Competing in overcrowded industries is not a good way to sustain high performance. Real opportunity is to create a "Blue Ocean" of the market that are not competitors.
Main Idea
The most effective way to make a profit? Was stopped for competition in a crowded industry. In the sense of "Red Ocean" companies are trying to bring down a competitor to get a piece of a market demand.
How to avoid market saturation-Kim and Mauborgne recommend to create a "blue ocean" a market condition in which there is no competition there is no relationship of competition among firms. In the concept of "Ocean blue" thing needed is to create and capture a market demand that is completely new. Then offer more value than products / services along with lower production costs. The result? Profit, rapid growth, and trademark (brand) lasting consumer minds.
Practical Ideas
Understanding the way of thinking of the "Blue Ocean"
• It's not about technology innovation
"Blue Ocean" is sometimes the result of technological innovation. Often goes by the existing technological innovation can create it-and the creator of "Blue Ocean" combines the value added to the wishes of the buyer.
• No need for a business process that is completely new to create "Blue Ocean"
Most of the "Blue Ocean" is created from the core business and existing markets, namely "Red Ocean". Business owners often create a "Blue Ocean" in their core business
Implementation of the strategy "blue Ocean" is:
• Never use the competition to Comparison / compare
Conversely, do not make a competition by creating a leap in value of a product / service for producers and consumers.
• Reduce the amount of expenditure on production costs but at the same time offering value products / services to consumers.
More value can lure potential consumers and to benefit (profit) by reducing production costs. Creating new market space and no rival.
Business conditions in general consists of two markets, namely the "red and blue Ocean". "Red Ocean" is a description of the existing industry today-the known market space with. In the "Red Ocean", the industry is clearly defined and accepted by the existing rules. Here, an attempt to bring down a rival company / business competitors to get a piece of the market share with respect to the increasingly overcrowded prospect of gain (profit) and the growth of a downward trend. Products turned into a commodity trade and the increasing competition / competition can change the market is becoming increasingly tight.
"Blue Ocean" shows the industry that there is no current market space areas that are not well known, not tainted by the competition. Inside was a demand is created rather than to achieve or strive for. There are many opportunities wide enough for the growth / development in order to generate quick profits. There are two ways to create a "Blue Ocean", in some cases by creating some of the industry are really new. But most many created from an existing industry is currently coming from the "Red Ocean".
Obviously with the development of business direction changing in every decade as the development of technology, strategy "Blue Ocean" became an engine for growth and development. A prospect to create market space.
Instead the strategy of "red Ocean" began to recede slowly. The development of technology also plays an important role in the productivity of the industry, causing suppliers to produce goods that are easy to imitate and no clear direction and pelayanannnya. This situation can not be avoided due to accelerated by making the products and services into a commodity trade, war between stock prices and margins decline kenuntungan.
An American study, that many companies that produce goods and services produced products and services are almost the same and similar to the competitors. So many people buy stuff considering the price compared with the product or service. In the industry, a very dense, differentiation / specialization of certain goods and services to be very difficult because most of the products and services of the same. Most companies are unfortunately more likely to implement the strategy of "red Ocean", a study suggests that of the 108 companies, 86% are adherents of the strategy and the remaining 14% is aimed at creating a new market in accordance with the strategy of "Blue Ocean".
But why do so many companies still choose the strategy of "red ocean"? This is because many companies have adopted system inside the system "military" is CEO / Head of the company as a "general" decision makers / policy, while the "army" is at the forefront of the company. Further explained the strategy aims to confront directly the opposite of the companies (competitors) and as soon as possible to knock the opponent / competitor of the map business competition.
While "Blue Ocean" strategy instead of conducting a business to avoid competition by creating a new market. On creating a new opportunity, compared to seize opportunities that already exist.
The tendency of a company to focus on winning the competition in global markets led to the emergence of a strategy of "red Ocean", making a competition as a benchmark for the success of a company. A competition is also important of course, but if you focus only on the ability to compete, all forgetting that the core of a business is to create a new market
"Blue Ocean" strategy is not just about technology innovation, sometimes the most advanced technology is part of the creation of a strategy of "Blue Ocean" is. Existing technologies can create this strategy. The most important result of this strategy is to create / build a brand (Brands) that can last a long time. Funds for R & D (research) does not guarantee the birth of a new market opportunity, the most important are the steps a company that found a way to create a "Blue Ocean" as often as possible. To obtain ongoing benefits obtained. The creation of this strategy may be the result of product strategy and product management actions.
Characteristics of a "Blue Ocean" is not to use competition / rivalry as a benchmark (benchmark). Instead by using strategies away from the competition to create products and services that pick value, both in terms of the company's customers and so can not be rivaled or duplicated. The study further stated that the company is really successful in implementing this strategy is by way of differentiation and reduction of production costs.