Thursday, March 26, 2015

ideas: Blue Ocean Strategy

podcast interview: Blue Ocean Strategy and Red Ocean Traps @ HBR IdeaCast
"Blue Ocean Strategy" argues that cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Based on a study of 150 strategic moves (spanning more than 100 years across 30 industries), the authors argue that lasting success comes not from battling competitors but from creating "blue oceans"--untapped new market spaces ripe for growth.

The same idea is promoted in the book "Zero to One"

Red Ocean Traps - HBR
"The payoffs of market creation are huge. Just compare the experiences of Apple and Microsoft. Over the past 15 years, Apple has made a series of successful market-creating moves, introducing the iPod, iTunes, the iPhone, the App Store, and the iPad. From the launch of the iPod in 2001 to the end of its 2014 fiscal year, Apple’s market cap surged more than 75-fold as its sales and profits exploded. "

"Technological breakthroughs don’t necessarily create new markets. Segway was a marvel but never found a wide customer base. New markets arise from value innovation, not tech innovation."

"...uncovering a niche in an existing space is not the same thing as identifying a new market space."

"... how to break free of ... red ocean traps:
  • focus on attracting new customers, not pleasing current customers
  • worry less about segmentation and more about what different segments have in common
  • understand that market creation is not synonymous with either technological innovation or creative destruction
  • stop focusing on premium versus low-cost strategies"