A cost-cutting strategy, in turn, lowers profit margins – leaving few opportunities for search and development. , the tendency of companies in the red ocean is to deliver more and more value to their customers and knock down all their margins , “sacrificing” some profits to try to get ahead. And the Blue Ocean? Surely you have already heard that “no calm sea made an expert sailor”. This itself is the philosophy of the blue ocean. This methodology invites entrepreneurs to “set sail” from the red ocean to uncharted waters in search of competition-free markets .
In essence, this strategy consists of “simultaneously seeking differentiation and low cost to open up a new market territory and create new demand” . In short, the idea is to develop a disruptive product or service that opens a new segment and challenges the known structure of the industry. As, in the blue ocean, there are no business models or consolidated players , companies are free to innovate without the pressure of having to “beat” competitors (which, many times, do not even exist). By focusing your investments on creative solutions. They become pioneers in your market, allowing you to grow and generate profit much more easily. To better understand this idea, think about the example of Apple .
Although Products And Services
Are similar to those of other companies, France mobile number Apple pioneered personal computing by inventing the iOS devices, technology, and community. All the products were familiar enough to interest the public and unique enough to raise . The brand to its current status. In this sense, Apple is one of the most successful cases of the blue ocean, since, to this day. It remains a singular Other emblematic examples of recent years are Netflix, which reference in the area of technology. The launches of the company indicate the possibilities of the entire market and, in a certain way, the organization competes only with itself.
Offered a totally different alternative to movie rentals, and YouTube, which specialized in being an alternative for on-demand and personalized content for users. Red Ocean: Compete in the existing market; Exploit existing demand; Outperform the competition; Choosing between cost and differentiation / Blue Ocean: Creating new spaces in a market; Create a new demand; Make the competition irrelevant; Seek better cost and greater differentiation. Blue Ocean Strategy: Why adopt it? In the book The Blue Ocean Strategy, Chan Kim and Mauborgne list eight advantages of this methodology for companies.
Data-driven The Strategy
The blue ocean theory emerged from study of more than 150 strategic actions in dozens . Of industries over more than 100 years. In other words: it is not a simple “fad”, but a scientific and qualified analysis. 2. Prescribe a structured process Creating a blue ocean requires a systematic process with well-defined stages . Such as mapping the current industry landscape .Charting “escape routes” from the red ocean . And identifying the best customer conversion tactics (more on this later!). Therefore, differentiation and low cost The blue ocean frees entrepreneurs having to choose between differentiation (delivering value from products) and cost optimization.
One of the objectives of this strategy is to create the conditions for the company to foster innovation aiming at the best cost-benefit. Maximize opportunities while minimizing from risks The blue ocean strategy foresees prototyping stages . In which it is possible to evaluate the commercial viability of the ideas and refine them to the maximum before launching. For instance, a competition-free territory In the blue ocean, the focus is on pushing . Industry boundaries and expanding business possibilities, rendering the competition virtually irrelevant. 6. It is an easy strategy to apply .