When embarking on the journey of starting a business, it’s common to seek inspiration from others. Most aspiring entrepreneurs have role models they look up to in their chosen field. They observe these role models and draw motivation from their success stories, often entering the same business domain. Take, for instance, an individual inheriting their family’s property dealing business. They witness their parent’s ability to earn a comfortable income, and naturally, they decide to carry forward the family legacy by launching their own property dealing business. In another scenario, a child grows up watching their parents run a restaurant, learning the ropes of the trade from a young age. Such experiences paved the way for them to take over and manage the family restaurant.
Traditionally in India, it’s a common practice for children to continue their parent’s established businesses. Many parents nurture the next generation, ensuring that they are well-equipped to handle the family enterprise. This intergenerational continuation of businesses is prevalent across various sectors. While this practice isn’t inherently right or wrong, what’s crucial is that a significant portion of budding entrepreneurs is deeply influenced by the role models they observe. They tend to emulate these role models in their chosen endeavors, essentially creating more competition in the market.
The process of entering a market that is already teeming with established businesses can lead to both advantageous and disadvantageous outcomes. This phenomenon can be described through the Red Ocean Strategy. The term “red ocean” signifies a marketplace where businesses are in direct competition with each other, akin to sharks in bloody waters. The market is red with competition, and players are constantly vying for the same resources, customers, and opportunities. This competitive environment can be fruitful in some respects.
In many cases, an industry with a high level of competition already has a well-defined customer base. Customers are familiar with the products or services offered in that sector. For example, consider a neighborhood with several hardware shops. If you open another hardware store, you may initially be seen as just another player in an already crowded field. However, this isn’t always detrimental.
In some situations, this heightened competition in a particular area creates a market or hub for a specific category of products or services. Think of a cluster of furniture shops in a locality. Customers in need of furniture automatically gravitate towards this cluster of stores because they know they’ll find a wide variety of options in one place. Even if your shop is new in the vicinity, being part of the market cluster can work to your advantage.
Customers tend to visit these hubs in the expectation of finding what they need. Moreover, the presence of multiple businesses competing in the same field means there’s a collective marketing effect. People are more likely to come to the area, which benefits all the businesses there.
However, this approach isn’t universally applicable. Enter the Blue Ocean Strategy – a radical shift in perspective and approach. The term “blue ocean” symbolizes a space in the market where the competition is non-existent or minimal. It’s a space where your business operates in a league of its own, free from the bloodthirsty rivalry seen in the red ocean.
The Blue Ocean Strategy is about creating a new market, often by shifting the focus from competition to innovation. Instead of entering an existing market and competing head-on, you carve a niche where competition is irrelevant. Successful companies that have followed this strategy often set new industry standards and create their unique customer base.
To illustrate the difference between the two strategies, consider the launch of the first iPhone by Apple. When Apple introduced the iPhone to the world, it didn’t enter an existing mobile phone market with fierce competition. Instead, it created a new market – a market that was ready to embrace the innovative concept of a touchscreen smartphone. Apple effectively shifted its focus from competition to innovation, making its product the market leader. The iPhone became the very definition of innovation in the mobile technology sector.
Tesla, the electric car company founded by Elon Musk, is another prime example of the Blue Ocean Strategy in action. When Tesla started manufacturing electric cars, there were very few players in the electric vehicle industry. This pioneering spirit allowed Tesla to set new standards and become the foremost brand in the market.
This strategy, however, isn’t limited to large corporations. It can also be adopted by smaller businesses and entrepreneurs. The key is to identify an unmet need or an underserved market and create a solution that meets these demands. To truly succeed in the Blue Ocean Strategy, it’s crucial to shift your perspective from competition with others in the industry to innovation that transforms the industry itself.
One of the most famous cases of implementing the Blue Ocean Strategy is Amazon. Amazon identified a gap in the market for online retail and completely transformed the way people shop. Instead of competing with established brick-and-mortar retailers, they established themselves as pioneers in the world of e-commerce.
Amazon’s success is not only based on innovation but also on creating a massive market space. They have consistently expanded their offerings to include not just products but also services, like cloud computing. By providing a diverse range of services, they’ve become a one-stop solution for a multitude of customer needs, thus significantly reducing competition in their specific market.
The Blue Ocean Strategy stands as a testament to the power of thinking beyond the boundaries of the existing market. While there’s nothing wrong with competing in a well-established market, your chances of growth and success expand exponentially when you explore new horizons. By identifying unmet needs, driving innovation, and creating a market that you can dominate, you can leave the cutthroat competition of the red ocean behind.
