As the market space continues to expand and becomes more crowded alongside with change in shopping preference, companies compete fiercely for a greater share of limited demand. Nearly every company is involved with some form of competition either direct or indirect which has led to a zero-sum game, creating a market competing strategy that divides the already available wealth between rival companies such that as competition increases, prospect for profit and growth declines. This cut throat competition in existing industries has thus been employed as a today’s market which is general called the RED OCEAN MARKET as these competitions among industries has turned the ocean bloody red.
The business spaces grow narrowly creating a lesser edge to each established market. Tomorrow’s market is all about redefining the terms of competition and moving into the blue ocean where you have the water to yourself. The goal of these strategies is not to beat the competition, but to make the competition irrelevant.
The pursuit of high product differentiation and low cost while ignoring the competition is known as the “BLUE OCEAN MARKET” and this is the market of tomorrow.
This strategic planning model is a departure from the typical management exercise that focuses on number crunching and competitive bench marking. This strategy shifts attention from supply to demand, from a focus on implementing to a focus of creating value that birth new demand, which is achieved by differentiation and low cost. By expanding the demand side of the economy, new wealth is created.
Difference between the Blue Ocean and Red Ocean Market
RED OCEAN MARKET BLUE OCEAN MARKET
|Competing in an existing market space||Uncontested market space|
|Exploit existing demand||Create and capture new demand|
|Trade-off between value and cost||No trade-off between value and cost|
|Differentiation or low cost||Differentiation and low cost|
Shifting to a Blue Ocean Market
the blue ocean shift means diverting the organization and the whole team from a bloody and cut-throat market to a wider and less competitive market. in the book written by professor W. Chan Kim and Renee Maruborgne titled ‘The blue ocean shift: beyond competing’ these authors came up with three key components
- Mindset: Blue Ocean strategy is fundamentally a shift in mindset. It involves “expanding mental horizons and shifting understanding of where opportunity lies.”
- Roadmap: Successful implementers of Blue Ocean strategy have used practical tools to systematically “translate blue ocean thinking into commercially compelling new offerings,” along with clear guidiance on how to apply them
- Human-ness: this component has helped built confidence to systematically “translate blue ocean thinking into commercially compelling new offerings.” Sporadic, one-off “Blue Ocean strategy” is one thing: systematically adopting Blue Ocean thinking is another.
With the unstable and highly competitive market, you should not build your growth strategy based on existing environmental and industry conditions it is important to do today’s job with tomorrow’s market by creating and executing a growth strategy that place you at the top of the market chain.
In a variety of sectors from business-to-customer and business-to-business, to public, nonprofit, and governments, a concise understanding of the process of new market creation and growth that unlocks people’s creativity as much as the confidence to act is needed. Get help charting your way up with a step-by-step plan