Strategy — map it out yourself

Blue Ocean Strategy Fallacy

You don’t need to find a “blue ocean” to become successful

Would you like to find a zone of the low competition in your market? Do you want to outcompete others by creating a unique game-changing product that cannot be copied?

Most likely, you won’t be able to do that.

A blue dream

If I had gotten a dollar every time I heard “we need a blue ocean strategy,” I would have been a wealthy person now.

The book Blue Ocean Strategy was published in 2004. It has been translated into 43 languages and has sold over 3.5 million copies. The Wall Street Journal, BusinessWeek, and Amazon.com named it a bestseller. Forbes called it one of the ten business trends for 2013 and argued that “blue ocean strategies are more influential than ever.”

If you are not among those 3,5 million people who read the book, the idea behind it is pretty straightforward.

Most markets are so-called “red oceans.” The red color symbolizes blood. The authors chose this metaphor to describe the highly competitive environment. Companies fight for every customer, for every dollar, and blood is everywhere.

If you dive into the red ocean — be prepared for an uphill battle. And your odds of winning are low.

But you can avoid fierce fighting by creating a “blue ocean.” You can try to come up with a product or business model — a solution that won’t compete with other offerings on the market directly. It can be a new way to solve an old task.

One of the most famous examples from the book is Cirque du Soleil, a mixture of circus, opera, and ballet. The Canadian company created a new market space and thrived.

The idea is neither brand new nor wrong. Of course, it’s nice to enjoy the situation when your rivals envy you and kick themselves while you’re earning millions. But trying to create a “blue ocean” can distract you from your core task.

Don’t dwell on competition

Did Jeff Bezos create a new market by launching Amazon? Even if the store swam in the blue ocean, it didn’t last long. Many startups rushed to the market, lured by new opportunities. The dot-com crash that began in March 2000 cooled down the euphoria, but three years later, nobody remembered about it. Amazon is still a market leader, but today e-commerce is certainly a red ocean — there are 9.1 million online retailers in the world, and 2.5 million of them are in the United States.

But when online retail became a red ocean, Bezos didn’t rush to change Amazon’s business model to discover a new “desert island." He continued building his empire, brick by brick.

Even if you happen to find a blue ocean, you won’t enjoy it for long. Cirque du Soleil is a unique example. They managed to occupy a niche and surrounded it with what economists call “a moat.” You’ll need a lot of time and investments to build Cirque du Soleil — 2 (which I wouldn’t recommend).

But another case from the book, Yellow Tale, the Australian wine, didn’t become a must-have for dinners worldwide. You can find these bottles with a yellow kangaroo on the label in a supermarket. But it’ll take you some effort to spot them among other bottles.

There is nothing wrong with looking for empty market niches. But this type of thinking biases your strategic reasoning. Forget about competition — focus on your customers.

The customer is the king

Jeff Bezos has given many interviews. In most of them, he repeated his mantra about customer centricity — he calls it “customer obsession.” You can find one of the examples here. And he underscores that customers are more important than competitors.

After all, customers pay your bills, not rivals.

You’ll pave the road to your competitors even if you discover your blue ocean. I had such an experience in my life. Twelve years ago, my team and I created a local “blue ocean” in the country I worked then. We triumphantly launched this product to the market but made a mistake. It was not completely ready, and my ego was the reason why we didn’t refine it.

But our customers were not the only ones who saw the product. So did our rivals. And by the time our version was ready to sell, dozens of copies appeared.

You’ll always have competitors. It is a part of the game. And the only way to win the competition is to understand and treat your customers better than others do.

If you want to learn more about identifying customer needs, read my article here.

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