Have you ever asked yourself where you and your project reside in the entrepreneurship market? Does this place suit you? Perhaps the years you spend trying to grow your project and exerting your utmost effort and expertise, but you don’t know why your startup isn’t achieving its desired goals. Maybe you’re dwelling in the Red Ocean without realizing it, and your only problem is this.
In the entrepreneurship market, you are in a tumultuous environment, either an easy catch or a whale reaping successive profits. To embody the role that will raise the stakes of your project towards growth and expansion, you must know well which type of environment you inhabit. This way, you can find the fertile environment for your efforts to translate into successes and increasing profits.
The Red Ocean vs. the Blue Ocean
These terms emerged in the field of entrepreneurship in 2004 when W. Chan Kim and Renée Mauborgne introduced their theory, which sparked significant controversy. This theory revealed companies’ positions in the market precisely, positions that the companies themselves were not aware of.
The simple question was: Do you want your company to be in a market crowded with competitors, where fierce competition dominates and companies bleed to maintain their position? Or do you want to create your own arena where you control the course of competition?
This is the difference between the terms Red Ocean and Blue Ocean. The Red Ocean refers to the market with fierce competition, numerous competitors, and rapid demand. The Blue Ocean, on the other hand, is the calm space for creative projects and needs that have not yet been addressed. It is the fertile land that few have trodden before you, where you have unlimited potential and opportunities for growth and success.”
The difference between the Red Ocean and the Blue Ocean in the business market | |
To understand the difference between the Red Ocean and the Blue Ocean in entrepreneurship more, here is a comparison that highlights the characteristics of each
While startups and existing companies in the Red Ocean are immersed in the never-ending competition to gain a share of the limited demand, they have fewer opportunities for growth and expansion. The rules of the game here are very limited despite the efforts to build a competitive advantage. For example, in the automobile market, this competitive environment requires continuous and strenuous efforts just to maintain a leading position, let alone achieve growth and expansion.
At this moment, inhabitants of the Blue Ocean, represented by startups, are moving towards unlimited growth opportunities and a unique level of demand rates through unconventional ideas that meet a consumer need and focus on value and customer attraction rather than intense competition rates in the Red Ocean. The startup company in the Blue Ocean has created a unique market that addresses a previously untargeted need of the consumer, delving into understanding the desires of the target customer, and translating this need into a necessity for the consumer in an atmosphere of uniqueness and distinction.
Read also: The Zero Customer: A New Challenge for Entrepreneurs.
How do you transition your company from the Red Ocean to the Blue Ocean?! If you have been in the Red Ocean since the beginning of your project or have already started your startup within the scope of this ocean, is it too late to move to the Blue Ocean? The answer depends on your vision for the future of your company in the entrepreneurial market. If you have the right perspective, a clear business plan, and the ability to gain the trust of your team and customers in your new direction, then no, it is not too late to move to the Blue Ocean of entrepreneurship.
The 6-step strategy for transitioning your company from the Red Ocean to the Blue Ocean.
There are 6 methodical steps to ensure your startup’s transition from the Red Ocean to the Blue Ocean, known as the Six Paths Framework. This framework helps your organization to break out of the traditional boundaries to join the world of entrepreneurship outside of competition.
1- Look around you.
Look for alternative industries, which are products that serve the same purpose and goal in other ways, and unconventional additional ideas. Do not assume the stagnation of your product or service; you can start integrating additional products and services in an innovative way to reach your unique value. For example, the entertainment industry has countless fields, and there are hundreds of ways to present it. There are also beverages containing probiotics that aid digestion, such as Lactel, which are not considered competitive or medical beverages. They have created a blue ocean for themselves, free from competitiveness.
2- Strategic groups are your way to deep understanding.
Dividing the market into strategic groups clarifies the value of each product and why people buy or refrain from buying it, which will certainly inspire you and also lead you to a deeper understanding of the needs of the target customer and thus your innovative idea that will differentiate your project.
3- Look for the thread to reach your correct customer.
Try to gather all the information about the targeted customer’s chain in your same industry. Know who buys from each of them? Do they target customers directly or influencers? Or are they traders? Your study of this chain can create a new blue environment for your services. For example, one insulin company stopped targeting doctors and began targeting patients with innovative methods that provide them with comfort and help them lead normal lives.
4- Follow the treasure of additional services.
In entrepreneurship, institutions, especially startups, sometimes are far from the context of using their products, and therefore cannot know the problems of the customer or the additional services that may create a destination for him. This destination is your company. Nothing can attract your customer more than additional services that make the service easier for him and make him feel that he has made a profitable deal.
5- Create bridges of empathy.
Many of us do not buy products or services for their functional value alone. There are many competitors who offer the same service or functional benefit. The product’s benefit and its functional effectiveness are important, of course, but there is another aspect to this currency. By discovering it, you can stand out with your own blue environment, which is empathy and emotional communication with the customer. It is a special mark that can make you a highly loyal customer and a special character in the business market. Several brands, such as McDonald’s, the maker of joy, Coca-Cola, the official sponsor of joy, and Ferrero Rocher, the symbol of luxury and affection, have all managed to create their own special mark in the business market.
6- Keep up with the times.
Observe the continuous changes around you in your business field and in the field of entrepreneurship in general. Do not stand still; try to develop an idea that is compatible with the continuous developments and the successive market needs. Respond to modern trends and adapt to development. This can inspire you and create boundaries of excellence for you, but on condition that your path is clear, deliberate, and your development is decisive without retreat.
Even if you inhabit the Blue Ocean from the beginning, you need this strategy because your blue environment may turn into a red one when others start imitating your idea and features. Therefore, you need to create new blue spaces for your project that ensure its leadership, growth, and profitability.
Always remember that it is not just classifications but your project’s position today is a compass for its future tomorrow. Be adventurous and look for broader horizons and do not settle in the Red Ocean.
References:
What Are Red And Blue Oceans?
Blue ocean vs. red ocean strategy.
