The consequences that globalization has brought about triggers the strong competitiveness that most organizations experience today. However, as a result of this phenomenon, actions have emerged that benefit not only companies but also society, since they are forced to search for new alternatives where innovative products emerge, enterprising people wanting to get ahead and break paradigms that many times permeate society. This exhaustive search has involved the failures of many companies, the experimentation of some pilot tests, the thought of improvement where a world of promotion for organizations is assimilated.
This is how different strategies arise in this way that guide the desire to make a difference, to do something new, something for which it has not yet been discovered but which is immersed in space, waiting for it to be discovered to be launched on the market and impact others. However, some of these strategies are usually aggressive, for which they go directly to the dispossession of the competition in the face of the high position of their own organization and it is here when a new model is born that breaks the scheme of doing the everyday, venturing into total uncertainty and impose the unusual on people, causing it to arouse that interest and become something of necessity for them.
It is nothing more and nothing less than the Ocean Blue strategy, a model that breaks into all the aspects that constitute the methods that are usually used to create a business. The scheme he manages is to create your own market without looking at what other companies do. This is where the purpose of this article arises, to be able to share with the reader a different vision of strategy, to make them aware of the new alternatives that are being implemented and that have made many companies achieve success.
The birth of a new strategy
The emergence that led to the creation of a new strategy was found in the desire to carry out in a systematic and practical way a thought that would stop navigating under already conquered waters and head towards the course of unknown seas for which no one has stepped on, developing new ideas and breaking schemes before the target market. This is how W. Chan Kim and Renée Mauborgne make a difference and implement the development of a new strategy: The Blue Ocean Strategy.
As the authors indicate (Giraldo Mejía & Leal Jiménez, 2011), this new method was not created overnight, but was “based on the study of 150 strategic actions developed over 100 years in about thirty industries, where the authors propose a new, highly innovative vision in relation to business strategy ”. And since part of that factor as the innovative vision, it is considered a terminology to be able to be described and to understand what this strategy wants to achieve. Now, strategy, a word with high expectations and at the same time with different perspectives.
Although it is important to define what refers to the term of innovation, the situation of landing the word strategy as a point of reference in this broad and interesting subject is noticed. As a first point, it is important to mention the basic concepts that are identified in the blue ocean strategy to finally clarify this topic so that the reader becomes familiar with the concepts that will be exposed throughout this article, which generates a scene of new directions.
Base concepts
The Ocean Blue strategy acquires terms that are necessary to describe in order to obtain main ideas and based on that clearly capture the definition of blue ocean, where the following concepts will be described:
First concept. - Strategy
Based on the book The Basic Marketing Strategy (Publishing, 1989), he mentions that the word strategy “comes from the Greek strategists, whose meaning was general and in Greece the word strategy was used to designate what can be called the art of generals ”. How can this word be analyzed comes from what was used in war battles, and that is how it is adopted today, which, as indicated in this book, brings with it different implications:
- Resource and action planning process. Plan broken down into precise and concrete actions in the practical field. Search for interests and opposites in a conflictive area. Establishing a purpose: to win. Use of varied resources: physical, human, intellectual, etc.
Thus, the establishment of five basic factors in the performance of a strategy: resources, actions, people, controls and results.
Second concept. - Innovation
According to what the author (Bueno, 2008) mentions in her book The innovative and technological process: strategies and public support, “one of the first researchers who introduced the term innovation in technological and non-technological issues in the economic field was Schumpeter (1934, 1942). This author defines innovation as:
Another definition that this author shares with us is that established by the European Commission's Green Book on Innovation (1995), which indicates that:
Therefore, starting from these definitions, the explanation of them ends up being reasoned, where the word innovation contains various aspects where the creation of something new, different from the rest, interacts, which has a purpose that is to solve a problem and that contributes to people, to society.
Third concept. - Competition
The term competition usually obtains two different points in terms of its meaning, on the one hand, it is usually attributed to a competence such as the capacities and abilities that people develop, on the other, it usually refers to competition in the market issue, where there are two or more organizations that contain the same demand regarding their line of business. Within this theme, the second will be discussed, so its clear definition will be exposed in a more specific way.
The authors (Kotler & Keller, 2009) define the competition as:
It is with this last sentence that they make it clear to us that not only must the competition be of the same line of business, but that it can satisfy the same need for any market.
Blue Ocean VS Red Ocean
Now, once you are familiar with the above concepts, you start from them to establish a broad and specific concept of what the Ocean blue strategy consists of (in the English language). As mentioned, the authors W. Chan Kim and Renée Mauborgne were the creators of this strategy. The premise of creating a strategy that is based on making a difference to others starts with a change mentality. Most companies are born with an idea of creation that is aimed at already known markets, for which the information is usually based on existing organizations that are taken as a basis and it is about being up to them, dividing the demand and why not? To become the leading company before others.
