The only way to beat the competition is to stop trying to beat the competition.
Instead of competing in crowded markets, companies should focus on exploring Blue Oceans – large, untapped markets, free of competition. One can discover such Blue Oceans through Value Innovation – the process of creating value for both the buyer and the company.
Value Innovation essentially means bringing a better product (faster, easier to use) for a smaller price (no unnecessary features, less costs). This contradicts conventional wisdom that quality and low prices are mutually exclusive.
- Most corporate strategies grew from military models featuring direct confrontations.
- When businesses directly compete, the battlefield becomes over-crowded so all participants suffer from reduced market share, growth and profits.
- The blue ocean strategy builds new businesses where none existed, giving innovative entries clear sailing.
- These businesses, such as cell phones and biotechnology, barely existed 30 years ago .
- Blue ocean industries are more profitable than fields with head-to-head competitors.
- Offer your customers a blue ocean “value innovation,” that is, tangible product advancements accompanied by demonstrable savings.
- Wear a life jacket: the six steps of blue ocean implementation each carry a risk.
- The six steps are:
- Use a “strategy canvas” to chart the competition and exploit their shortcomings.
- Developing a blue ocean strategy requires all hands on deck.
- “Reconstruct market boundaries;”
- “Focus on the big picture;”
- “Reach beyond existing demand;”
- “Get the strategic sequence right;”
- “Overcome key organizational hurdles” and
- “Build execution into strategy.”
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