Swimming towards the Blue Ocean, Beyond Competition towards

Competency

Today, most companies work under intensive competition and attempt to do everything
possible to achieve market share. If the item is subject to price pressure, the activities of a
company may well be threatened. This generally happens when the company is in a saturated
market

This scenario is inevitable, the scenario is also called a Red Ocean but then companies with
some effort can always swim towards the Blue Ocean beyond competition then what is a Blue
ocean strategy? Why is It Important? How do we go about swimming towards this Horizon?

In this Write up, we look into the Blue ocean strategy in detail. We look into the Strategy from
the eyes of the writers who coined the term, W. Chan Kim and Renee Maubogne and the very
first paper that coined the term, we look into the 5 step process of getting towards the blue
ocean by Steve Denning of Forbes and also look into those red ocean traps to avoid to create a
Blue ocean! By Chan Kim himself. We look into what the strategy modern giants like Amazon,
Netflix, Uber and Airbnb Did to reach the Blue Ocean by Bernhard Schroeder, finally we look
into our very own National unicorn Oyo rooms Race towards Blue Ocean with the perfect
execution by Renowned marketing consultant Navas Kilikkottu.

Let’s begin with the most basic question what is Blue Ocean Strategy?

The Blue Ocean Strategy refers to a sector in which there is no competition or very little
competition. This approach involves the search for a company in which very few companies
work and where no price pressure exists.

(W & Renee, 2004)The Blue Ocean Strategy refers to a sector in which there is no competition
or very little competition. This approach involves the search for a company in which very few
companies work and where no price pressure exists. This word Blue Ocean was coined by (W
& Renee, 2004) in 2004 Kim defined the Phenomenon as Rise of need when Competition is no
way for high results in overcrowded sectors. The real chance is to produce uncontested blue
oceans of market.

Although the word may be new, we always had blue oceans. Looking back 100 years and
question which known sectors were unknown today. The industry as essential as cars, music
recording, aviation, petrochemicals, pharmaceuticals and management consulting have been
unheard of or just started to emerge. Now if we just turn around and ask the same question for
30 years before. Multi-billion dollar industry is jumping out once again, including E-
Commerce, AI, 3D cinemas and home Streaming videos, mutual funds, Smart phones and
Mars landing missions extra were all unheard of.

Today the Phenomenon is so fast, that the things that were around only few years ago don’t
exist anymore, Low many of us use Cellular Phones today? How many of Us Use today use
the same old Fat TV. Now if we think a 20 years ahead can we imagine the amount things that
we now use could be irrelevant?

Why the Blue Ocean?

The Company that wants to survive today stay calmed in there Blue Ocean, Look at Kodak or
Nokia, They the first ever concept of a digital camera a Touch Phone Respectively, but they
did not take these concepts ahead, the thought it was not for today, but forgot the future on the
other hand Look at the Tata’s or the Birla’s, they have survived for Hundreds of Years and
because of there think for the future attitude.

Creation through Simultaneous Pursuit of Differentiation and Low cost

(W & Renee, 2004) A Blue Ocean is created in the region

where actions affect both value and cost to buyers and the
company in itself. So the company starts finding the
integration of its cost to the Buyer Value and what it then
creates is a Blue ocean.
The three key components in successful Blue Ocean shifts

(Denning, 2017) There are three key components in a successful Blue Ocean Shifts

Mind-set: It’s a shift in mind-set, involving companies to expand mental horizons a

shift in understanding were the opportunity lies
Tools: Practical tools are very important for a systematic translation of thinking to
commercially offering
Human-ness: A humanistic process which inspires people’s confidence to own and
drive the process for effective execution.

These key components help the companies in shifting from market competing to market
creating

The Five Step Process

1. Select the correct location to begin and build the correct Blue Ocean team
2. Make sure the present situation is evident
3. Develop hidden dots that restrict the industry's present size and discover an ocean of
non-clients
4. Reconstructing market borders systematically and creating Blue Ocean alternatives.
5. Choose the correct Blue Ocean move, perform fast market trials, complete and start the
transition.
 (Denning, 2017)Though this process, the organization is
able to move from the limitations of competing within
the existing industry (“settlers”) to migrate towards
greater value improvement (“migrators”) and eventually
towards creating new value for people who are not
already customers (the “pioneers” of marketing-creating
innovation.) (Denning, 2017)

To Create a create a blue ocean brands should primarily not follow Red ocean Traps
which often most big brands end up doing

(W & Renee, Insead Knowledge, 2015)

Trap One: Making Existing Customers Happier

New demand generation is central to any approach for creating a market. However, marketing
executives–qualified to think that the consumer is king–or queen–often assume they have to
concentrate on making their current customers happier in order to create fresh demand. While
it is nice to have happy clients, the creation of fresh markets is unlikely. To do this, a company
must concentrate on non-customers.
Trap Two: Treating Market-Creating Strategies as Niche Strategies

(W & Renee, Insead Knowledge, 2015) The field of marketing has placed great emphasis on
using ever-finer market segmentation to identify and capture niche markets. Though niche
strategies can be very effective, uncovering a niche in an existing space is not the same thing
as identifying a new market space.

