Marketing Unraveled: in this series we break down modern marketing strategies and techniques through examples so that you can elevate your efforts.
Let’s talk about Nintendo Wii. How many of us were in awe of it when it launched in 2006? The innovative gaming console was pitted against state-of-the-art PlayStation and Xbox 360 and yet won over market share for its ease of use, accessibility, and affordability. With the heart of its concept lying in value innovation, the Wii did away with the DVD functionality that comes with every other gaming console and introduced a wireless gaming stick differentiating itself from the market offering. Nintendo launched the Nintendo Wii as well as the Nintendo DS keeping in mind the Blue Ocean strategy by pursuing value innovation when it was losing market share to its larger competitors prevailed. In the end, the Wii beat its competitors, opened a market of its own with its new features and affordable price point, and regained its lost market share and holding the greatest lifetime market share (41%) out of the three major video game consoles. So, how can you make your competition irrelevant? The Blue Ocean strategy will be a step towards getting the answer.
Over a decade ago, the ‘Blue Ocean Strategy’ took the world by storm and still holds value today. Developed by W. Chan Kim and Renee Mauborgneby, pre-eminent management thinkers from INSEAD. The professors together conducted a decade-long study of 150 strategic moves spanning 30 industries over 100 years. Through their book and their teachings, the professors give you ways on how you can crush your competition by creating an entirely new territory with your business practices. The strategy can be applied to various sectors and stay relevant to various businesses. The Blue Ocean strategy challenges everything you know about strategic success and gives you a systematic approach to making competition irrelevant.“Our study shows that blue ocean strategy is particularly needed when supply exceeds demand in a market. This situation is applying to more and more industries today and will be even more prevalent in the future.” Kim said in an article for Forbes.
So, according to this theory, you can say that the business world is divided into two kinds of markets — the red ocean and the blue ocean. The red ocean consists of current industries, competition, and boundaries, where the rules are well-defined and competitors strive to gain market share of the existing demand between the rivals. As this market gets crowded, the prospect of profit reduces or nullifies. Blue oceans come into the second side of the market, aiming to make competition relevant by tapping into a completely new market space and tapping into that demand. Companies aiming for the blue ocean tap into value innovation in their approach so that they can benchmark the competition. This may bring about imitators, but solves the issue at hand. With the blue ocean approach, organizations don’t focus on beating the competition but adding value to the buyer and thus, opening up an uncontested market space.
So, how do you start out on building your strategy? This 6 path formulation plan will trudge you in the journey ahead. Let’s get you started.
So, whether you’re starting off a blog for your business or planning on take down another PlayStation of its kind, applying the methodologies of the Blue Ocean strategy can change the way your business works and lead your brand into the sunset. Just watch out for the sharks along the way…
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