In today’s business world, competition is a big concern for nearly every corporation. The competition on the market is getting stronger and more difficult to overcome, in many situations corporations terminate their products, production, or their services, just because it is impossible to continue; the cost is too high to focus on gathering development projects in marketing, production, market research, and product innovation, to fight against the competitors. The kind of competition market described previously is an example of a Red Ocean Strategy. The market is oversaturated with companies and, basically, the organizations are cannibalizing each other for a market place with same consumers, for just little margins of profit. Examples of Red Ocean corporations are corporate giants such as Walmart, Target, Coca Cola and so on. These are the companies that compete to keep up in the market place, always beating the competitors with similar products. They manipulate existing demand and they align their business with its strategic choice of differentiation or low cost. Basically, it’s a struggle to float in the red water, where a shark can devour you at any moment.
The Blue Ocean strategy version is more pleasant and calm. Imagine the blue ocean of the Pacific close by the French Polynesia, where the waters are blue, clear and have no vicious sharks to eat you. That’s where you want to swim alone, and enjoy the waters and the nature. In this version, the business has an unmarked market spaces so it creates a new demand; consequently, the competition do not matter. This strategy has an opportunity to have a big growth and high profits. The Blue Ocean Strategy is like a unique business, a blue fish, in the picture below, offering a product or service that has particular characteristics different from all the rest of the businesses existing in the market, like the red fishes. Everyone goes in one direction but the Blue Ocean takes its own free direction.
An example of Blue Ocean Strategy business would be “Le Cirque du Soleil.” At some point of our life we did went to see the circus. The circus’ performances were very popular for many centuries. This is an old concept – a group of artists and acrobats who travel the world with a tent, and with a diversity of wild animals to perform a spectacular show. The primary target was the children. Today, this concept is obsolete, although still exist in Europe. According The Wall Street Journal” … Cirque du Soleil, the Canadian company that redefined the dynamics of a declining circus industry in the 1980s. Under conventional strategy analysis, the circus industry was a loser. Star performers had “supplier power” over the company. Alternative forms of entertainment, from sporting events to home entertainment systems, were relatively inexpensive and on the rise. Moreover, animal rights groups were putting increased pressure on circuses for their treatment of animals.” (Murray, 2014)
A new era was created transforming the concept of what is a circus today. As the Wall Street Journal described, “Cirque du Soleil eliminated the animals and reduced the importance of individual stars. It created a new form of entertainment that combined dance, music and athletic skill to appeal to an upscale adult audience that had abandoned the traditional circus. (Murray, 2014) This new revolutionary strategy took an obsolete business, which was at risk of disappearing, to a new perception for a new audience. In this case there is no other similar idea which makes this business unique with no competition and with the possibility to grow and thrive. Another business similar is the Teatro Zinzanni: an event half-circus and half-dinner, located in a modern and cozy tent in Seattle, Washington, and San Francisco, California.
During the 5-course dinner a show is staged with illusionists, tap dances, acrobats, musicians and cabaret artist performing. This is another way to have a fun and vibrating dinner, instead of a regular five star restaurant that is a little bit out of fashion. In conclusion, we have two kinds of markets – the Red Ocean and the Blue Ocean. Today a majority of the corporations and businesses are a Red Ocean. The Blue Ocean is the future of the world industry which opens a wide field of innovative opportunities to create new products and services. Blue Ocean strategy will offer systematic and reproducible methodologies and be open to new advances, and always update the technology.
Blue Ocean. (2014). Retrieved from www.investopedia.com: http://www.investopedia.com/terms/b/blue_ocean.asp Halligan, B. (2006, September 15). Inbound Marketing. Retrieved from blog.hubspot.com: http://blog.hubspot.com/blog/tabid/6307/bid/54/Blue-Ocean-Strategy-A-Small-Business-Case-Study.aspx Murray, A. (2014). Wall Street Journal. Retrieved from guides.wsj.management: http://guides.wsj.com/management/strategy/what-is-blue-ocean-strategy/ Zinzanni, T. (2014). Retrieved from teatrozinzanni/sf: http://zinzanni.com/sf/