Ah, summertime. Straight in. That’s how it starts. Walking right into the ocean from the beach, I’m compelled to jump in fully clothed and like a dolphin with reckless abandon, the temperature of the water stinging me as I do, it just happens. Surrounded by the ocean’s salty goodness, my mind convinces me that all the toxins are being cleansed out of my body and the world is indeed my oyster. We know that water is the basis of all life and to go one step further, scientist and marine biologist Dr. Wallace Nichols confirms in his book “Blue Mind” that instinctively being near, in, on, or under water makes us happier, healthier, more connected and better at business. Better at business? No wonder yacht owners and divers alike enjoy being in and out on the ocean surrounded by nothing but water, occasional views of the coastline, playful dolphins in the waves, and sunsets that fall like coins into the water.
My time in the ocean is limited. I have a very important business meeting within the hour and against good judgment, my decision to just head “straight in” elevates the risk of being late. While small silver fish begin to surround my legs, I wonder if the exhilaration of what I just experienced could affect strategic thinking in business? Metaphorically, INSEAD business school professors W. Chan Kim and Renee Mauborgne introduced the Blue Ocean Strategy a decade ago to help companies focus on creating their marketplace rather than engaging in traditional competitor business models. Their theory is that leading companies will succeed not by focusing on their competitors, but by systematically creating “blue oceans” of uncontested markets, which would make the competition irrelevant. According to Mr. Kim, blue ocean opportunities are everywhere, irrespective of whether an existing market is attractive or not. Looking out over the ocean then, I feel as though he is spot on.
An example of a company implementing blue ocean strategy is (you guessed it) Apple. By creating iPod, iTunes, iPhone, and iPad, Apple not only obtained sustained profitable growth, but it also revitalized and reinvigorated the declining consumer electronics industry. Apple achieved its success not by investing in what was hot in the marketplace, but by making strategic moves to lead and shape the evolution of an industry that was not thriving. One caveat that Mr. Kim points out is that eventually, any strategy is capable of being imitated and a blue ocean may also turn red, with fierce competition. For example, the market you create may end up booming and imitators will jump in to offer cheaper, more basic solutions. Creating blue oceans then is a dynamic and continuous process. Businesses need to respond to the changing environment, much like we do to changes in the ocean environment caused by wind and currents.
To help you navigate the currents, here are some of the barriers to blue ocean strategic thinking:
- Making existing customers happier While making sure your existing customers are satisfied, pay attention to non-customers. They hold the greatest insight into points of pain and why they are not buying your service or product.
- Marketing strategies focused on a niche Instead of marketing only to your niche, try to determine what common interests and desires exist across various markets that could generate broader demand.
- Confusing technology innovation with market-creating strategies Technological innovation does not always equal market expansion. Instead, companies need to ask how its product makes buyers’ lives more productive, less risky, simpler, more convenient, more fun or environmentally friendly.
- Equating market-creating strategies with differentiation “What is your market differentiator?” When creating new markets, the trick is to gain differentiation and low cost simultaneously.
So next time you find yourself near or in water, think of all the blue ocean opportunities ahead of you.