Dear friend,
If you look at the world of business, you won’t see too much creativity.
To be honest, almost every industry, every niche, every business applies the same formula for the last 100 – 200 years.
This is – look at what others are doing and do it better.
Do it faster, do it cheaper, do it safer.
Give your marketplace a reason to pick you instead of the competition.
Almost all products are incremental improvements over the status quo.
If you look carefully, most products are incremental improvements within the same product line. Apple is such an example. You’ll be hard pressed to find too much difference from one iPhone to another. Sure, if you compare the iPhone 6 with the iPhone 10, there are major improvements.
But if you compare two similar generations as the 6S and 7. It’s basically the same product plus a few things done better.
Or you can look at cars. The new model is basically the old model plus a new media player or improved suspensions or maybe a more efficient engine.
And this is not limited to features and benefits. Maybe you can produce them cheaper. Ship faster. You offer a longer warranty. Your products have the same features but they have a better quality.
The list could go on but the essence is always the same.
You are competing with others to bring something more attractive to the marketplace. This is the red ocean strategy and how most of the business world works today.
And then you have a blue ocean.
What is one?
It’s harder to explain, but it is when a company fulfills the same needs through a different approach.
For example, in the taxi industry charging less or having cleaner cars is a red ocean strategy. You’d compete on features to make it more attractive to the marketplace.
Uber, Grab and the million clones available are all blue ocean.
They provide transportation but instead of competing; they deliver it in a new manner. This is especially true for Uber-like services that use scooters and motorcycles for transportation. The customer receives the desired outcome (transportation from A to B) but he gets it in a different way from the status quo (no meter, fixed fare, choice of the vehicle, increased security, etc).
Another example of a blue ocean is Ryan Air in Europe.
This is an air carrier that offers 9.99 EUR trips between major European cities. Yes, you can fly from Berlin to London for about $12. The taxi trip from the airport to the city is more expensive. While all the other carriers are trying to make their experiences better by giving free meals or in-flight wi-fi, Ryan Air creates its own category – ultra low flights, where there is little comfort, where it is not convenient, where you are sold lottery tickets mid flight but again, where can you get a 9.99 EUR trip between two major European capitals?
A blue ocean strategy my friend is when you look at what the customer does and you find a different way to fulfill that than the competition.
AirBnB is a blue ocean unicorn. It offers accommodations, but it does not compete with hotels. Tesla is another one. It sells cars and transportation but the way it deliver transportation is so different from everyone else that it creates its own category.
And maybe this is the best way to determine if a business is using a blue ocean strategy – if they have distanced themselves enough from the usual way of doing things to be named the kings of their own categories.
A famous example and the one used mostly in management books is Nintendo and the Nintendo Wii. So gaming consoles always competed on specs, on being faster, on displaying better graphics. Nintendo delivered to the marketplace a console that was far inferior power wise to Xbox 360 and PlayStation 3 but also did not have their AAA titles.
Instead, they’ve created a gaming console that non gamers can use. This means moms and grandfathers and young children. They’ve replaced cinematic video games with tennis and bowling. This created a new category, gaming consoles for people that rarely play video games and based on the results, it was a very profitable decision.
So why am I telling you all of this?
Because you have a choice.
You can compete with everyone else and make it better or cheaper or find a small advantage, hoping that the marketplace will pay attention to you.
And there is nothing wrong with this. In many markets doing a better job will get you market share. Competence is so rare that if you’re hardworking and ambitious, that will put you ahead of most other businesses.
But most times, your competition is not incompetent and your marketplace is quite crowded. This means you can’t stand out by taking what others are doing and adding more. There are too many wanting a seat at the table to be effective doing this.
So then, you must disrupt.
You must think of a way that nobody else is using to deliver the same benefit, one that makes sense to the customer.
You can’t just take a hammer and make it better. You must invent a new way of putting nails in the wall. You can’t put lipstick on a pig and then try to convince your marketplace that your pig is different. You need something different.
How do you do this?
It’s a creative process.
A simple way is to look at other industries and see how they’ve done it. The hotel industry borrowed ideas from the airline carriers through dynamic pricing. If a property is in high demand, it will cost more. Airline carriers originally used this trying to fill their planes as a plane half full and a plane full cost about the same to run.
Another way is to ask yourself what was not possible a few years ago but now technology made it viable. Technology disrupts, and it is creating opportunities for blue oceans constantly.
When Apple launched the iPhone and later the app store, they’ve made it possible to do things differently.
NetFlix is not a complicated idea, but it became viable only with high speed Internet.
WordPress gave everyone the chance to run their own website and while I’m sure someone thought of a CMS years before they launched WP, it took certain standards and technologies to become mainstream before it took off.
Or you can ask – how people do things in other places? Your blue ocean in your country may be something that’s normal in another country. It need not be an idea that nobody ever thought of. You’re not trying to be creative.
It needs to be an idea that nobody else used yet and has potential to satisfy your marketplace while creating its own category.
Creating your own blue ocean is not easy nor it is a five-step process. It takes thinking time. But once you’ve found a few good ideas, either borrowed or which you’ve come with yourself, you are in the Nirvana of business positioning. You’re not competing on price or features or service.
You’re the king of your own category instead.
And it’s good to be the king. That’s where most of the money is.
Best regards,
Imran
