In business strategy, creating uncontested market spaces—coined as “blue oceans”—has revolutionized how companies approach growth and competition. This approach, detailed in “Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne, advocates creating new markets rather than battling existing ones. Here are several key strategies to successfully create these blue oceans:
Redefine Market Boundaries
To create an uncontested market space, companies must first look beyond the existing boundaries of their industry. This involves questioning the status quo and exploring new possibilities. Businesses can redefine their market boundaries by understanding the needs of potential customers who are currently overlooked or under-served. This could mean targeting a different demographic, exploring new geographic regions, or creating an entirely new category of products or services.
Focus on Non-Customers
One of the foundational steps to creating a blue ocean is to focus on non-customers rather than trying to win over the existing customers of competitors. By understanding why certain people are not using your products or services, you can identify critical barriers to entry. Addressing these barriers—cost, accessibility, or awareness—can unlock a whole new, previously untapped customer base.
Offer a Leap in Value
Creating a blue ocean is not merely about being different; it’s about offering a significant leap in value to the company and its customers. This leap in value involves improving the cost structure and enhancing customer benefits. By doing so, a company can open up new demand and make the competition irrelevant. Innovating the value proposition requires a deep understanding of what customers truly value and finding novel ways to deliver that value.
Utilize the ERRC Framework
The ERRC framework (Eliminate-Reduce-Raise-Create) is a practical tool for companies looking to create a blue ocean. It helps businesses systematically consider what aspects of their product or service can be eliminated or reduced to cut costs and what can be raised or created to increase customer value. This strategic approach ensures that companies can offer something unique and valuable, setting them apart from the competition.
Build a Sustainable Strategy
Finally, creating a blue ocean is more than just a one-off achievement; it requires building a sustainable strategy over the long term. This involves continuously monitoring market trends, customer feedback, and competitive actions to stay ahead. Companies must be agile and ready to adapt their strategies as necessary to maintain their uncontested market space. This might involve continuous innovation, expanding the initial offering, or even creating new blue oceans as the market evolves.
Creating uncontested market spaces is a bold but advantageous strategy that can lead to significant growth and long-term success. By focusing on these critical strategies, companies can navigate potential markets’ vast, unexplored waters, offering unique value propositions that draw customers away from the crowded, competitive red oceans. This approach drives profitability and growth and fosters a culture of innovation and forward-thinking within the organization.