Reconstruct market strategy
Reconstructing market strategy is the first concept of the Blue ocean strategy to cut ties with completion and look into alternatives to create blue oceans. In the quest of expanding their product base many organizations struggle with finding strategies to outdo their competitors (Kim and Mauborgne, 2014). This principle offers an alternative way of evaluating existing possibilities that will open to other compelling blue ocean opportunities. Viewpoint to remake market boundaries are guided by six paths that cut across the industry sector as their applications are general leading companies to commercially viable blue ocean ideas. Companies have remained trapped by the old assumptions they use to build their strategies on making them keep competing on the same market.
The first path is looking across alternative industries. Competition cuts across the spectrum from those within the same industry and those from industries producing alternatives. Most industries struggle with providing services and products serving the same competing for the same people to buy their products and services. However, looking at alternative ideas that fulfill the same objectives might provide opportunities to viable ideas. Markets are driven by groups of consumers. Most industries tend to serve a group of consumers overlooking the rest. Evaluating across strategic groups in industries might help in avoiding this trap by looking on which element influence customer’s choice to trade vertically from one group to another.
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Looking across the chain of buyers can open new ways of unlocking value. This is achievable by defining who can and who should be the target buyer and redesigning the value curve to address these buyers. Most industries tend to stay within the provision of their products and services. However, there is a margin left for complimentary services that is not addressed. Industry players do not look at the whole solution that consumers look for in a product when buying it. Examining across emotional and functional interest to consumers affect their decisions on the products to buy. Commodities that are emotional oriented tend to be more emotional oriented while those functionally oriented tend to be more functionally oriented. Infusing both functional and emotional aspects to products will add new life and can stimulate high demand. Defying the conventional boundaries of competition by looking across them can lead to new opportunities away from the normal business environments.
Focus on the big picture, not numbers.
Most companies deliberate planning are prioritized on the numbers rather than future trend of the business environment (Aggarwal and Zhao, 2018). They end up being stuck on the red ocean strategies and miss on new opportunities to grow their businesses. Concentrating on the big picture viewpoint is the second concept of blue ocean strategies. It emphasizes on having a clear plan of the business trajectory as well as the product demography on a document to avoid investing a lot on planning and delivering only tactical red ocean moves. This approach produces a variety of strategies unlocking new opportunities that had not been perceived earlier. It also exposes creativity of a wide range within the people of the organization.
Drawing a strategic canvas helps in identifying different company profile that include calculated profile of an industry, calculated profile of current and potential competitors and company’s calculated profile. Each profile helps in identifying various sets of business needs to be exploited to achieve the goals set in the strategic canvas. This approach also relies on the first principle by using the six paths to help in exploring the various business environments and identifying market spaces that are less explored by other competitors. The principle also recommends interacting with consumers to get firsthand information on what lacks on the products currently in the market and suggestions on how to improve or provide alternative and better products and services. With that information it is easy to support moves that address the issues actualizing a new strategy.
Reach beyond existing demand
Strategies employed by companies to grow their customer base tend to compete for the same share of the existing customers (Tiwary and Bakshiram, 2017). This may lead to companies having to address smaller subgroups of customers to maintain their influence in the market environment. The third concept of blue ocean strategies emphasizes on advancing beyond the prevailing demands by addressing non-participants of the market environment and in this case they are the non-customers. Seeking on the same interest that customer’s value allows companies reach beyond existing demand which will lead to acquiring more customers (Slater and Demangeot, 2018). However, before companies embark on the quest to bring on board noncustomers they need to understand how the world of non-customers works. It consists of three levels namely the first tier, second tier and the third tier. The first level represents the soon-to-be customers, second level represents refusing customer while the third level represents unexplored customers.
When a market is filled with so many soon-to-be customers its growth is stunted and thus a solution is needed and it is achievable by identifying what these non-customers are looking for. Soon-to-be customers shift their allegiance when they cannot find the products that suite their needs and can end up looking for alternative or leave the market entirely. Refusing non-customers represent a group of customers that can’t afford, don’t use the market offering or their necessities are ignored. Unexplored non-customers are thought to be participants of other markets or are not thought by the companies. Non-customers holds high potential of becoming customers and strategies have to be put in place to reach out to them and make them participants. Unlocking potential across the tiers is the key to tapping into this unexplored new mass of customers.
References
Aggarwal, P., & Zhao, M. (2015). Seeing the big picture: The effect of height on the level of construal. Journal of Marketing Research, 52(1), 120-133.
Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.
Slater, S., & Demangeot, C. (2018, June). Unravelling the Challenges and Opportunities of Social Innovation across Market Boundaries through Images of Dress: An Abstract. In Academy of Marketing Science World Marketing Congress (pp. 115-115). Springer, Cham.
Tiwary, A., Bakshiram, S., & Bhatt, S. (2017). U.S. Patent Application No. 15/386,112.
