Blue ocean strategy is very important to competing in industries where the numbers of competitors are very large. The real important for any company is to create new market space to win against competition and get growths.
Research shows that those who used blue ocean strategy were never use competition as benchmark instead they create a value both for buyer and the company itself. In blue ocean demand is created rather than fought over competition as there is a great opportunity for rapid growth and profitability to company.
In Red Ocean Strategy Company compete in existing market space while in blue ocean strategy company creates uncontested market space. In Red Ocean Strategy Company need to beat the competition while in blue ocean Strategy Company put the competition on hold. In Red Ocean Strategy companies exploit the demand while in Blue Ocean strategy companies create and explore new demands in the market.
In Red Ocean companies may choose low cost or differentiation as strategy to align with in market to win over competition. But in Blue Ocean strategy companies uses both low cost and differentiation to align with in market.
Blue Ocean strategies are so helpful for company that it create brand equity that last long for company. Blue oceans are not about the innovation in technology but linking those technologies with buyers’ requirement and create the services for them.
Blue ocean strategy is important for company when they choose target marketing like market segmentation, targeting and product positioning. Blue ocean strategy encourages company to view their markets differently than they have in past.
Cirque is the best example that used blue ocean strategy in outdated market of circus entertainment. Cirque has been able to retain their profitability in highly competitive entertainment world. Cirque had reinvented the circus not only from competitors but they created uncontested market space that made the competitors irrelevant.
GM did the same in 1924 by introducing car for fun and fashion. They create value in attractive industry by technology innovation and understand the value of customers. Japanese did the same by introduced small fuel efficient car in 1977. Chrysler untapped the unattractive market of minivan by introduced Minivan in 1984. Chrysler provided easy to use car with in-built passenger space.
Dell at the other hand created blue ocean strategy in a highly competitive industry by creating new purchase and delivery experience for their customers. Dell became the first company to enter with value services for the customers in the unattractive market in 1990s.
Every company should use blue ocean strategy to achieve growth in the competitive markets. Blue Ocean strategy is like the engine for future growth of company, the intense competition may retain company to gain the growth and sustain profitability but if they choose blue ocean strategy they can hold their competitors irrelevant for them.