Many founders and business leaders find themselves up against a bloody, competitive marketplace. Maybe your business is seeing its margins shrink, competition getting more intense, revenues stagnant or declining, or even rising costs.
How do you get out of this challenge and create an uncontested market space with continuous revenues and strategy that makes the competition irrelevant? A strategy and offering with a high-value impact and a low cost.
At the same time, the economy, markets, and buyers are constantly evolving, so you also have to have a process of continuous renewal.
Competition should not be the center of strategic thinking.
A focus on competition all too often keeps companies anchored in a competitive struggle. This focus puts the competition, not the customer, at the core of their strategy. As a result, companies’ attention gets focused on benchmarking rivals and responding to their strategic moves, rather than focusing on how to deliver a leap in value to buyers.
In W. Chan Kim and Renee Mauborgne’s book, Blue Ocean Strategy, they explain how to shift from competing to creating a new market space, making the competition irrelevant.
The aim is not to outperform competitors; it offers a quantum leap in value that makes the competition relevant. The focus is on creating value, not positioning against competitors. Just because competition is doing something does not mean it’s connected to the buyer’s value position.
The more a company focuses on the competition and strives to match their advantages, the more they look like the competition.
Industry structures can be shaped.
Most people feel that an industry’s structure is a given. Therefore if the industry structure is fixed, they have to build their business based on it. Consequently, your strategy performance becomes a zero-sum game for one company’s gain is another companies loss because there is only one marketplace.
By contrast, Blue Ocean’s market strategy shows how strategy can shape structure in an organization’s favor to create a new market space. A market space the company can own.
Unlock your creativity
Creativity is not a black box. Blue Ocean strategy allows you to develop underlying analytic frameworks, tools, and methodologies to systematically link innovation to value and reconstruct industry boundaries. And at the same time, maximize opportunity and minimize risk.
For example, tools like the strategy canvas and six paths reconstruct market boundaries to an unstructured problem in strategy and allow you to create Blue Oceans systematically.
Why is the Blue Ocean Strategy of rising importance?
Competition in existing industries is getting more fierce and pressure put on costs and profits increasing. These forces have not gone away. On the contrary, they have only intensified. Today, companies are increasingly required to reimagine their strategies to achieve more value at a lower cost.
The rising influence and use of digital megaphones
The extraordinary growth of the internet and social media has become close to ubiquitous around the globe. It has shifted the power and credibility of messages from organizations to individuals. Therefore, your offering needs to stand out as never before. That’s what gets people tweeting your praises.
A shift in future demand and growth
When people worldwide talk about growth markets of the future, Europe and Japan hardly get mentioned. Even the United States has increasingly taken a backseat in terms of future growth prospects. Instead, today China and India, and Brazil, are growing rapidly in importance.
These rising economies represent new demand and represent oceans of new potential competitors with global ambitions.
With a simple website today, any business can have a global storefront. Also, people from anywhere can raise money via crowdfunding. Services like Gmail and Skype make communication costs free or meager cost. Trust in transactions cannot be rapidly and economically achieved by using services like people and companies you know. Also, vetting suppliers across the world is relatively quick and easy.
And there are search engines, the equivalent of global business directories, that are free. As for international advertising, there’s also Twitter and YouTube, where you can market your offering at no cost.
With today’s low cost of entry, companies anywhere in the world can participate in international markets and offer their wares or services. To stand apart from these overcrowded markets, you need to be creative and have value innovations commensurate with your value.
Additional information on Blue Ocean Strategy and making your competition irrelevant.
This introduction is just the beginning of defining and exploring the Blue Ocean Strategy. ClickVisor provides the information you need to meet the challenges and opportunities that will help you build a successful business with continuously growing revenues.
