The name is intriguing right? It sounds like something you might be interested in just because the words themselves evoke something within you. And you’re right. It’s an up-and-comer in the world of business management. It’s a new ‘buzz’ phrase worth looking into.
Blue Ocean strategy has been one of the more popular corporate strategies to be talked about in recent years. Exactly what does blue ocean strategy involve and how can it be effective? What is the role of the manager or leader in effectively designing and implementing blue ocean strategy?
What is it?
Industries today are overcrowded. There is a continuous, long, arduous battle to capture market share, and to keep it. Originally created and discussed in a book by W Chan Kim and Renée Mauborgne, this strategy is an effort to avoid some of the stresses of head-to-head competition… by getting around it altogether (kind of). It is a systematic approach to ditching the traditional ways of regarding your competition and in some ways, making it irrelevant.
Blue Ocean Strategy involves the creation of new market space through innovation and careful observance. It focuses on creating new factors that add value to your product and de-emphasizes the obsession with competition.
The well-known book-selling giant Barnes and Noble can illustrate this concept. Instead of focusing mostly on what types of books to sell, B&N used a more innovative approach. They took a step back and asked what consumers do, or want to do, in connection with buying a book. They want to sit in a big comfy chair and have a latte. They want to peruse magazines without feeling pressured. They want comfort and Barnes and Noble made this a hot commodity. They found a niche, a veritable “blue ocean” and capitalized on it.
This strategy shifts the perception that in order to be profitable you must out-compete the others in the market. Blue Ocean strategy serves to disprove this common belief and give organizations hope that they, too, can get ahead of the game.
Why is it successful?
This can be an extremely successful strategy because it captures under-the-surface demand and encourages the unlocking of new resources. It gives consumers new options that other competitors do not offer and can lead to substantially increased profitability.
At the Management Level:
The manager or leader plays an integral role in the implementation and design of this strategy because they should be the main driving force behind it. They are responsible for communicating with team members the need to expand their horizons and create new value rather than just trying to improve on what is currently offered. It is also their job to ensure that there is no “canyon” or misunderstandings amongst employees. In order for the strategy to work, everyone must believe in it. And if they do, it can be a powerful force!
At the Implementation Level:
Of course this all seems overwhelming. And wouldn’t it simply take too many precious resources to put a plan like this in motion? You probably think there isn’t room in an already-stressed budget to even consider something so out-of-the-box. But the best part about Blue Ocean Strategy is that it is designed with simplicity.
As discussed in the Blue Ocean Strategy book, the two key pieces to successful implementation are leadership and fair process. In order to expend the least amount of resources during a change, an organization’s leader must capitalize on influential employees’ strengths to complete changes at a low cost. The other side of the coin is utilizing a fair process, an essential part of winning employees confidence in your project. This mitigates the possibility of negative reactions and resentment that can arise when trying to implement something as novel as Blue Ocean Strategy concept.
The book, Blue Ocean Strategy, is a fantastic resource to explore if the concept sounds like something you might like to tackle. If you’re unsure, that’s understandable. Just keep in mind that you can’t always exist comfortably in the niche you’ve created for your company or product, especially if successful. There will always be a line of competitors looking not only to replicate your success, but to exceed it entirely. Keeping your finger on the pulse of your competitors is an important practice to keep, and learning what could be done better is even more so. Nonetheless, we’re reminded that no matter what space you’ve carved out for yourself, it’s rarely permanent. Blue Ocean’s included.