Blue Ocean Strategy - Creating your own marketplace

What if your business could be in a class of its own? Instead of worrying about competitive forces in the market, what if you were writing your own rules and benefiting from these new potential markets?

Based on a study of 150 strategic moves spanning more than a 100 years and 30 industries, Kim & Mauborgne, authors of the book Blue Ocean Strategy, argue that companies can succeed not by battling competitors, but rather by creating ″blue oceans″ of uncontested market space.

To discover an exclusive blue ocean, Kim and Mauborgne argue that businesses and entrepreneurs should consider the "Four Actions Framework." The framework, aimed at dealing with the trade-off between differentiation and low cost, poses four key questions:

• Raise: What factors should be raised well above the industry's standard?
• Eliminate: Which factors that the industry has long competed on should be eliminated?
• Reduce: Which factors should be reduced well below the industry's standard?
• Create: Which factors should be created that the industry has never offered?

Quoting the example of Southwest Airlines from the Blue Ocean Strategy website: 

Southwest Airlines is a good example of a successful blue ocean strategy execution. According to the consulting firm Blue Ocean Strategy Partners, Southwest tapped into a customer base who preferred driving to air travel due to the lower cost. Instead of competing with other airlines, Southwest positioned itself as an alternative to cars and offered reduced prices, improved check-in times and increased flight frequency.

"This new combination created an offering that enabled the customer to benefit from the high traveling speeds of an airplane at low prices combined with the flexibility of traveling by car."

Time to discover your Blue Ocean?