In the past, you could only hear your favorite radio personality on the AM/FM dial, and you had to hail a taxi to your next destination when you flew into a new city. Then Sirius XM satellite radio and Uber entered the marketplace, obliterating expectations and creating entirely new markets in their wake. These companies created these new spaces by implementing a “blue ocean strategy.” Let’s briefly examine this technique.
Before Blue Oceans
In their book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, Professors W. Chan Kim and Renee Mauborgne turned the traditional business building techniques upside-down.
Before the book’s publication, analysts believed that the biggest threat to business success was competition. Therefore, to beat out competitors, business owners believed they should:
- evaluate the market by surveying competitive rivalries, the bargaining power of suppliers and customers, and the threat of substitute products in the marketplace;
- expand their competitive advantage by choosing a niche, or highly specialized market to sell their goods or services;
- differentiate their products; and
- reduce costs or prices while retaining profits.
The Blue Ocean Difference
With Blue Ocean Strategy, there is no competition. Under the technique, businesses pursuit differentiation by creating uncontested market space. In doing so, businesses begin to swim in “a blue ocean,” an unknown market where there is no competition or pre-set rules, instead of struggling to survive in “a red ocean,” or places swarming with competition.
How to Implement the Strategy
There are three key components to successfully making the shift from a red ocean to a blue one. They are:
- mindset, or changing your view of where opportunities exist in the marketplace,
- tools, or finding and using the right business systems to adopt a blue ocean strategically, and
- the implementation of a humanistic process that inspires customer confidence.
Once businesses make these shifts, they can begin to see their products and services in new ways, and then they can position them to thrive in unchartered waters.
Do you have questions about implementing a blue ocean strategy for your business? Send us a message or call us at (314) 454-9100 today to discuss your options.
Who is Joel Green?
Joel Green is a seasoned attorney working closely with individual and business clients to provide advice and counsel in addressing their legal questions and concerns. Joel is licensed to practice law in Missouri and Illinois and splits his time between AEGIS’ main office, located in Clayton, Missouri, and its office in O’Fallon, Illinois.
Joel joined AEGIS after spending several years practicing at a large, regional law firm, located in St. Louis, Missouri. Joel has significant experience representing individual and business clients in the areas of estate planning, trust and probate administration, fiduciary relationships, real estate transactions and development, landlord / tenant issues, community associations and commercial and residential property management, strategic business planning and counseling, mergers and acquisitions, franchise and distribution relationships, business entity selection and formation, and commercial transactions.
Joel is on the Advisory Board of Directors for the St. Louis Crisis Nursery, and is a Director for the Delta Dental Health Theatre. Additionally, Joel is a member of the school board for Queen of All Saints School and is active in the parish community.