Trap 3: Confusing Technology Innovation with Market-Creating Strategies

Creation of Blue Ocean can come in simple ways too. Often organisation spend thousands of
dollars in finding technology to create simple markets but a simple plan to understand Non
customer need can lead to New market creation.

Trap 4: Equating Creative Destruction with Market Creation

Market creation does not always involve destruction it involves non-destructive creation where
demand is created with or without involving existing service.

Trap 5: Equating Market-Creating Strategies with Differentiation

When businesses suppose, wrongly, think that development of a market represents distinction,
they concentrate on improving or creating to stand apart and pay little attention to what they
can eliminate or decrease, in order to obtain low price simultaneously. As a consequence they
often become top competitors in a current industry space accidentally, rather than finding new
market space

So far we have understood what Blue Ocean is, how its Process is undergone and what are the
steps to avoid now let’s look in how Some of the companies that have successfully created a
Blue ocean of their own.

What Amazon, Netflix, Uber and Airbnb Did to head for Blue Ocean

(Schroedar, 2019)Amazon did not build bookstores but built an enterprise infrastructure to have
access to one million book titles and competed well with Borders and Barnes & Noble. Netflix
did not use stores in their business model to compete with Blockbuster; instead they focused
on customer service. Uber did not even try to buy cars and compete with the independent taxi
companies, they created a mobile app. Airbnb does not own homes or hotels, instead they
redefined the travel experience by uniting existing property owners onto a common easy-to-
use platform.
These companies discover what is now popularly known as Four Action Framework to
reconstruct buyer value elements

Raise: What factors should be raised well above the industry's standard? (Schroedar,
2019)

Reduce: What factors were a result of competing against other industries and can be
reduced? (Schroedar, 2019)

Eliminate: Which factors that the industry has long competed on should be eliminated?
(Schroedar, 2019)

Create: Which factors should be created that the industry has never offered?
(Schroedar, 2019)

Blue Ocean an Indian example

A lot of Indian companies have been very successful in creating a Blue ocean of their oven in
this write up let’s look in the success story of Oyo rooms ended up creating a Blue ocean of its
own.

(Kilikkottu, 2016)OYO Rooms, formerly known as Oravel.com, was established in 2013 by

Riteish Agarwal. This four year old company has already interfered with the application of
technology in the Indian hospitality segment. It makes it easier for tourists to locate budget
hotels that match the importance of star hotels. OYO Rooms today is in 174 towns and there
are over 4500 hotels providing a standardized stay. OYO's network ensures that multiple room
measures, including free Wi-Fi and breakfast, flat-screen TVs, toiletries for the brands,6-inch
shower heads, a drinking bathroom and so on, are standardized. A periodic audit of these norms
ensures the predictable and high-quality experience.

Oyo rooms eliminated the business concept of 3 star of higher hotels, it matched there
availability while ensuring (Kilikkottu, 2016)As a consequence the OYO Rooms could
decrease cost per room considerably in comparison with three-star hotels and provide superior
client quality. It created its own market in the Hospitality segment.

The Way Forward

It is increasingly clear that Blue Ocean strategy is about a lot more than just formulating a
strategy or implementing a single initiative. Sustained success inevitably entails organizational
transformation.
Articles Reviewed

References
Denning, S. (2017, September 24th). Moving To Blue Ocean Strategy: A Five-Step Process To Make
The Shift. Retrieved from Forbes:
https://www.forbes.com/sites/stevedenning/2017/09/24/moving-to-blue-ocean-strategy-a-
five-step-process-to-make-the-shift/#f9529737f119

Kilikkottu, N. (2016, Feburary). Brand Strategy . Retrieved from Brand Well.

Schroedar, B. (2019, May). Forbes. Retrieved from Fobes:

https://www.forbes.com/sites/bernhardschroeder/2019/05/11/its-not-about-ideas-do-
what-amazon-netflix-uber-and-airbnb-did-head-for-a-blue-ocean/#10b417fe207e

W, C. K., & Renee, M. (2004). Blue Ocean Strategy. Harvard Business Review.

W, C. K., & Renee, M. (2015, June). Insead Knowledge. Retrieved from Knowledge:
https://knowledge.insead.edu/strategy/want-to-create-a-blue-ocean-avoid-these-six-red-
ocean-traps-4082