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Without going into heavy details as that would require me to write an entire book. Blue Ocean Strategy is to basically introduce a product or service that has not been introduced before - i.e. you are the first market player so you have a huge advantage with no competition and even when the competition starts down the road you will not only be a market leader you will have better strategic advantage to set rules and steer the business in a specific direction through a specific pipeline. This model whilst very lucrative is not easy enough to come with as it requires you to introduce something that has not been done before, some companies in the past came out with a product and then used heavy marketing, social and psychological strategies in order to create a demand from the people when previously they would not have wanted to opt for such a product or service.
Blue Ocean Strategy is based on the idea that every company can achieve higher profit by creating new demand in a non-competitive market(blue ocean). The profit is much easier since there is no competition. You can use it by creating value innovation, ie. creating a new and differentiated product in an untapped market.
Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand.
In blue oceans, competition is irrelevant because the rules of the game are waiting to be set.
Whats defined in the strategy has evolved for generations, no academics in marketing or business management had highlighted the concept in such detail and published a book kudos to the authors for the extensive reaserch and publishing a book.
Can I use the blue Ocean Strategy in Marketing? My Answer: I doubt you should use the strategy in all products, all markets and marketing environments.
In short the strategy defines "simultaneous pursuit of high product differentiataion and low cost, thereby making competition irrelavant" authors of book explains the strategy may be needed when a supply exceeds demand in a mass market environment..
As an entrepuneuer and marketer, I like the concept but have to disagree with the application proposed by the author. Certain that the strategy may work on some products, have my doubts it would work on a majority especially in the mass market, besides it may kill a brand if no proper analysis gone in to the concept implementation.
When a product in a mass market it already is in competition, starting from produt presentation to the product content, to postioning to physical evidence. To come thus far and achieve a product's existing market share already an herculean task by the management.
I doubt a product could be so vastly highlighted from competition through value addition, communication or presentations or positioning, that too in a mass market. Even if you find your product unique in its content you need to be sure that product would not get pushed into niche segment, if this happens even if you have an increase in a product's gross margin you would lose on the bigger picture as the reach in a niche market would be limited reflecting negative on overall sales volume value.
Lets say there is a significant differntiation in the product, be it in positioning or product content, lowering the costs from competitors average price is a make or break decision, in a supermarket when you see a shelf barker with a discount in a fast moving gondola shelf, we usually look at the produts expiry date, a known fact of price offs in FMCG products are when expiry dates get closer you see2 for the price of1 etc and various price off promos. Such a decision would be a finance departments nightmare, if the change does not make any difference in production and distribution expenses objective remains to penetrate the market, a negative impact on impementation decision can have serious implications towards the bottonline in profit and loss statement.
Strategy may work in an economy where the product would remain in a products actual stage with no provision to reach to the augmented stage (products3 levels of stages), a country with a high cost of living and low economic growth may adapt to income level of its consumers, differentiation in products can come in such as moving fromgm packs togm packs,gm packet to agm sachet along with a low price than of competitors, in a situation such as this for sure seems viable for such a concept.
Would have prefered if the authors of book emphasised importance on creating a new need, an unchartered, competition free, a product with unique attributes, in other words finding a new need in a market, for example facebook was such a product, hybrid automobile technology, nano technology, android these are new concepts created within the last decade.
My advise to students and future marketers, risks associated in implementing Blue Ocean strategy as proposed in the definition is comparatively high, even for a seasoned marketer, but the book has touched many interesting aspects in the marketing arena spanning over years of business world. Read for your knowledge apply where it matters if you are confident in applying the strategy in a mass market use it, if successful good, otherwise be prepared to face the tune..
Cheers..
Iftikar Zaruk
FMCG, Dark Market, Retail, Management, Marketing & Advertising Professional
Note: Had to skip the Red Ocean Strategy (mentioned in same book) such unethical practices may have existed when sales people were taught to sell a fridge to the Eskimos, in the present business environment such practices has a very short shelf life..
Blue Ocean Strategy is based on the idea that every enterprise can achieve higher profit by creating new demand in non-competitive market (so called blue ocean).
Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.
This is basically a new marketing concept, which focuses on exploring new market opportunities. Part of the team, which participates in the Blue Ocean Strategy, should be members of the top management who are responsible for the product or overall strategy of the organisation, mainly CEO and CSO.
Blue Ocean Strategy is Value Innovation which creates consumer value by decreasing costs to acheive higher profit to every enterprise
Taking advantage of a new, unique & uprising need or demand to create a marketing strategy aiming for extracting the maximum market share & conversion raito gaining highest sales portion.
