Strategies for Market Domination in 2024 (Part 2)

Increased competition for the consumer dollar is more prevalent than ever. As a result, robust sales and revenue plans need to be developed by sales teams to deliver profitable growth year over year. BSM Partners introduced the Blue Ocean Strategy to our clients as an alternative to the traditional sales and revenue ideology.

Blue Ocean Strategy

What is the Blue Ocean Strategy? First introduced by W. Chan Kim and Renee Mauborgne in their book, "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant,"¹ the pursuit of new markets, with little to no competition, driving new demand and increasing value to your consumers. However, a Red Ocean is where competition is rampant and overcrowded, and products and services are the same, often seeking to compete in the same intense marketplace, leading to less profit and growth.¹  

Its foundation is based on the view that market boundaries and industry structures are not a fact and can be reconstructed by the actions and beliefs of industry players. This contrasts with a "Red Ocean Strategy,"² where companies compete in the same marketplace, work to beat the competition, exploit existing consumer demand, make the value cost tradeoff, and align the firm’s strategic choice of differentiation or low cost.²

How Is a Blue Ocean Strategy Developed?

1. One must understand that true, value innovation is derived from cost savings, which is made by eliminating and reducing the factors an industry competes on.
   
   The following Four Action Framework is used to reconstruct buyer value elements in crafting a new value, break the trade-off between differentiation and low cost, and challenge an industry’s strategic logic.^1,2
   
   • Which of the factors that the industry takes for granted should be eliminated?
   • Which factors should be reduced well below the industry’s standard?
   • Which factors should be raised well above the industry’s standard?
   • Which factors should be created that the industry has never offered?
     
     
2. Develop a strategy canvas and understand it will serve two purposes:
   • To capture the current state of play in the known market space, which allows users to see the factors that the industry competes on and where the competition currently invests.
   • To inspire users by reorienting focus from competitors to alternatives and from customers to noncustomers of the industry.
     
     
3. Reconstruct your market boundaries: The following six paths framework enables you to successfully identify the vast possibilities in "Blue Oceans" by reconstructing market boundaries. These paths challenge the assumptions that keep companies trapped in competing in red oceans.
   • Look at alternative industries
   • Look at strategic groups within the industry
   • Redefine the industry "buyer groups"
   • Look at complementary product and service offerings
   • Rethink the functional-emotional orientation of the industry
   • Identify participants in shaping the external trends over time
     
     
4. The need to identify (three) non-tier customers not participating in your market that could be converted to your market.
   
   • The first tier of noncustomers is closest to the current market, sitting just on the edge. Some buyers minimally purchase an industry’s offering out of necessity but are mentally noncustomers of the industry.
   • The second tier of noncustomers is people who refuse to use the industry’s offerings. The buyers see an industry’s offerings as an option to fulfill their needs but have voted against them.
   • The third tier of noncustomers is farthest from the market. Non-customers who have never thought of a particular market’s offerings as an option.²

The increased competition for the consumer dollar is more prevalent than ever. To succeed, companies must find ways to create new markets and new customers and deliver true value innovation. Trying to compete in existing markets and taking industry boundaries as a fact will confine a company to the bloodied waters of a Red Ocean: less profitable and ultimately less prevalent. If this has piqued your interest, for more information on Blue Ocean or a quick reference, Blue Ocean Classics³ can be quite helpful.

Are you a Red Ocean strategist or a Blue Ocean strategist? Find out in Strategies for Market Domination in 2024 (Part 1) here.

References

1. Blue Ocean Strategy- How to Create Uncontested Market Space and make the competition Irrelevant, by W. Chan Kim and Renee Mauborgne
2. Blue Ocean Shift- Beyond competing, Proven Steps to Inspire Confidence and Seize New Growth, by W. Chan Kim and Renee Mauborgne
3. Blue Ocean Classics by W. Chan Kim and Renee Mauborgne

 

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About the Author

Eric Rittenhouse works at BSM Partners as Business Development Manager. His areas of expertise include business development, sales and trade marketing while helping brand companies uncover and execute on opportunities to strategically dominate their niche in the consumer product space. He has completed the Blue Ocean Practical Introductionä certificate by the Blue Ocean Academyâ and is Action Selling Master Certified by Action Sellingâ and The Sales Board.