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Be truly different but be critical: the myths of Blue Oceans!

  • Posted August 18, 2018

It would be ideal to say that a blue ocean strategy is the ultimate aim that an entrepreneur can ever dream to bring a truly differentiated and hihgly innovative product to a totally new market, which can result in a market revolution. Scholars argue that a blue ocean should consider many critical factors to be successful in the market or otherwise it will become a complete failure and disrupt the flow of other business lines of a business group when the blue-ocean is utilized as a diversification option.

Many tend to confuse red oceans with blue oceans. Just because Blue Ocean is considered to be highly innovative, it doesn’t mean that red ocean cannot be innovative. Red ocean businesses can differentiate themselves from the existing competitors and still create a revolutionary demand by providing excessive value not only to the customers but also to all stakeholders.

Blue Ocean Strategy is a systematic approach that helps you to open your eyes to where valuable, commercial innovation typically comes from and guides you through the process of designing your own way of commercializing it. That’s not just strategic or niche marketing, although it is encompassed.

A common myth behind blue ocean is that most strategists see it as a highly customer centric strategy, which is true to some extent. However, a blue ocean should be highly critical when implemented and should consider critical factors such as the competitors, market condition, entry and exit options, and macro environmental issues that fall under PESTEL (Political, Environmental, Social, Technological, Ecological, and Legal).

Wait…I know you start wondering how come competitors become an option when it comes to a blue ocean. Yes. We should be clever enough to see the competition behind the blue oceans. There is nothing REALLY new! Everything is connected. It is true that we say a blue ocean creates a new demand in a new market. But the fact is, we go to create something that no one ever thought before. We create a complete new product from something that is already existing. We eradicate the existing patterns to bring something that is totally different. Still, there is something that is already there.

Let’s put it this way into the analysis. Citing to an article in blueoceanstrategy.com (2018) Cirque du Soleil took the world by storm. It created a blue ocean of new market space. Its blue ocean strategic move challenged the conventions of the circus industry. Cirque’s productions have been seen by more than 150 million spectators in more than 300 cities around the world. In less than twenty years since its creation, Cirque du Soleil achieved a level of revenues that took Ringling Bros. and Barnum & Bailey—the once global champion of the circus industry—more than one hundred years to attain.

What makes this rapid growth more remarkable is that it was not achieved in a declining industry. Supplier power on the part of star performers was strong. So was buyer power. Alternative forms of entertainment —ranging from various kinds of urban live entertainment to sporting events to home entertainment—cast an increasingly long shadow. Children cried out for video games rather than a visit to the travelling circus. Partially as a result, the industry was suffering from steadily decreasing audiences and, in turn, declining revenue and profits. There was also increasing sentiment against the use of animals in circuses by animal rights groups. Ringling Bros. and Barnum & Bailey set the standard, and competing smaller circuses essentially followed with scaled-down versions. From the perspective of competition-based strategy, the circus industry appeared unattractive.

Tata Nano was said to be a highly customer centric product, while the fact is that Tata eliminated various unwanted factors, integrated in cars that were considered to be too expensive for an average Indian at the time of launch of Nano. Despite its struggles in the latter part in the Indian market and negative media focus after a Nano got caught in fire; the concept was still considered to be highly successful. Strategists believed that other car manufacturers failed to look into an imperative market, which is the ‘middle-class segments’ of the country. It is where Tata made a clever move to meet the requirements of the major population of the country by offering them a cheap car (it just costed 100,000 INR at the time of launch). The cheap car was marketed successfully in the market among the segments that were only affordable to buy motor-bikes. The concept was super popular in the early days and even western countries were impressed with the concept of Tata Nano, which made the Nano not only a blue ocean but also a Reverse Innovation.

Want to read more about Tata and Blue Oceans? 

We provide a Research Report that explains how Tata Nano became a Blue Ocean and we take the cases of Tata Steel, Tata Nano, and GE through the lens of Reverse Innovation.

Click the below Buy Now button to purchase our Research Report with interesting findings for $ 10. 

If you have any queries with regard to purchase, please email us via admin@norosolutions.com. 

To conclude, a blue ocean can be highly customer eccentric but it also takes high note of other critical factors. Any business or concept will go wrong if the people behind lack strategy that fails to meet the critical factors/requirements.

Mathangie Selvarajah is the founder of NORO Solutions. She is an entrepreneur, blogger, and writer. NORO provides Research based Business Consultancy. NORO specializes in Market Research, Marketing Research, Product Studies, Marketing and Lead Generation Strategy. Contact: mathangie@norosolutions.com.

 

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