7 Powerful Blue Ocean Strategy Examples That Left the Competition Behind

Companies, startups and entrepreneurs that adopt the blue ocean strategy consciously make strategic moves to venture into uncharted waters alone instead of swimming with the current. The ERRC Grid is a tool that helps companies apply the Four Actions Framework systematically. It facilitates the identification of factors to eliminate, reduce, raise, and create in order to formulate a new value proposition. When it comes to tapping each tier, it is important to understand its unique characteristics.

Year after year, Marvel movies have smashed their way to the top of the earnings charts. The Avengers, Age of Ultron, Infinity War, Endgame, and Black Panther are the five highest-grossing superhero films of all time, accounting for half of the lifetime top-ten grossing films of any genre. The same company can be brilliant at one moment and wrongheaded at another.

1. In this market space, industry boundaries are defined and competition rules are known, thereby making it high-pressure and volatile.
2. By looking across time from the value a market delivers today to the value it might deliver tomorrow, businesses can actively shape their future and enter a new blue ocean.
3. The chart below summarizes the distinct characteristics of competing in red oceans (Red Ocean Strategy) versus creating a blue ocean (Blue Ocean Strategy).
4. The Marvel blue ocean example illustrates how a company used differentiation and low cost to restore its blue ocean business.
5. A regular airline with a conventional offering cannot come up with such a tagline unless there is focus and divergence.
6. Because blue ocean strategies represent a significant departure from red oceans, it is key to address adoption hurdles up front.

Step 4: Visual Communication

It hinges on a shift from convergence to divergence in value curves at lower costs thus raising the bar of execution challenge. To secure a strong revenue stream for its offering, a company must set the right strategic price. This step ensures that buyers not only will want to buy its offering but also will have a compelling ability to pay for it. The most used lever is that of customer productivity, in which an offering helps a customer do things faster or better. Companies must check whether their offering has removed the greatest blocks to utility across the entire buyer experience cycle for customers and noncustomers. The greatest blocks to utility often represent the greatest and most pressing opportunities to unlock exceptional value.

By looking at the alternatives of beer and ready-to-drink cocktails, Casella Wines created three new factors in the US wine industry – easy drinking, easy to select, and fun and adventure. blue ocean strategy meaning HealthMedia is a blue ocean strategy example of looking across strategic groups within an industry to create a blue ocean. If this sounds too good to be true, let’s explore examples of blue ocean strategy, its benefits and the companies that have successfully implemented it. The Buyer Utility Map is a tool that identifies potential areas of customer dissatisfaction and opportunities for innovation. Surviving further requires innovating to provide the society with new products. New markets, because of the absence of competition, are certainly more profitable.

Yellow Tail – a blue ocean example in the wine industry

Use knowledge from non-customers and unaddressed pain points to guide you in reframing your industry to address the new customer segment well. Customer interviews can be an incredible source of insights into what doesn’t work well and where the potential hotspots are. Targeting new customer segments requires challenging the status quo and pushing the established boundaries, which differs significantly from operating in a Red Ocean.

Step 2: Visual Exploration

These are the blue ocean offerings that are the most powerful sources of profitable growth. These businesses have a mass following of customers and their value curve diverges from the competition on the strategy canvas. Each approach requires a deep understanding of the market, customer needs, and the company’s capabilities.

Whether you are part of a big company or running your own startup, to execute a successful Blue Ocean Strategy, you need the right people around you with an appropriate mindset for what’s next. Tetris is considered one of the best-selling games in the world, even though its peak was decades ago. To make this work, product teams identify a customer segment outside the scope of the other market players, and the product can address unmet needs.

Getting the strategic sequence right

Traditionally, companies choose to either differentiate their products or services from the competition (by offering higher quality, more features, or better customer service) or to compete on price. By simultaneously offering low prices and the convenience of streaming with a vast content library, Netflix quickly become the dominant player in an uncontested market space. By the time competition followed, it was already a dominant player with an established name.

The result was an easy-drinking wine that did not require years to develop an appreciation for. Founded in 2014, the company has quickly become one of the leading fintech startups in France until it was successfully sold to BNP Paribas for over 200 million euros in 2017. Stitch Fix was founded by a woman and, with 86% of female employees, the company has one of the largest female workforces in the AI space, if not across almost all industries. Just over two decades ago, the firm emerged from bankruptcy saddled with USD $250 million of high-interest debt, a decimated sales channel, disgruntled customers, and a skeleton staff of employees.

It must also offer convenience by being easy to obtain, use, or dispose of. This last step involves distributing the before-and-after strategic profiles on one page for easy comparison. The new strategic profile should become the reference point for all investment decisions. It is important to support only those projects and operational moves that allow a business to close the gaps to actualize the new strategy. While most managers have a strong impression of how they and their competitors fare within their scope of their responsibility, they often fail to see the overall industry dynamics. BOS provides a four-step strategy visualization tool that serves to unlock people’s creativity.

1. It must also offer convenience by being easy to obtain, use, or dispose of.
2. Companies can carve out a unique and profitable niche for themselves in the market by creating new demand and value for customers rather than competing with existing rivals.
3. It was able to create a new market space for itself by going beyond the conventional DVD rental market (red ocean).
4. While most managers have a strong impression of how they and their competitors fare within their scope of their responsibility, they often fail to see the overall industry dynamics.
5. This involves comparing a business with its competitors by drawing “as is” strategy canvas and finding where the strategy needs to change.
6. Nintendo eliminated or reduced factors that were thought to be vital in the market – high-definition graphics and sound, fast chips, controllers with many buttons, and violent lifelike games, and so on.

Each of these examples demonstrates how companies can achieve success by competing within existing markets, creating new market spaces, and making the competition irrelevant. Understanding the Blue Ocean Strategy is critical for consultants, as it provides a different perspective on growth and competition. It allows consultants to guide their clients towards identifying and creating new market spaces, fostering innovation, and capturing new demand. The strategy presents a unique approach to achieving sustainable growth and profitability, making it a valuable concept in a consultant’s toolkit. However, its potential risks and challenges necessitate careful planning, research, and execution.