Chan and Renée's Blue Oceans Strategy
From my first moment of contact with Chan and Renée's Blue Oceans strategy, I was impressed by the divergence of the point of view where to find spaces for innovation for business success. Any other refers to studying needs and areas of solutions in known markets, on technologies studied or through business areas normally within recurring or at least discussed spaces. But in this case, something totally different arises, a scenario unlikely to be considered, and that allows developing high performance by competing in uncongested sectors or uncontested market space, with abundant opportunities for rapid growth.
But how is this possible? How can a company reach an undisputed market space? How could you find a new group of customers that is not traditionally a customer in the industry? In principle modifying the borders of the current sector (red ocean) and exploring towards an unknown one, since commonly a blue ocean is born from a red one.
The Red Oceans
The red oceans or known markets have reached saturation points where there is no alternative but to enter a price war and accept small margins to continue living. As a result of this, and together with the few elements of innovation applied, every day the products and services are more similar, and customers choose more and more only by price.
The blue oceans strategy departs from the traditional models focused on competition in traditional markets, despite the fact that as we can see in our history they have always been present. These blue oceans, on the contrary, appear as a different invitation, novel, conceptually innovative, which proposes doing exactly what the rest does not do, and moving away from the strategy of competitive advantage, which seeks at all costs to outperform its competitors although be it in a small space in the market.
Market Leadership
Traditionally, companies that have had leadership in certain markets for a few years have lost it in subsequent years.Motorola, for example, in 1993 had 80% of the cell phone market, and in the following years Nokia appeared, snatching more than 40% of the market with a somewhat different offer, and so on until reaching the current leadership of the iPhone. That is, a tireless and relentless struggle to take a position in a certain market through improvements or evolutions in the product, or important innovations, some others could say. However, it seems to me that an indisputable and profound innovation, beyond intervening the product itself, is finding an unknown market for everyone, or at least where there is little or no competition, that is, developing blue oceans..
The Blue Oceans strategy and business success
If we are used to our companies in the same market doing almost the same thing, and we have become used to spending our efforts to be able to share these same spaces, how then do we get out of this? An alternative is to dare to look outside to try to see what others do not see, another is to rely on emerging technologies or technological changes to create spaces that do not currently exist, that is, to anticipate the needs that will surely come, or to satisfy needs that until now was not possible due to lack of technology.
For the Swiss, the watch is a masterpiece, where engineering and craftsmanship are subtly brought together to create a “jewel” that can deliver the exact time and that of course few can afford. For this reason, the Swiss were world leaders in the sale of watches until quartz appeared. At that time, the Japanese envisioned a new market, one that did not exist until that moment, one that covers the simple need to know the time and does not have money to pay for the jewel or is simply not interested, a market that allows everyone to have access to a watch at a very low price. In the same way that Ford with its Model T created the new market for mass production cars. In both cases, the good mix between need and emerging technology allows thecreation of a new blue ocean.
Technological changes and new technologies help greatly in the development of blue oceans and commonly affect new business models.
The research and study of these new elements are important tools when looking for these new spaces. On the other hand, we've already learned that most customers don't know what they want. Therefore, they will not tell us, in most cases, what I should offer them, but rather the challenge is how I manage to visualize what they are indirectly telling me they need. That can be a blue ocean, and without the analysis of its activities and practices it is impossible for us to imagine. Typically these blue oceans are expressed through weak signals from future users or customers.
In an Innovation project there are 3 types of tasks:
The former are the tasks that we have already done before, that is, tasks from the past, commonly developed in very competitive markets. The second are the tasks that others have already performed and we have not, that is, tasks that are no longer new and are therefore developed in many markets. And finally there are the tasks that no one has done, these are the important ones, especially because here are the future blue oceans. Anticipation is very important in this space, as blue oceans quickly transform into red oceans.
