Before moving further, one must know what Blue Ocean
Strategy and what Red Ocean is?
RED OCEAN STRATEGY:
To come in competition with others, making alike or similar product and
share profit and loss or reducing the Market share of others through sharing or
direct competition. Eg. Olper’s Olfrute & Nestle Fruita Vitals. It’s the
known Market Space, where boundaries are defined & accepted, and after
sometime the competition becomes even harder due to new entrants. That’s why it
is termed as Red Ocean as the ocean turns red due to overwhelming competition.
BLUE OCEAN STRATEGY:
It’s the new created market space, unknown, untapped and undiscovered.
In Blue Oceans, demand is created not fought over and growth is profitable and
rapid. The term blue oceans are NEW but it has always been with us. What
industries were unknown 100 years ago?
The term blue oceans is NEW but it has always been with us
What industries were unknown 100 years ago?
- Automobiles
- Music recording
- Aviation
- Petrochemicals
- Pharmaceuticals
- Management Consulting
So it would be true to say that first the Ocean seems blue and as the
time passes it turns red due to super saturated competition.
What should be done?
- Before making the big idea, companies must research about the untapped market space.
- Be unique, talk different sell different.
- Create opportunities.
- Focus on benefits rather than features.
- Go for the considerable stretch in product or service after a period of time, since launch. E.g. Product line, variants.
In today’s world with special reference to Pakistan, a marketer should
be very vigilant, before investing he must anticipate the flaws hitting
back. People are very rational, and because
of the so many options available for a single product or service, it really has
to be very catchy, different to attract such intellectuals. Every new entrant
comes to make profit, without profit, existence of the company go on stake. If
it is a Giant, it can resist the pressure and revise the mistakes did
previously to make the business profitable again. But for the small emerging
companies, these things turn out to be very critical and conclusion, shutdown!
By saving the research cost in the beginning, it is not worthy to put the
entire business on chance.
The articles is interesting and it all matters for a company to do proper research for a market before entering it, competitive analysis, develop a marketing strategy and come up with something different to create a new demand instead of a me too product. The company should focus on being the market leader than a market follower. Classic example is Apple, it introduced iPODs, later its replica's were initiated. Apple created demand for iPod and came up with other products such as iPads, Apple cell phones, laptops etc. focusing on the benefits for customers. That is how it became so popular for people that in US, citizens started waiting for hours outside Apple outlet at the launch of its new product and that is called I would say purely a Blue Ocean Startegy..
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThanks Mariam for the comments, yes Apple could be the one and Android technology also fall in the same category.Marketer should take risk, become trend setter than trend follower and risk should be precalculated and moderate one.
ReplyDeleteReferring to the blue ocean strategy, what you need to know best is your game plan i.e. the business plan, which is the idea, the product or service, and the target market. For a brand new idea, a brand new product or a brand new service concept, you need research. And research is the most neglected part if you talk about Pakistani market. Companies have now realized the importance of market research and the wonders of understanding their consumer's behaviour. But effective and result oriented research process need time, funds, and resources. Considering the market structure of Pakistan, only MNCs or well established national companies can actually afford to manage an effective research department, and for the new comers and small companies, let them flow with the trend because the amount of profit they need to acquire is achievable without operating effective research divisions.
ReplyDeleteShakeb, even small companies need to research before getting in the flow or creating one. I think they require more research and risk anticipation than the large companies. As i said earlier that large companies can change their failure into success due to heavy cash flows, where as small companies cannot regrow themselves due to limited funds resources.Yes research can go costly for such companies but not as costly as the loss they will bear at the end in the name of failure. Even small companies can become the trend setters, after all its the idea that sells!
ReplyDeletethis is a very interesting topic as at the end it becomes a cycle...some companies comes directly in red ocean, others come in blue ocean and then it either turns red or completely wipes out the red...just like in the case of an alternative like laptops...that has wiped out PCs...smart phones have wiped out regular phones..and now the land lines...VCRs and TVs have been wiped out by DVDs and LEDs...i believe now the game has changed...one good move can wipe out an entire industry overnight and that is were the research needs to go into...industries needs to develop themselves to be able to either sustain the change or bring the change with the market or before!...if they do not run with the world, they will leave behind and will become a dumpyard...i believe this is exactly whats happening to Pakistan. it is a dumpyard for the rest of the world as the politicians are killing the golden egg laying machine Vs multiplying it to earn more out of it... i hear a lot about how brilliant and clever Zardari is who is owning this country on his own..i think he has failed terribly as he couldv earned a lot more if he had done this robbery through sustainable systems like TAX collection, remittances, foreign investments, tourism, law and order (i.e. by penalizing/charging people who do not follow the law and we have a million fools who couldve made him a millionaire alone)...so i believe its time to look into the blue ocean strategy..specially for pakistan specially in sectors like energy or probably politics! :)
ReplyDelete