It may seem that all the existing industries in the market are well-researched and limited. Lots of companies struggle for their share, whereas the competition is fierce.
One of the solutions for leaving this loop is to migrate to a "blue ocean." This term refers to a previously undiscovered (or poorly covered) market with low competition or obstacles. You’ll need a comprehensive blue ocean strategy to succeed with this approach.
Here in Arounda, a leading Ukrainian Product Design Agency, we offer top-notch expertise for startups and companies from the Fortune 500 list. We aim to build magnificent products that hit the markets with a long-lasting wow effect.
In this article, we’ve summed up our five-year experience in product design and development. Read further about the blue ocean strategy examples and practices to implement in your business
What is the Blue Ocean?
This concept originated in 2006 from the Blue Ocean Strategy book by W. Chan Kim and Renée Mauborgne. According to the authors, the blue ocean symbolizes a market without competitors, whereas the red ocean is overcrowded and limited. Think of competitors as sharks. That’s why the red ocean is red—it’s full of blood because of the intense competition.
It’s all about a zero-sum game in the red ocean. The gain of one company means the loss of another. In the red ocean, companies sell comparable goods and commonly compete with pricing. On the contrary, blue ocean enterprises generate extra demand.
Moreover, other advantages of blue ocean strategy include:
- Blue oceans provide users with a new, previously unrealized value
- Blue oceans imply little or no competition
- Blue oceans allow enterpreneurs to become a pioneer in a new market or field.
If you pursue the blue ocean, the question is not to eliminate all competitors but to carve out a new market niche with no competitors.
Tips On Applying the Blue Ocean Strategy
The nuclear execution principle in blue ocean strategy focuses on applying the iconic Eliminate-Reduce-Raise-Create (ERRC) framework.
The ERRC framework helps companies keep in focus two sides of a new blue ocean: eliminating and reducing and raising and creating.
Read further some tips and tricks for robust blue ocean strategy development.
Analyze Industries
To find a new trend or demand, you should first do a thorough examination of the market. Analyze the product and the pains of the customers. Check if clients are happy with the existing services.
Define a Problem
Instead of fighting for the existing options, aim to solve other customer problems. As soon as you discover something that isn't as wonderful as it could be, consider how to ease this consumer's pains with your offer. Think about not what your rivals have done wrong but how you can make your customers' lives easier.
Follow the ERRC framework
The main work is to develop a plan comprising four main concepts. Answering these questions will be the basis for the action plan.
- Eliminate. Which factors that the industry has long completed should be eliminated?
- Raise. Which aspects ought to be elevated significantly over the norms for the sector?
- Reduce. Which factors should be mitigated well below the industry's standard?
- Create. Which factors should be created that the industry has never offered?
Implement
Once you have a blue ocean strategy summary, It's time to implement it. Kim and Mauborgne advise the following steps:
- Establish a launch date for your new products, and hire personnel to develop your team and brand identity.
- Identify the strengths and shortcomings of your current team and work to strengthen them.
- Determine any potential pain areas for your existing and potential new clients.
- Create goods and services that address these problems in ways that no other company has ever thought of.
- Make a formal shift plan in writing and test your new goods and services (as well as the steps you'll need to get there).
You are ready to enter a new market when you've covered the scheme above. Nevertheless, a blue ocean strategy is not a holy grail but will lead to success in skilled hands.
10 Examples of Blue Ocean Strategy
Even considering that every company is unique, there is always something in common with why they succeed. We described these renowned brands' blue ocean strategy business examples to show the advantages and disadvantages of blue ocean strategy offer.
Cirque du Soleil
Unquestionably, Cirque du Soleil is one of the most well-known cases of the blue ocean strategy. Cirque du Soleil revolutionized the circus industry by aiming at low cost and differentiation. Since the early 1980s, the firm has provided entertainment for 155 million people in more than 300 locations.
Concentrating on human physical prowess, live music, and a theatrically inspired plot allowed Cirque du Soleil to produce new elements that had never been seen in the circus world.
Marvel
Marvel began as a typical comic book publisher in 1939, focusing primarily on young readers. Then, as its focus shifted to college students, Marvel began to develop more complex characters. Superheroes came second to being people. Marvel generated a new value and used the blue ocean strategy advantages at full throttle.
