Mauborgne and Kim propose the following four questions:
- Which factors should be raised well above industry standard?
- Which factors should be created that the industry has never offered?
- Which factors should be reduced well below the industry standard?
- Which factors that the industry has long competed on should be eliminated?
A simple way to think of this is, what should we start doing, stop doing, keep doing, do more of, and do less of, as captured below.
Rather than look to compete head-on on factors such as storage, surround sound, DVD, internet connectivity and processor speed, it changed the factors it was competing on, and with it, captured new markets.
The Nintendo Wii wasn’t about mind-blowing graphics, but at its core, it was about simple family fun that anyone could play, and that helped to unlock a new market – mums.
The Wii didn’t just make gaming more accessible or compelling to new customer segments, but it did so by competing on factors like motion controls which were key to activating new markets. The motion control nature of many of Wii’s games made it easy for anybody to pick up a controller and start boxing, playing tennis or race cows!
Using Blue Ocean Strategy to differentiate your business
To help identify blue ocean opportunities in your business, first reflect on what the factors of competition are in your industry, and then answer the four above-mentioned questions to determine how you can be different.
There are numerous factors you can differentiate yourself by, and a handy starting point to help you determine what levers you can pull is Doblin’s 10 Types of Innovation, below.
Perhaps it’s your price point, your cost structure, superior customer service, the distribution channel you use to reach customers or a really hip brand.
You can go beyond these ten areas to look at your customer segments as well — who specifically are you targeting?
What sales techniques are you using? Are you leveraging artificial intelligence or account-based-marketing to give you an edge over cold-calling competitors?
How can your value proposition be different? For example, rather than being just another personal trainer in a crowded PT marketplace, maybe you instead choose to focus on mobility training for 40+ year olds? Now you’ve got a niche that isn’t anywhere near as contested as trainers whose core value proposition is to help you lose weight and stay lean.
Or perhaps you develop a superior process for getting stuff done, which gives you all sorts of advantages. For example, NoFilter media’s business is built on several key pillars – automation, outsourcing, crowdsourcing and 80/20 thinking. As a result, the company is able to generate thousands of pieces of content at a fraction of the cost of a typical media company. This gives NoFilter an advantage when it comes to selling ads at a discount to market rates without compromising a healthy margin.
This is particularly important in a post-COVID19 world, where the advertising market is somewhat distressed, and has resulted in bloodbaths at numerous media outlets.
SpaceX actually did something similar. What Elon Musk found as he was building his rockets was that the price of component parts was exorbitantly high. But rather than take this on face value, he asked a question nobody else had. “What if we manufacture the parts ourselves?” As a result, he was able to bring the price of numerous components parts down by more than an order of magnitude, and lower the barriers to space by about 45x.
When NASA’s space shuttle was in operation, it cost US$1.5 billion per 27,500 kilo payload. Today, SpaceX’s Falcon 9 rocket can lift 63,800 kilograms and get it to orbit for just US$90 million.
At Collective Campus, we used content — blogs, podcasts, videos, books and ebooks, webinars — to differentiate ourselves from competitors in the consulting space, and as a result, our boutique firm now generates about 500 inbound downloads and leads a month.
No matter how saturated your market appears to be, today’s world is a fast-changing one, and if you look for opportunities to differentiate yourself, capture existing market share and unlock new markets, you’ll likely find them.
But as with everything in business and in life, success rests on both execution and luck.