Blue Ocean Strategy To Uncover Hidden Opportunities in this COVID era.

Guest blog by Raji Vaidyanathan – HK Advisory

What is the Blue Ocean Strategy?

“Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by industry players’ actions and beliefs.”

It lays out a framework for creating a leap in value to customers by eliminating factors that contribute to cost but create little utility to customers while focusing on those relevant factors to your customers.

How will Blue Ocean Strategy uncover opportunities in this COVID era?

As there seems to be light at the end of the tunnel with the Covid-19 pandemic, many changes occur – supply chain restructuring, altered customer preferences, changing government regulations and more. Post pandemic organisation will face more competition as there will be an uneven match between demand & supply. The low demand is caused by a reduction in income, unemployment & external uncertainties.

“Still more, firms need to create blue oceans of new demand in order to generate revenue, profit and new growth.”

By exploring the questions below, you can see opportunities when before only constraints were visible.

1. Is the Industry condition set in stone, or could we adapt it in our favour?

The traditional way for executives to develop a strategy is to analyse the environment:

• Is the market share of the industry growing or diminishing?
• Is the competition high or not?

However, blue ocean strategists do not follow traditional organisational practices. The critical thing to remember is that organisations create the industry rules in the first place & hence there are no strict practices.

The pandemic will trigger more changes and disruptions & it is for the organisations themselves to choose whether they will be a victim or victor?.  A blue ocean perspective will help you become a better decision-maker, think more creatively & understand how to be profitable despite the external circumstance.

2. Do you try to beat the competition? Or do you make the competition irrelevant?

By competing with your competitors, you run into the danger of your strategy, looking just like your competitors.  A wise strategy is to make the competition irrelevant.

People’s working habits & lifestyles have changed a lot during the pandemic, and hence some of the products & services have become irrelevant.

• How does this change in customer behaviour affect your product or service in terms of what the customer needs?
• What aspect of the product or service do they still value & do not want to compromise?
• Are the changes in customer behaviour temporary or permanent so that you can reconfigure your product for the post-pandemic world?

Answer these questions to help you win over the mass buyers even with no competition. Your offer should be very compelling that you will WOW customers with it.

“Don’t look at what industries are competing on and start looking at what most buyers value “.

3. Do you want to create new demand or fight for existing market share?

Customer segmentation is quite the norm, and organisations monitor customer satisfaction scores through surveys & feedbacks.  This practice will lead to more refined customer segmentation to meet customer needs & will make you deep dive only on your existing customer base.  Whereas, there is a lost opportunity of a broader demand for your products that you could tap into by creating marketing strategies for your non-customers.

“In a time of depressed and shrinking demand in many sectors, wrestling for a bigger share of existing customers does not often lead to profitable growth. You need to expand the pie.”

Find creative ways to attract a mass of potential customers.

4. Can you pursue differentiation and low-cost concurrently or sacrifice one for the another?

“A blue ocean strategist doesn’t  sacrifice differentiation for low-cost or either way. If you wholeheartedly have a blue ocean mindset, you do both”

Blue Ocean strategist will create a mammoth leap in value by giving equal importance to what eliminate and reduce as to what to include & create.

Even though people face economics uncertainties and are frugal, they do not want to compromise on a product’s fundamental value and appeal.  Therefore only those product services that offer value & are low cost have the best chance of standing out and making a more comprehensive economic impact on market confidence and economic recovery.

I hope this helps to shift your perspective & seek new opportunities. IF you want to explore further how you can apply this strategy to your business, please contact me on my phone number 01619621150 or email me at [email protected].