Ideas don’t grow on trees, do they? No, they pop up in our minds that house a plethora of ideas, a wide range of them. Talking of business models, not all models taste success. There is not a prescribed path to success. The road taken may vary but what business models finally are expected to bring are profits. Strategies are the keys to success and only the apt key befits the lock. A 2005 book written by W. Chan Kim and Renée Mauborgne illustrated the best organizational strategy to attract profits. You are now possibly thinking of the Blue Ocean Strategy, aren’t you. The Blue Ocean Strategy was one of the hot topics of that year for its brilliant yet subtle description of how a strategy has to be formulated. It is about the market universe and how we can redefine this universe at some innovative levels.
The central concept of the Blue Ocean Strategy is that a company/business organization must direct its focus in an uncontested market space termed as Blue Ocean instead of locking horns with other suppliers in an already established industry. The Blue Ocean strategy is a culmination of various value points that effectively can be summarised as :
Creating a new market space free from competition which is achieved by reconstructing market boundaries and following the right sequence.
Bringing in innovation, checking the feasibility of the product and strategic pricing
The right leadership and fair process
Maintaining originality and focused on customer friendly strategies
The Blue Ocean strategy comes full circle in opposing its counterpart the Red Ocean strategy.
Red Ocean Strategy
Here industry boundaries are known and accepted. There is no scope for innovation but to outwit the rival company in terms of influx of consumers, price stabilization and net profits. Competitions reduces growth prospects
Blue Ocean Strategy
A totally new space you create and where you are the game setter. There is no competition although one must ensure innovation and consequent growth. It is challenging, but considering the deep potential the markets offer, one must give it a shot.
There are many an argument about which strategy must be followed, especially by emergent companies. While the book, clearly demarcates the Red from the Blue it has to be noted that the book has an account of the diverse companies and industries and the innovative measures they followed to take a detour from traditional methods of business planning and give them a tinge of innovation, utility and costs. The authors analysed the winning business players as well as the less successful competitors. The authors argued that while traditional methods always serve as a starting option, it should not restrict us from creating new spaces that lack competition and assure you profits.
— Sebin Mathew