The Red Ocean Strategy, on the other hand, is not inherently flawed. It’s a viable approach, especially when starting a basic business in an already established market. This approach focuses on carving a niche within an existing framework and increasing market share. The key to thriving in the red ocean is to differentiate yourself from the competition. Providing better quality, offering exceptional customer service, or competitive pricing can help you secure your position.
The choice between the Red Ocean and Blue Ocean Strategies depends on various factors, including your business goals, the market you’re entering, and your willingness to innovate. Ultimately, what’s most important is understanding that both strategies have their place and can lead to business success. The key is to align your strategy with your objectives and target market to make the most of your venture.
When considering the phenomenon of Bitcoin, one must contemplate its essence. What is Bitcoin, if not a response to a need? It emerged as a solution for a decentralized system, simplifying the process of trading. However, it has become predominantly utilized as an investment vehicle. Despite its innovative nature, Bitcoin falls under the category of the blue ocean strategy. It represents a novel concept that previously didn’t exist, catering to the evolving demands of the digital age. While it may not necessarily require completely out-of-the-box thinking, it certainly demonstrates the potential of identifying and fulfilling an unmet need in the market.
Similarly, let’s examine the success stories of Ola and Uber. Taxis have long been a part of the transportation landscape, but these companies took the concept further by enhancing the convenience and accessibility of booking rides. By leveraging technology and connectivity, they were able to reach a larger scale, transforming the traditional taxi service into a more streamlined and user-friendly experience. Although their approach initially aligned with the blue ocean strategy, as more players entered the market, it gradually transitioned into the red ocean strategy.
In my personal journey within the network marketing realm, I observed a significant gap in the training system. While motivational talks were prevalent, there was a notable lack of focus on skill development. Recognizing this void, I launched the “Bang on in Network Marketing” training program. At the time of its introduction, it was the first of its kind in the market. This initiative marked a considerable gap in the Indian network marketing landscape, presenting a prime example of the blue ocean strategy in action.
The advantage of being the first mover in a blue ocean market cannot be understated. By identifying an unaddressed need and promptly delivering a solution, one can establish themselves as the go-to source for that particular requirement. However, it’s important to understand that as the market grows and more players enter the scene, the blue ocean can gradually transform into a red ocean. Nevertheless, the first-mover advantage is often pivotal in carving out a distinct position and capturing the attention of the target audience.
A prime example of the implementation of the blue ocean strategy is the launch of GoSelfMade University, a platform that provides free financial education. This initiative stands out as a unique offering in the market, given the scarcity of comprehensive financial education resources available online. While there are numerous paid courses and scattered information on different platforms, GoSelfMade University presents a holistic and structured approach to financial education, providing valuable insights on a daily basis. This approach reflects my commitment to exemplifying the blue ocean strategy in my own endeavors.
The essence of the blue ocean strategy lies in doing something that others aren’t doing. It’s about innovation within your field and establishing yourself as a pioneer and a leader. While emulation isn’t uncommon in the world of business, the real key to success lies in being the trailblazer, setting new standards, and constantly adapting to market changes. An entrepreneur’s role fundamentally revolves around innovation, constantly introducing new ideas, and staying ahead of the curve.
One of the core principles in business is that the only constant is change. Entrepreneurs who embrace change and adapt their business models accordingly are the ones who truly thrive. Stagnation is the enemy of progress, and in an ever-evolving market, the ability to adapt is crucial for long-term success. While it’s possible to thrive in a red ocean market through differentiation, the real growth and substantial profit margins lie within the blue ocean.
Statistics reveal that only a small percentage, approximately 3 to 4%, of people enter the blue ocean, while the majority, about 96 to 97%, opt for the red ocean strategy. However, those who venture into the blue ocean tend to claim a more significant share of profits, often up to 70%, in comparison to those confined within the red ocean, with maximum profit margins capped at 30%. A prime example of this is evident in the success of Amazon’s founder, the richest man in the world. His ability to dominate the market stems from his strategic entry into the blue ocean, allowing him to transcend the limitations imposed by a red ocean market.
To truly make your mark in the world of business, it’s essential to embrace the blue ocean strategy. With the entire ocean at your disposal, you can navigate freely and capitalize on the boundless opportunities available. However, it’s critical to gauge your own ambitions and decide whether you aim to settle for the limited prospects of the red ocean or venture into the vast, uncharted territory of the blue ocean. The choice lies with you, and your decision will ultimately shape the course of your entrepreneurial journey.