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How a red ocean turns blue; blue ocean strategy

Blue ocean strategy

In this 5 minute blog, I’ll tell you what the difference is between a red vs blue ocean, and how certain entrepreneurial skills can help you survive a bloody red ocean. Because, only with a blue ocean strategy and the right entrepreneurial mindset, you can swim into a more profitable and distinct blue uncontested market space.

Table of contents

Entering a red ocean

A red ocean is a metaphor for a market full of competitors and little differentiation. Cutthroat competition turns an ocean bloody. Are you a business owner? Then the chances are that you are already operating in a market turning red because you lack a clear competitive advantage. Wondering, how you can make competition irrelevant.

So, the question is: where would you like to be? Do you like to operate in the busy and highly competitive market space with battling competitors, or do you prefer the spacious, pioneering, yet very new market space where competition is irrelevant?

Be warned though, once you become successful in that blue ocean, a competitor or copycat will soon arise and take advantage of your blue ocean strategy. However, this competitor will not make the mistakes you have made to get their first. With this first challenger, more will join the yet uncontested market space. In the end, forcing you in a bloody ocean again.

Especially in this Internet episode, more people see an opportunity to start the same (online) business you started earlier. Of course, this process in itself is not new. It is part of entrepreneurship. What to do when you are in a blue uncontested market space, and it is – slowly or not – turning red?

Red ocean vs blue ocean

W. Chan Kim and Renee Mauborgne introduced the term red and blue ocean a few years ago with their book ‘Blue Ocean Strategy.’ This book is a must-read for any small business owner or wannabe entrepreneur.

Do you have the support of a business coach? Let him guide you with this insightful knowledge. There is a ‘step-by-step’ guide inside their book. A business coach can help you grow into a more profitable business. However, first, you have to know how entrepreneurial you are and where your personal strengths and weaknesses lie. Check it now for free.

The professors claim that competition can be rendered irrelevant because the rules of the game are waiting to be set. The image below explains, as a blue ocean strategy summary, the difference between a red and blue ocean market.

Red ocean vs blue ocean strategy
Image: red vs blue ocean strategy. Source: Book ‘Blue Ocean Strategy’

How to survive in a red ocean?

In red oceans, business leaders and entrepreneurs are in a cage of creating innovation and competitive advantage as dominant business thinking. Consequently, they are rivaling head to head with their competition over the same existing customers. So, they all are doing exactly the same things, only better and cheaper to outperform their rivals – an attempt to grab lasting success.

As the existing market becomes busier with the same existing demand, the hopes for profitable growth become smaller. Products turn into commodities, and the bloody competition turns the water bloody. Many companies face difficulties as they try to sway away from the competition.

How to avoid a red ocean trap?

Defeating competition by working harder will not work. Battling for the lowest price, will not give you strategic success either. You will have to move to leave competition behind.

It always reminds me of Alice talking with the red queen of the chessboard in the movie and the book of Lewis Caroll ‘Alice through the looking glass’. Suddenly she starts running, but no matter how hard Alice runs, she stays in the same place. The queen explains that in their country, you have to run at least twice as fast to get somewhere else. This story is an excellent metaphor for what happens in red oceans.

You need to have a blue ocean idea.

Blue ocean strategy

Denote all the industries not in existence today, the unknown market space, untainted by competition. In blue oceans, new demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.

There are two ways to create blue oceans.

The first way, as happened in a few cases, is when a company gives rise to an entirely new industry. An excellent example of a blue ocean strategy is eBay, who did it with the online auction industry or Cirque du Soleil with the circus industry.

The second more common way is to create a blue ocean within a red one. This happens when a company alters the market boundaries of an existing industry, as Curves did within the saturated fitness sector.

Tips and tries to implement a blue ocean strategy

So, what can you do, besides hiring an entrepreneur coach? How to stay blue or become blue again? A few tips and tricks for a blue ocean strategy:

  • Offer benefits that competitors consider irrelevant or over-unique. Think for example of shape; a unique style not typical for the product category; or a unique purpose, for instance, a contribution to the environment and implement this purpose throughout your whole organization, be authentic.
  • Make a combination of benefits for your customer of different product categories or lines of business. The key is to define the total solution buyers seek when they choose a product or service. A simple way to do so is to think about what happens before, during, and after your product is used.
  • Search for other buyer groups or other segments for your product.
  • Find a new appeal.
  • The process of discovering and creating blue oceans is very structured, and entrepreneurs are engaged in the process of reordering market realities in a fundamentally new way. It is not about predicting or preempting industry trends. You can approach your business from a different perspective on time.
  • Focus on powerful commonalities in what buyers value instead of focusing on customer differences.

However, there is one important disclaimer to make with a blue ocean strategy, especially if you are an entrepreneur or small business owner with little budget for marketing and business strategy. Make sure you check whether your entrepreneurial personality is suited for a blue ocean strategy. Check it here for free

Business coaching industry

Coaching is still a relatively young industry. Nowadays, the coaching industry is a $2 billion industry and the second-fastest growing industry in the US. Before coaching became so popular and mainstream, it was a domain run by psychologists. Although the market is huge, coaches still experience it as a blue ocean that turns red.

There are a lot of different types of coaches. Research shows that coaches, in general, have a hard time finding enough clients. The business coach, as a specific type of coach, is faced with the following biggest three challenges:

  1. Lead generation
  2. Conversion of leads
  3. Consistency of income

They are no different from any business owner in that respect. Just like many self-employed business people, business coaches are good at what they do. They are specialists. Probably a lot like you. Though, the red line in these three challenges is more about bringing in customers than there are too few customers.

Getting clients is a struggle for most entrepreneurs in any industry. Especially when they are practicing their profession, they aren’t able to attract new clients. Most coaches, whatever the type of coach, often admit that they have no idea where their next client will come from. They just have to find a structured way to get a constant stream of clients.

Free E-Scan; the marketing tool for coaches

With E-Scan, business coaches can contact potential customers on a regular basis. Even while they are busy coaching business owners to a more profitable business and entering a blue ocean, E-Scan helps them to get new prospects. So, if you are a business coach and you are looking for a novel way to attract clients, and add unique ‘blue’ value to your business, get your free E-Scan and learn the impact of our business coaching tools.

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