What’s in it for me? Conquer uncontested market space.
Every business asks themselves the same question: how can we beat out the competition?
And almost every business comes up with the same answer: we need to become bigger, better, and faster to outperform our rivals.
But what if your business didn’t have to beat the competition because there wasn’t any?
What if you could enjoy unlimited growth without worrying about limited demand?
This isn’t some idle fantasy but a strategic approach that a handful of successful businesses have already made reality.
How did they do it?
And how can your business do the same?
This short Blink will give you a taste.
Escape your competition by setting sail to a blue ocean.
When you establish a new business, competition can be brutal.
Whether you’re selling wine, audio books, or life insurance, the market for a product can only get so big.
So you’re left to fight with hundreds of other companies for your share of a limited demand.
No surprise that America’s most popular business TV show is called Shark Tank!
Markets today are like oceans, swarming with hungry companies ready to kill each other.
There’s so much blood in the water, we can call these markets red oceans.
But every once in a while, a company emerges that seems to sail past all the competition.
These are businesses that rise fast, grow uncontested, and seem to play by their own rules.
What are they doing differently?
Well, instead of fighting over scraps in red oceans, these businesses navigate uncharted territory: blue oceans.
You can think of blue oceans as all the markets we haven’t yet discovered, for products and services that don’t yet exist.
Demand isn’t limited because demand isn’t there – it has to be created.
But this isn’t a handicap, it’s an opportunity.
Because if the size of your market isn’t limited, neither are your growth and profits.
In blue oceans, the water isn’t bloodied by cut-throat competition.
It’s deep, clear, and full of undiscovered potential.
The blue ocean strategy gives you the methodology and tools to conquer such uncontested markets.
The basic tenet is this: It’s true that the space in a certain industry might be limited.
But who’s to say that a business can’t create an entirely new industry?
Let’s look at an example of this in action: famous Canadian circus company Cirque du Soleil.
With its extraordinary variety shows, Cirque du Soleil has entertained millions of people worldwide.
On top of that, it’s made record profits.
Not something you would expect from a circus company!
How did the company do it?
Well, Cirque du Soleil did two interesting things.
First, it got rid of the old circus staple of animal acts.
Then, it supplemented its human acts with live music and compelling storylines.
The first move reduced costs while the second introduced exciting new elements into the world of circus.
In effect, Cirque du Soleil created a blue ocean: it carved out an entirely new market for artistic theater experiences.
And people love it.
Perhaps you find the example of a circus company a bit too eclectic?
Lower your costs and differentiate yourself.
No problem.
There are thousands of other businesses that have successfully implemented a blue ocean strategy.
Companies like Ford, Nintendo, Netflix, Nespresso, Yellow Tail, Southwest Airlines, and even The Body Shop.
In this section, we’ll take a closer look at how they succeeded.
But first, a few more words about red oceans.
In red oceans – industries that are already established – everyone plays by agreed rules.
Not so long ago, these rules might have looked something like this: “Movies can be bought or rented.
” “Wine needs to have an air of sophistication.
” “Air travel is expensive.
” But in blue oceans, none of these rules apply.
Blue oceans are actively shaped by the actions of the industry players who create them.
Let’s be clear – you don’t need to reinvent the wheel to establish a blue ocean.
Often, a few little tweaks are enough to set a product apart from its competitors and create a new market.
It’s really quite simple: Take a close look at your industry as it is right now.
Then think about which factors you can Raise, Eliminate, Reduce, and Create.
Let’s go through these points step-by-step with examples.
Raise.
Think about how you can elevate the product quality, price point, or service standards of your industry.
Southwest Airlines did this when it became the first US airline to make domestic flights quick, easy, and affordable for everyone.
Eliminate.
Consider which aspects of your product or service can be cut completely.
Remember how Cirque du Soleil got rid of costly and unethical animal acts?
Every industry has some outdated practice they’d be better off abandoning.
Reduce.
Look at which production processes, product features or service offers you can reduce.
Australian wine brand Yellow Tail, for instance, decided to reduce its focus on prestigious vineyards and the aging process in favor of affordable wines with broad appeal.
Create.
Brainstorm what new features you can offer your customers.
Netflix is a premium example of this that barely needs an explanation: it was the first company to offer on-demand streaming for movies and TV shows.
Ideally, considering these questions will help you do two things: lower your costs and differentiate your business from the competition.
And that’s really all you need to create a blue ocean.
Even more so, if your company keeps addressing these four factors – that’s raise, eliminate, reduce, and create –, it will stay one step ahead of the competition at all times.
Final summary
In this short Blink, you’ve learned about the difference between red and blue oceans.
Rather than competing for limited market space, successful businesses often capture new markets with unlimited potential.
They’re discovered by raising, eliminating, reducing, and creating industry factors in a way that lowers costs and sets your business apart from the competition.
So, what are you waiting for?
Stop swimming with the sharks and set sail.