How To Use Blue Ocean Strategy To Grow Your Business.
I was just asking myself why haven’t I written about this topic yet when this topic fascinates me, my doctoral thesis was actually based on Blue Ocean Strategy, big thanks to my project supervisor who actually made me fall in love with Blue Ocean Strategy during my MBA when the seed was first planted.
What Is Blue Ocean Strategy?
According to Kim and Mauborgne (2005) “Blue Ocean strategy, is described as untapped market space, demand creation, and the opportunity for highly profitable growth and making the competition irrelevant”. Nevertheless, it is a known fact that some new market usually began from within an instance competitive market referred to as red oceans, so by growing industry boundaries and by innovatively changing the rules of the game altogether, the chances of market survival looks great. In other words, Blue Ocean Strategy seeks to redefine the concept of strategic positioning by exploring areas that are ignored or not served to gain competitive advantage by way of value innovation as the main focus and try to create customer demand and exploit untapped markets. Companies pursuing blue ocean strategy must consider innovation that holds value for their target market.
It’s all about differentiating your business from the pool of competitors who are doing the same business and have the same customers. But the thing is, you can still dominate the market if you drill down and study your market you will discover that there are tons of customers who are been neglected which means these customers represent an untapped market segment waiting to be served or you could focus on serving them differently by slightly changing the way products and services are being provided to these customers in the industry, with this move you provide an innovative alternative option which will be accepted.
This is where most entrepreneurs, solopreneurs, and start-ups shine and grow without going head to head with the already established companies. It’s really not complicated to follow the path of Blue Ocean Strategy if you can see the big picture, you need to have a clear understanding of your target market and get down to creating your strategy and applying the principles to help you sail the Blue Oceans.
To visualise opportunities in your current market and grow your business, I recommend using the Blue Ocean Strategy ERRC grid developed by Chan Kim and Renée Mauborgne, It is a simple matrix tool that drives companies to focus simultaneously on eliminating and reducing, as well as raising and creating while unlocking a new blue ocean within an industry. There are four questions that need to be considered in the framework.
See below grid.
Even with the global recession and current pandemic with many businesses struggling through the crisis, some companies are still coming out on top, this is actually the perfect time for innovative entrepreneurs to start a business and existing businesses that are able to solve real problems grow, a perfect example is Netflix, during the first few months of the pandemic Netflix when billions of people where stuck at home with not much to do, Netflix benefited from an unprecedented health crisis that hit the entire world, it is now the world’s largest online TV network, with billions of subscribers binge-watching all sorts of movies and TV series online to help them cope with the quarantine. They turned consumers pain points into business opportunities to increase their global subscription.
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When Netflix first entered the market 23 years ago, they saw an opportunity in online movie rentals, they studied the market, which as at the time a red ocean with lots of competition in DVD market sales, but they saw the bigger the picture with opportunities in the blue oceans filled with unserved customers and changed the rules of the game, they consistently improved on their business model over time until it became the world’s number one subscription-based online streaming service.
According to bstrategyhub, when Netflix was introduced in 1998, they provided services to customers through means of mailing out physical copies of movies, shows, video games and other forms of media through standard mailing system, but fast forward to 2020 during the start of the pandemic, Netflix was there to solve issues with theatres being shutdown, consumers were able to watch TV series and movies 24/7 on-demand.
Netflix has succeeded over the years to keep creating a new market space with their business model and made all their competitions irrelevant since they entered the scene in 1998, they are consistently shifting the market boundaries, this Business Strategy has really paid off big-time for the company and their revenue has consistently increased exponentially as a result of them paying close attention to consumers pain points and ever-evolving needs.
Their direct competition was Cable TV when they entered the market.
Pay per view
Quality customer service
Adult/Child protection filter
Increased library of movie selections
Removed installation complications and any future repairs problems.
Stream content on any device connected to the internet
Opportunity to watch an entire season as you wish
Create original content (movies, series, comedy shows etc..)
It doesn’t matter if you are an established business or just starting out your small business, you can still dominate your market and make your competition irrelevant once you have a clear picture of your goals and objectives, all you need to do is differentiate your product or service and provide unprecedented value to your target market. This means, focus on raising and increasing buyer value and completely eliminate and reduce things that cost so much. Hard times or not some companies are still coming out with creative ways to serve consumers, so should your business too.
If you need someone to bounce ideas on or perhaps you want Mondial Trends to help you navigate the Blue Oceans, don’t hesitate to send us an email so we can start working on growing your business together.
Perhaps, you plan on implementing these Business Strategy for your business growth? Share your thoughts with us.