Blue Ocean strategy is a framework which inspires to create a market for an innovative product or market where there is a less competition. Furthermore, the aim of adopting this strategy is to search for a business in which very few firms operate and where there is no pricing pressure.
What is Blue Ocean Strategy?
Blue ocean strategy can be applied to any industry. It is not limited to just one industry or business. In today’s corporate environment, most firms are operating and competing with each other with the motive to have a hold over the market share. When the product face pricing pressure there is always a chance that business operations could well come under threat. This situation is usually faced by the companies when the business is operating in a saturated market, also known as ‘Red Ocean’.
The main aim of this strategy is to capture new demand and to make competition irrelevant by introducing an innovative product or product with superior features. In the end, it helps the company to make huge profits; as the price of the product can charge little higher because of its unique and superior features.
Apple product iTunes is an example of Blue Ocean Strategy. Apple entered into the digital music industry in 2003 with its product iTunes. With the introduction of this product, it becomes easy for the Apple users to download original and high-quality music at a reasonable price. iTunes making an easy and convenient way of distributing music by making traditional sources of distribution of music irrelevant. Earlier CDs or compact disks were used as a traditional medium to distribute and listen to music.
With this, Apple effectively succeeded in capturing the rising demand of users for the quality music. All the products of Apple that are available in the market have iTunes for users to download music.
Canon’s personal desktop copier industry is another example of a Blue Ocean Strategy. Office purchasing managers, who required machines that are durable, fast, large, and require minimal maintenance was the target of the traditional copy machine manufacturers.
However, challenging the industry logic, Canon- a Japanese Company, created a Blue Ocean of new market space, by shifting the target consumers of the copier industry from corporate purchasers to users. With their convenient and easy-to-use desktop copiers and printers, Canon created new market space in the industry. They focused on the key competitive factors- the secretaries, the users of that copy machines.
This company turned travel into something more challenging and engaging than the typical relaxing journey of an all-inclusive beach or cruise vacation. Backroads entered the industry to offer something unique: luxury active travel. The trips they offer include guides who take travelers for hiking, biking, camping, and more. Backroads’ Blue Ocean Strategy attracted to a much different audience than travelers looking to relax. Furthermore, it has played a major role in expanding the industry to include travelers who want to feel accomplished and satisfied at the end of a trip.
Before adopting any strategic planning it is advisable to recognize the difference between a red and Blue Ocean Strategy. Once you identify what your target market needs and doesn’t currently have, look at where the competitors are doing well and where they are lacking to serve that market. Furthermore, determine how you can make a difference with your product (for example, by price point or audience). In the end, Blue Ocean challenges firms to push the boundaries of their respective industries and create something unique for the consumers.