Blue Ocean Thinking Style !!
I have recently read about a book on Blue Ocean strategy and later its follow up edition Blue Ocean shift. An amazing book emphasizing a new style of thinking , stresses more to be more creative way of looking into the market, expands the market boundaries, innovative style of value proportion, so that the end customer enjoys more value for a descent cost. It fits for any business , entrepreneurial startups and even would fit for an individual who has the ambition to grow based on his/her values . New style of thinking would lead to an uncontested market place and makes competition more irrelevant, that is the core thought / vision being emphasized throughout this book.
About Authors: W. Chan Kim and Renée Mauborgne are Professors of Strategy at INSEAD, one of the world’s top business schools, and co-directors of the INSEAD Blue Ocean Strategy Institute in Fontainebleau, France
Conventional market growth strategies works more on market capitalization, competitive pricing strategies, unique value proposition than its competition, all strategies locus with respect to beating the competition on existing market space / demand. Ultimate a Zero sum game. This been described as Red Ocean strategy.
Blue Ocean shift emphasize more on humanism, building up the confidence, achieving new heights through different thinking style. Generate new demand, being a disruption in the market, same time not an invasive ways intent to kill the competition. Various tools, techniques has been taught over the book to define the road map to achieve the new heights. if you decide to achieve blue ocean shift, then necessary to journey through these below 5 fundamental steps
- Start first, to have an willingness to shift to Blue ocean way of creating new demands / markets
- Next understand your current position
- Imaging where you could be
- Know the ways to achieve it
- Keep move on
Blue Ocean shift very much emphasizing on the key differentiation / value proposition that gives the customer Unproportional values for the price. Following the below ERRC techniques to achieve the UVP
- Eliminate: which factors to be eliminated which does not add much value to the business
- Reduce: which are the factors to be reduced well below the market standards
- Raise: which are the factors to be raised well above the market standards
- Create: what needs to be created that industry never offered
Blue Ocean shift also gives a guidance that all business should move to pioneer (unprecedented value ) rather than its limited values. It pushes to move on value chain and being a market leader. Company works on Pioneer can expand its portfolio of operations and explore much chance to grow rather than the limited one.
UBER: a good example how blue ocean shift makes Uber an contested market positions and makes competition irrelevant.
I would like to review the situation before Uber enters the market, whenever I want to travel, will always check the local taxis and understand the different price and book well in advance, and followup with them, whether they come on time and keep the cash ready to pay them, once the travel is done. Whereas after Uber time, whenever i want, i just open the app and start booking and I have the choice to take an individual, share, auto etc.. based on my need. I used to enjoy rewards points in terms of cash back / discount with promo codes and completely made this process an enjoyable, rather than pain. Uber app also gives me the online status of the car position and feel me secured, especially at tough times like bad rainy season, festival season etc. Uber disrupted the market, however not as an invading other business, still many are using the local taxis. Having used Uber app and i been stick to that for past several years and always makes me to feel Smart. I believe its a really blue ocean shift in taxi business.
Having seen many pros on blue ocean shift, also i never forget to mentions some its cons.
- Its not easy for all to enter the blue ocean shift, predicting new demands unless do a big homework with lot of initial investments / research
- Its relatively easy to navigate in the known market (red ocean market) rather than putting efforts to create something new with extraordinary value differentiation
- Whenever some startups / new entrant starts blue ocean shifts, already sharks in the market would easy adapt that way to capture further its market, and it becomes red ocean.
Conclusion: Overall a great book with new ways of thinking as a calm, peaceful deep blue ocean style, rather than competitive bloody red ocean style. In my opinion it also suits for an individual who is ambitious to grow in a bigger way in his/her own values, in his working environment / area, instead of beating over its competition, think of wide opportunities and keep move on till you get what you want.