How can you create new markets using the blue ocean strategy?

1 What is the blue ocean strategy?

The blue ocean strategy is a concept developed by W. Chan Kim and Renee Mauborgne, based on their study of more than 150 successful companies across different industries and regions. They found that these companies were able to create new markets by offering something different and valuable to their customers, rather than competing in existing markets with similar products and services. They called these new markets blue oceans, as opposed to the red oceans of bloody competition.

2 How does the blue ocean strategy work?

The blue ocean strategy works by applying four principles: eliminate, reduce, raise, and create. These principles help you identify and eliminate the factors that make your industry competitive and costly, reduce the factors that are not essential or valued by your customers, raise the factors that are important and appreciated by your customers, and create new factors that differentiate your offering and create demand. By doing this, you can create a value proposition that is both low-cost and high-value, and that appeals to both existing and potential customers.

3 How can you apply the blue ocean strategy?

To apply the blue ocean strategy, you need to use a tool called the strategy canvas, which is a visual representation of your current market position and your desired blue ocean position. The strategy canvas has two axes: the horizontal axis shows the key factors that influence your customers' decisions, and the vertical axis shows the level of offering that you and your competitors provide on each factor. To create your blue ocean, you need to draw a new curve that diverges from the existing curves and shows how you can eliminate, reduce, raise, and create value on each factor.

4 What are the benefits of the blue ocean strategy?

The benefits of the blue ocean strategy are manifold. By creating a blue ocean, you can achieve higher growth, profitability, and sustainability, as you tap into new and untapped markets, create loyal and satisfied customers, and reduce your costs and risks. You can also gain a competitive advantage that is hard to imitate, as you create a unique and distinctive brand identity and reputation. Moreover, you can foster a culture of innovation and creativity in your organization, as you challenge the status quo and explore new possibilities.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?