The best way to beat the competition is to stop trying to beat the competition.
Overcrowded, competitive, demanding, dog-eat-dog world.. All of these words could easily describe the marketplace we sell in today. Not the most attractive picture, is it? Which is why plenty of companies have brainstormed a solution to save their business from the cruel tender - by simply avoiding the whole competition “thing”. And this “competition irrelevance” is the ground for Blue Ocean Strategy. How to implement blue ocean strategy is the question we rise here.
So what is this Blue Ocean Thing About?
Originally came as a book in 2005, the research conducted by two professors W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy is now the ideology vast majority of businesses try to follow. By studying 30 corporations and 150 deeds they came to a conclusion a company can succeed not by fighting for a place in the sun - but by creating another sun to lie under.
Let me share a case of some companies that use blue ocean strategy that was described on blueoceanstrategy.com recently. Let’s imagine you work in wine industry. You can barely imagine the amount of corporations selling wine as well - the market is as Red as the wine you sell. But after years of market investigation you come up with an idea on how to make a change. Pretty simple one - you just start selling blue-coloured wine instead. As a result you create your own Blue Ocean - by entering a niche nobody thought of.
Why is it better than Red Ocean Strategy then?
Ocean is called Red not because it is the opposite colour to blue - but because it represents the blood in water. Imagine what a swimming experience with sharks would be like. Would you dive in if you had a choice? Not hard to deduce what your answer will be. This is the main difference between blue ocean and red ocean strategy.
The same parallel could be drawn for the market we currently have. All the retail spots are already occupied with giants of industry, leaving no air to breathe for smaller companies.
However, the company offering something others don’t automatically gets categorised into the “unique value proposition” field. The benefits of the Blue Ocean Strategy are clear. So what if you go beyond the existing marketplace by creating one of your own?
But Let’s Stay Grounded.
Despite how lucrative Blue Ocean Strategy might seem, don’t get a wrong impression. Further consideration shows it still has some weak points in it. Granted there are thousands of startups appearing every day, the vast majority don’t hit the jackpot. Why is it that so many original ideas drown in the turquoise waters?
Products irrelevance, lack of target audience, money investment risks - all of the mentioned can make you less enthusiastic after all. If the timing or place for the product are chosen randomly - this could also affect the overall success.
There are a few question-tools which, if asked beforehand, might prevent your Titanic from hitting the iceberg and result in the blue ocean strategy implementation as a successful one.
1. How deep is your market research?
Whatever business you choose to grow, achieving awesome results will not be possible without a decent market analysis with all the advantages and disadvantages. So when you analyse - make sure you have these principles covered:
- the niche industry overview;
- the target audience profiling;
- competitors analysis;
- laws and regulations awareness upon the product;
A complex process like this requires time and consideration, which why we go through at the market circles thoroughly, to make the most accurate conclusions in the end.
2. Your MVP - is it well-thought enough?
Taking the experience of Apple and Facebook into account, every great product launch requires a beta-version first. Consequently, every entrepreneur must include the Minimum Viable Product release into his account book. Even after all the ideas proved and studies conducted there still is a slim chance the audience’s reaction might be different from what you expected. Which is why we advise to try MVP as the products core idea first - to receive feedbacks.
Read about the importance of business analysis
Second player here would be Product’s Unique Value Proposition. On this spot everything depends on your imagination and creativity. If you know the soft spots your market has - it helps to create your own Ocean within the existing one. Not necessarily you should re-invent wine colour; an improved (in terms of pricing of functionalities) old product is a decent option. Just make sure the “improvements” are really needed.
3. Willing to spend costs on marketing?
It is a common saying in Slavic countries “Advertising is the trade’s engine”. Quite the case for your case, as your product is still unheard of. Marketing is what comes to play here, but there is no need to tell you marketing is not cheap - in fact, it’s pricy to advertise your product virally. According to the statistic Mind Studios made - the average cost of the marketing campaign is likely to cost as much as the development has already. Perhaps it would be a wise choice to calculate your promotional expenses in advance.
4. Do you have a user-feedbacks analysing tools set?
This is the final step before the full-product launch comes. The feedbacks upon your MVP (not even the whole project, but a bold idea) will only come after the product has been advertised widely, letting every user get to know it and share his opinion later. But it’s also a challenge to receive them - toolkit should be ready. Speaking from experience we and our clients have - Google Analytics, Google forms and surveys + email newsletters have proved to be effective and interactive.
If you said a persuasive “yes” to all of the questions and characteristics above - you better stop reading this article as your business is bound to succeed.
As we practise these processes every day we fully understand the cruciality this strategic moves have. When analysing BM for client’s project, we study every stage - from market research and up to product advertising.
If you’re interested to get some more info about business modeling - you are most welcome to read about the importance of a Business Model here.
“Making competition irrelevant”
Or so it is said in the book of W. Chan Kim and Renée Mauborgne. Same as they, we don’t claim taking a Blue Ocean Course easy and smooth sail - we just say it is energy-saving in a long-run race, especially if you have taken all the precautions recommended.
Here is what we talk about when we talk about Blue Ocean Strategy - the basics it stands on. Although you must have worked in retail also, have you not? Which strategy - Blue or Red - would you take for your business?