Most will think about how bad it has power to do the above, the answer is none, everyone has the right to start a business and go out with the goal of being able to achieve success. It is here when in the search and endless studies and research carried out by these two figures, they realized that, when starting a new business, the majority were based on something where people were already familiar, call it product, service, methodology, the business world was increasingly competitive.
In turn, they realized that it is very difficult for people to risk inferring in unknown fields, since what is unusually consulted does not allow them to "open" the future panorama. This is how two new terms emerge in the business world: Red Ocean and Blue Ocean. By which an extreme gulf is created for both concepts. However, what is the difference between these two concepts? Very simple, based on the book The Blue Ocean Strategy: How to develop a new market where competition does not matter (Kim & Mauborgne, 2005):
Blue Ocean is understood to be all those companies created with unknown market areas, which involve innovative tangible and intangible assets, as well as methodologies and tools not yet proposed for people who generate income from the organization itself. This is based on introducing to the market something that has not yet been covered by any other company, an important and characteristic point that encourages the creation of something new by increasing the value of the product (this refers to something tangible or intangible), so it does to a sustainable and profitable company over time.
Directed to the other extreme, the Red Ocean refers to all those companies that already exist and where the competition is just around the corner for all the others. Another characteristic of this Ocean is that the products are really identical in terms of functions and needs for people, causing all organizations to want to "improve" a product that has already been invaded by others. What causes extreme rivalry between each and every one of them, leaning towards consulting strategies that make them even more create that environment of competition.
The blue Ocean Strategy
As indicated (Kim & Mauborgne, 2005), the blue oceans are marked by “untapped” markets that, unlike the red ones, “the rules of the game are already known”. Part of these two visualizations is true, however, the thought of a blue ocean strategy is based on that of the red oceans, since, developing in an environment already known, with recurring markets and abundant competition, the vision of heading towards The blue ocean is not competing with other companies, stripping and creating a cycle of rivalry by “staining the water of the red ocean with blood”.
Derived from the previous context, the author (Chirinos, 2011), interprets the strategy of the blue ocean as “leading companies to generate a new market space making competition irrelevant, creating and capturing new demand, aligning all the activities of the organization with the aim of trying to reduce costs and at the same time increase the value of the products ”. As mentioned regarding the word strategy, which emphasized that it was coined in military terms, it is often similar to the competition and rivalry that they can provoke in the red oceans.
However, as this author has already indicated, this strategy is not about fighting with what is already done by other companies, it is about the fact that every industry evolves, constantly changes, is not fixed in its ideas and creates a new market, a blue ocean in which ideas are often revolutionized without the need to hit others in order to reach a position that is believed to be high for a certain time but that all life must be defended "tooth and nail" taking care that someone else arrive with another competitive strategy and achieve the stripping of what apparently already had.
The authors Kim and Mauborgne, among their investigations, were dedicated in the same way to find out the impact that the blue oceans had against the red ones and discovered that of the total market (based on the establishment of a sample that represented an entire population of organizations) 86% were red oceans and therefore 14% were blue oceans. However, that 86% managed to generate 62% of the income with a profit of 39%, on the other hand the blue oceans obtained 38% of the income achieving profits of 61%.
This is how the "magic" question comes… Did you notice the difference between these two oceans? The numbers speak and interpret that the benefits obtained by the blue oceans are really perceived, although on the other hand it is said that they did not obtain the success rate to the initiatives between both oceans, the performance was remarkable. A good area of opportunity would be a good area of opportunity to initiate new research on that rate of initiative as it could find the root cause that really drives blue oceans and achieve its great success in new markets.
The momentum of a new strategy
After the investigations that (Kim & Mauborgne, 2005) carried out, they dedicated themselves to creating tools that would enhance the implementation of the blue ocean strategy. Imposing a motivating attitude on entrepreneurs is important, however, with this they will not achieve the implementation of this strategy. What these authors indicate is to establish as a first point a strategic framework, where a scheme that builds the basis of a strategy can be diagnosed. The purposes of this chart are twofold: Capture the current pattern of competition in the market and the level of what is being offered to buyers.
This is in order to build “value elements” towards the customer within the construction of a new value curve. Based on this, four fundamental questions are created that strengthen these elements called "The scheme of the four actions" reducing to the determination set out below:
- Elimination of variables that the industry takes for granted Reduction of variables under the industry standard Increase of variables found above the industry Creation of variables that the industry has never offered.
