The bloody puddles full of businesses
The blue ocean strategy is a book about how businesses should find their way out of red oceans in order to make new and probably even more profitable markets. A blue ocean is referred in the book as a market space with no or few competition or rivalry. A red ocean on the other hand is a bloody battle ground where businesses compete against others and have similar products and share same customers on the market.
The book includes numerous examples of companies that have made it to the blue ocean. They may have started with a product or service in the red ocean, or then they have invented something that is entirely different and created a new market and customer base. In most cases, the companies have studied the market and reasons why customers buy something or not and have discovered patterns or opportunities to create something different. The book has many great examples but I’m going to tell you the one I find most important and educative. The example is from the aviation industry. Usually, when big businesses or wealthy ones have to travel, they either travel business class or then they have a private jet. NetJets, the company that discovered an opportunity for a blue ocean business, studied the aviation market industry and saw an opportunity. NetJet offers businesses the possibility to buy a “share” of a private jet. This way the business that has bought a share, can travel for 50 hours in a year with the jet where ever they want to. According to Netjets, this is way more profitable for the business than it would if they bought a plane of their own. This is just one example of a business that saw an opportunity and created a new market. [yellow tail] is another good example, but I’m going to leave it for you to read it from the book.
In my mind, it is very important to try and create an uncontested market space. Especially, if the supply is already surplus in that specific market industry. If the demand is higher than the supply, I don’t see it that important to seek for a solution to get away from the “bloody” read ocean. On the other hand, if it is possible, I think it will always be more profitable to be in a so-called monopoly position.
For example the Keep them away – webcam covers. I think this is a good example of a project that has kind of already used the blue ocean strategy, as there isn’t that much supply of those here in Finland. Even though the market is pretty much uncontested, I haven’t sold even half of the webcam covers yet. It might be because of the poor marketing though. Or then it might be that customers are not interested in the product. That is why one of the most important things in the book was that even if you got to an uncontested market, your product has to be interesting and there has to be demand for the product. If there isn’t, you won’t be doing any better than a company fighting in a red ocean.