Small Business Growth with the Amazing Blue Ocean Strategy
In business there are many different marketing terms you may hear, one of them is the blue ocean strategy. Blue ocean strategy is a business framework that can help you stand out and be profitable in the marketplace. There are many small and big businesses that use the technique well. One of these businesses is the well-known Cirque du Soleil.
Cirque du Soleil took a well-loved industry the circus, reviewed the business model and by listening to the people they turned the business model into a blue ocean strategy by finding a space they could fill which people would pay for.
Cirque du Soleil knew everyone loved circuses especially watching the acrobats and performers. In most circuses, exotic animals also performed but many people were not happy about this. During the 1970s and 1980s, the audiences at circuses were beginning to decline in numbers. It was during the time when circuses were declining that Cirque du Soleil commenced.
In 1984 Cirque du Soleil started in Canada where street performers showed their skills and entertained large audiences. At first Cirque du Soleil like a circus performed in a big top like a circus tent. It was not long before Cirque du Soleil started performing in theatres which is where they still perform across the world today.
Cirque du Soleil is an example of the blue ocean marketing strategy because;
- it reinvented the circus model taking the parts that the people loved and would pay to see.
- by not having animals the cost of operation was reduced.
- due to being theatrical performers showing their acrobatics and dance skills the audience captured were not traditional families like the circus. They were adults and corporate businesses who had money at their disposal for the spectacular entertainment. Circus de Soleil had found an audience that would pay high prices to see the magnificent shows the produced.
As circuses around the world were closing their doors Cirque du Soleil grew and grew. Cirque du Soleil is still growing, drawing its creativity from the spectators it serves around the world.
What is the concept of blue ocean strategy?
Blue ocean is a concept used to talk about a market where there is no competition. You are swimming in blue water. When your business is in a blue ocean you have so much more potential, with less competition and generally higher profit margins.
What are the components of the blue ocean strategy?
Uncontested market; A blue ocean business operates in an uncontested market space. The market space is not in existence but created and evolves during creation.
New market place; With the blue ocean strategy you create a new market place by identifying and understanding potential services or products for your ideal customer.
The competition is irrelevant; Unlike a red ocean strategy, the competition is irrelevant as the business establishes the rules as the business develops. A red ocean strategy is a competitive one. It is when you create competition between businesses, rather than create your own space.
You set the standards; With a blue ocean strategy, you capture, create and design a new business model setting the standards as you develop.
The difference between blue and red ocean strategies.
When you are working in a blue ocean there is no competition, unlike the red ocean strategy in which you compete in an existing market space.
In a red ocean, you are often competing with the aim to beat the competition by lowering prices, undercharging for services and produces.
Why blue ocean strategy is important?
The objective of creating a business using the blue ocean strategy is to develop new uncontested markets, versus creating competition in overdeveloped markets. A business in a blue ocean has fewer risks and a higher profit margin.
Providing services or products using a blue ocean business model means you have identified the value you can bring to your clients without devaluing the services or products served.
How to integrate to a uncontested market strategy into your business?
Naturally finding the blue ocean in which to create and develop your business requires some planning, working, and redesigning.
- Take time to think about your current business model and how you bring value to your clients. Analyse what works and what does not work.
- Deep dive into what your clients like and don’t like. The ideal customer workbook has questions that can assist you with uncovering hidden pain points your client may have.
- Map out ideas and solutions by expanding and developing new ways to service your clients in an uncontested market.
- Choose one of the ‘blue ocean’ solutions you have thought of; test it, finalize and launch the service or product into the market.
Using the blue ocean strategy to build your business requires pushing the boundaries of a focused area of your business. As your business expands into a ‘blue ocean’, you reach new clients thus expanding the market space in your business.
Examples of successful blue ocean strategies.
Amazon. The founder of Amazon Jeff Bezo set a goal to create the world’s largest online bookstore.
“The common question that gets asked in business is, ‘why?’ That’s a good question, but an equally valid question is, ‘why not?”– Jeff Bezo
Ebay. A good example of creating a blue ocean market from an overcrowded red market is eBay. Ebay became the world’s largest online marketplace by selling advertising space to people who previously advertised the items they wanted to sell free in newspapers.
Apple. Apple is a company that has created many blue ocean markets. One of the biggest blue oceans strategies was the developing of iTunes and providing ‘music in your pocket’ on the iPod and later iPhone.
Although all the businesses mentioned are a large business today, they were small businesses. Their founders all found opportunities to differentiate themselves in their chosen market space. Your goal may not be to grow as big as the example businesses. However, as a small business owner understanding who you would like to serve is a great way to start designing your blue ocean strategy.