach competition and value creation . In red oceans, companies compete in saturated markets, where growth is limited and competition is fierce. Profit margins are squeezed as companies fight to gain market share. Price wars are common, and progress can only be made by staying ahead of competitors.
However, in the blue ocean, destructive competition is avoided. To do this, saturated markets are left behind and new ones are created. But this is not an easy task, since a value proposition needs to be developed with unique products and services that are capable of redefining how consumers perceive them.
Advantages of the blue ocean business strategy
Innovation and differentiation
When you choose to innovate and launch something new on the market, you can reach a new audience and stand out from other companies that have been around for longer. Innovation can be linked to multiple aspects . For example, technology, customer experience or the business model.
Higher profit margin
Operating in a market where there is no direct competition avoids the pressure to set a certain price that is competitive. In a blue ocean, a premium price can be set, which will consequently increase the profit margin. Today, with digital transformation, this is particularly important; technological innovation, such as AI projects , facilitates the creation of products with high added value.
Sustained growth
By not having to fight for a piece of a market, it is easier for a company to expand without having to face traditional obstacles. This vision is also useful when crises occur, such as the pandemic . The blue ocean strategy seeks to adapt to new market needs and find opportunities that have not been taken advantage of.
Adaptability and flexibility
Creating a new market or redefining an existing one involves constantly re-evaluating value propositions. An innovation manager would have to lead digital transformation initiatives that respond to emerging trends. For example, automation and artificial intelligence.