As these variables are reduced and eliminated is where ideas are obtained to be able to obtain the reduction of costs compared to the competition. In turn, to complement this tool of the scheme of the four actions, the matrix emerges
"Eliminate-reduce-increase-create" where the aim is to stimulate companies to act with respect to the questions asked in the previous scheme. As the authors indicate (Kim & Mauborgne, 2005), if these tools are complemented, the following benefits are obtained:
- A search for differentiation and low cost is implemented. Early identification of the orientation they are following towards growth and creation is obtained. Managers of any level can understand it. An exhaustive examination of the variables against which they compete is carried out..
Principles of the Blue Ocean Strategy
The purpose of being able to implement the blue ocean strategy is to induce any organization to go out and explore new frontiers that allow them to leave that area in which they are immersed in the waters of the red oceans and thus be able to separate themselves from the competition. This being the case, the authors (Kim & Mauborgne, 2005) defined six basic approaches grouping them under the scheme of “the six ways” by which they are established as the principles that govern the blue strategy, which will be described below.
First Way. - Explore alternative industries
Previously it had been established within the context of competition, that it was not necessary to have the same turn to consider it as “the rival” that is fighting like you against obtaining the market demand. During the implementation of this principle, it must be taken into account that the vision must be broken and not focused on only those types of competences but on other "alternatives" as the title of this first route indicates well. For example, it is necessary to focus on companies whose purpose is the same objective, to satisfy a certain field of need such as a casino and a restaurant, both have the same objective: customer distraction and generate an alternative in which people turn to them as an ideal place to spend your time.
Second Way. - Explore strategic groups within each sector
A strategic group is understood to be the entire set of companies that are carrying out a similar strategy within the same field. As these authors well indicate, strategic groups can be identified classified in two dimensions: performance and price. The "key" for these companies to develop within these strategic groups is to understand the factors why customers decide to move from one group to another.
Third Way. - Explore the chain of buyers
While it is true, many of the products that are generated are not precisely directed from the factory to the end customer. The product can go through several distribution points in which each one has different expectations and demands such as delivery time, quality, form or treatment. This is where the needs of each intermediary must be thoroughly studied in order to make a correct delivery where they feel satisfied.
Fourth Way. - Explore complementary offers of products and services
Although most entrepreneurs are given the task of looking for something that meets the needs of consumers, many are inclined towards ideas perhaps of something new and that has not been given to light. However, they can be protected under complementary products and services, that is, a solution is sought to the problems that people present when purchasing a product or requiring a service.
Fifth Way. - Explore functional or emotional appeal to buyers
The functionality that a product expresses when shown to the market is very important, however, many companies come to emotionally touch consumers to be called to buy it, since it does not initially create a basic need and must resort to before another concept.
Sixth Way. - Explore the dimension of time
Every company must evolve and change over time. It is vitally important to correctly manage the trends that are presented.
Conclusions
The importance of establishing a strategy to achieve success is very important, however, the blue ocean strategy came to revolutionize and break paradigms that are adherent to many organizations. The blue ocean thought allows reconstructing ideas and encompassing a new market where costs are decreased, revenues are maximized and profits are raised to the top, generating a truly profitable company and being able to satisfy the needs of customers who are sown a vision. and modern perspective.
What is interesting and of great value that this strategy obtains is that it does not generate struggle and rivalry with other companies, it totally eliminates competition and dares to explore new frontiers, leaving behind the world of red oceans that impede the growing development of an organization and that an improvement has to be pursued. This does not mean that within the environment of the blue oceans constant innovation will not be maintained, but that we must specialize and take care of each day to generate innovative proposals that make a difference to other companies.
Thanks
To Doctor Fernando Aguirre y Hernández, professor of the subject Fundamentals of Administrative Engineering, who promotes the development of this article by providing technical knowledge and support for its preparation. To the Technological Institute of Orizaba who trains students of excellence and gives opportunities for professional improvement in different engineering areas. To the National Council of Science and Technology (Conacyt), which provides financial support for postgraduate studies promoting scientific development.
Thesis Proposal: Exploration of new complementary alternatives that establish the creation within the field of blue oceans.
Objective: To develop a series of studies that allows establishing a complementary alternative directed towards a new market.
References
Well, MJS (2008). The innovative and technological process: strategies and public support. Netbiblo.
Chirinos, C. (2011). Market niche: The blue ocean approach. Industrial Engineering, (29), 171–179.
Giraldo Mejía, IC, & Leal Jiménez, JE (2011). Strategic model of the blue ocean applied to the commercial area of Davivienda (BS thesis). University of Medellin. Recovered from
Kim, WC, & Mauborgne, R. (2005). The blue ocean strategy: how to develop a new market where competition does not matter. Editorial Norma.
Kotler, P., & Keller, KL (2009). MARKETING DIRECTION. Pearson Education.
Publishing, M. (1989). The basic marketing strategy. Díaz de Santos editions.
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