By introducing the Multiverse, Marvel dived into a clear ocean, as diverse characters were connected and brought together in various movies. As a result, Marvel became the comic book company number one in the US.
Nintendo's Switch
In the early 2010s, a computer games giant, Nintendo, faced fierce competition. The industry giants like Sony and Microsoft occupied the market. Nintendo realized the importance of blue ocean strategy, as it succeeded with it earlier with their hit, Wii. That is why they again turned to the blue ocean and launched the Switch, one of the world's fastest-selling game consoles.
The Switch is a hybrid video game console consisting of a tablet that can be docked as a home console or a portable device. It contains wireless controllers that can be attached to either side of the console and held in hand like the Wii Remote. Therefore, both kids and their parents adored the Switch.
By expanding into adjacent sectors and collaborating with companies, Nintendo entered history.
Stitch Fix
A personal styling business called Stitch Fix gives its clients boxes of chic, hand-picked apparel. Each customer has a personal stylist. With more than 3 million clients, Stitch Fix made $1.5 billion in revenue in 2019 with the help of a blue ocean strategy.
Stitch Fix created a unique and affordable service that women have been going crazy for. Katrina Lake managed to establish this new market by combining technological innovation with human intellect and creativity.
HealthMedia
HealthMedia, a participant in the market with US$6 million in revenue, was perishing in a sea of fierce competition.
Later, HealthMedia discovered that customers switched to telephone counseling for one key criterion—high efficacy. To achieve that, HealthMedia implemented interactive online questionnaires, digitally matching people's s challenges with their health plans. They created the notion of "digital health coaching."
Compte-Nickel
Fintech in France, Compte-Nickel discovered a blue ocean in the saturated French retail banking business by identifying noncustomers and creating a blue ocean strategy to get them.
Standard banking procedures required making an appointment and excessive paperwork. Maintaining an account connected to numerous, primarily unrelated financial services is expensive.
While conventional banks concentrated on making their offerings more appealing. Compte-Nickel reached for low-income earners and other groups left out by traditional banks.
Yellow Tail
Yellow Tail became the fastest-growing wine brand in US history three years after entering the market.
They dropped the usual emphasis on prominent vineyards and maturing. Instead, they relaxed the wording typically featured on wine bottles, which might be frightening to potential customers.
In the end, Yellow Tail developed a beverage that was sweet enough to appeal to the general public. They increased demand among beer and spirit consumers as well as wine connoisseurs, becoming one of the most successful blue ocean strategy business examples.
Uber
Uber denied competing with taxi companies and developed an app that instantly connects customers and drivers.
At that time, there was already a sizable demand for upmarket on-demand transportation. Luxury automobile services dominated that market, but no app existed for them. Uber took advantage of an existing market, creating their blue ocean strategy. They strategically valued differentiation over affordability, maintaining the current value-cost trade-off.
iTunes
In 2003, Apple uncovered a vast, blue ocean market for digital music providing free, convenient, and legal song downloads in iTunes.
Furthermore, it allowed users to purchase individual songs for affordable prices. Previously, they had to buy a whole CD if they wanted only one or two pieces. Now iTunes has 99 million subscribers worldwide, having implemented the best of a blue ocean strategy.
Meta
Facebook's CEO, Mark Zuckerberg, presented Meta at Connect 2021. The concept promised to unify apps and technologies under a new company identity. A clear Blue Ocean Shift has occurred.
According to Facebook, the Metaverse will seem like a combination of today's online social encounters projected into the real world. It will allow immersive experiences with others and carry out activities impossible in the real world.
Conclusion
The blue ocean strategy proved to be a winning option. It broke the boundaries and showed the crucial shift in the minds of business owners. They start to focus on producing instead of competing.
Blue ocean strategy examples show that the previous outlook of marketing as competition is obsolete. To succeed, one must open new possibilities and markets, creating an experience that has never existed.
This is the proper time to exit the games in the red ocean and enter the blue one. To do this, rely on Arounda's multidisciplinary digital product experts.
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