30 Dec “Blue Ocean” Strategy and How it Can Bring Your Business to the Next Level
Have you ever noticed how virtually all businesses in the same industry tend to use the same strategies?
Then there will usually be one business that utilizes at least one strategy not used by the others. Have you noticed that they experience greater success as a result? That success can be in increased sales, greater profit, or a more productive team. This is the concept of a blue ocean strategy vs. strategy convergence within an industry.
The Difference Between Strategy Convergence & Blue Ocean Strategy
Strategy convergence is where all businesses use the same strategies to run their businesses and get the same results. When other businesses try something different, and get different results, (and often gain a competitive advantage), that is a Blue Ocean strategy. The name comes from how you “fish.” Most boats will stay close to shore, where there is less risk, but everyone is fighting for the same fish. With a Blue Ocean strategy you go out further from shore. You take on more risk but you can catch many more fish because you have an enormous ocean in which to fish without any other boats nearby.
Blue Ocean Strategy Examples
One example of Blue Ocean Strategy is in the mortgage industry. Everyone wants to build relationships with home buyers during the sales process so that they get more business from the home buyers. Repeat business from the buyers and referral business from their friends and family is a typical goal. However, after the sale, people remember their real estate agent, but not the other people involved in the purchase of their home. To overcome this problem, one mortgage company developed a package of information perceived as valuable to the home buyer, so that they would remember their mortgage company too. Then five years later when they were moving again, they would remember who helped them with their last mortgage, and how to contact them. Another mortgage company developed an innovative mail program for their customers to keep top of mind for their next move. It was unlike any other mortgage company’s mail program, and resonated with customers.
Years ago, two pharmaceutical companies promoting the same product was unheard of. In the 1980’s one pharmaceutical company hired the other to help them sell their big drug. As a result, Zantac became the biggest drug in the country and the company made lots of money (billions per year in the US, although the drug recently received some negative press). Today two competing companies joining forces is a strategy that is used by a number of drug companies, but back then it was a Blue Ocean strategy.
Borrowing from Other Industries
Working with people in various industries, we sometimes borrow something which is a standard marketing practice in one industry and use in another industry where it has not been used in the past. Sometimes, this turns into dramatic results.
Apple, Cirque du Soleil, Yellow Tail, and Netflix are all household brands that ventured out into uncrowded waters.
Recycling What Works
We have also used strategies which had been successfully used in the past, and then stopped although no one could remember why. What is interesting is that their competitors did the same thing – successfully used the strategy, then stopped.
It’s worth a sit-down with your marketing team (or yourself) to review what worked a couple of years back. Buck the current trends, go retro, and use what works for your business.
What’s NOT Working
The new year is the perfect time to look at your business and sales and marketing strategies. How are you reaching customers and are they responding. Review your methodologies and consider what you could differently. Are you happy with the results that come with being close to shore, or are you ready to try something different? What’s your Blue Ocean strategy?
ABOUT BOB KADEMIAN
Bob Kamemian, co-founder of ROI Business Advisors, has spent his career helping businesses become stronger, their teams become more effective, and their owners became better at running operations. Clients often move from barely surviving to thriving, many grow over 40% in the first year of working with ROI, and some became multi-million dollar companies.