Blue Ocean Strategy: Grow Your Business Without Having to Compete
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Crystal clear waters, beautiful deserted beaches, and complete peace of mind… Who hasn't been dreaming of the blue ocean?
Like with the real ocean, many SaaS entrepreneurs dream of capturing the blue ocean market. The reasons are obvious: the SaaS market is growing, and it’s getting harder to win in never-ending competition. Founders who dream of a blue ocean market free of competition often think they should offer a cutting-edge technology product. And many give up if they don't have any innovative tech ideas. The blue ocean remains nothing but a dream for them.
But what if someone told you that to create a blue ocean you do not have to always rely on breakthrough technologies or even be the very first to apply them? On the contrary, true visionaries know it is not technology that drives changes, but unique ideas. And sometimes creating a blue ocean requires an ability to see things from a different angle and offer a new value.
As an agency focusing on product design, we at Eleken had the honor to collaborate with several companies that later became blue ocean swimmers. In this article, we will share our experience and talk about the blue ocean strategy to help you come up with an innovative product.
What is blue ocean?
The concept of the blue ocean was introduced by W. Chan Kim and Renée Mauborgne in their book Blue Ocean Strategy. Authors believe that the red ocean stands for a market that is overwhelmed with competitors, while the blue ocean represents an unknown market without rivals. While in the red ocean a lot of businesses sell similar products and try to compete mainly using different pricing strategies, in the blue ocean companies try to create new demand.
Advantages of blue ocean strategy are tempting:
- Opportunity to bring a previously unknown value for users
- Low or almost non-existent competition
- You are among pioneers on a new market or niche
If you decide to pursue blue ocean, your goal is not to be better than your competitors, shifting from red to the blue ocean. Your goal is to get rid of the competition at all by creating a new market niche. And for that you need to offer a unique value to users.
The importance of value innovation for blue ocean
The most important characteristics of blue ocean strategy is a new way of solving users’ pains, which means creating the solution no one expected to exist, but that everyone needed. This is called value innovation.
In their book, Chan Kim and Mauborgne put stress on the importance of value innovation, offering different tools and frameworks for blue ocean strategy. Authors provide a canvas to measure your value innovation potential by balancing between the value upgrade you would bring to the customer and its cost.
However, blue ocean solutions are not always successful. Let’s take the case of Motorola. The company used Iridium technology to create the phone that could work in the remote desert, which could become a life-saver for many people. The downside of this product, though, was that it did not work in the buildings and cars, so instead of becoming a market leader, a poor phone became a market failure. It’s a clear example of a blue ocean strategy that didn’t work.
Companies that intend to capture the blue market sometimes fall into the same trap. They have great new technology and idea how it can be implemented in the product, but they rush to the market and forget about linking their innovative technology to value.
For you to avoid the fate of becoming one of them, here are some pieces of advice on how to implement the blue ocean strategy and succeed.
Tips on applying blue ocean strategy
Now, let’s talk in more detail how to use the blue ocean strategy on the example of the iconic ERRC framework suggested in Chan Kim and Mauborgne’s book. It consists of four main steps and some preparation.
- Analyze industries. First, you should start with a precise analysis of the industry to identify a new trend or demand. Check if customers are fully satisfied with already existing services.
- Define a problem. As soon as you find something that is not as good as it could be, think about what you can do to solve this pain for customers and make them happier with your offer. Do not think about what your competitors have done wrong, think about how you can make the customers' lives easier.
- Follow four actions of the blue ocean strategy framework. The authors of the Blue Ocean Strategy book give us a strategy that includes the following points:
- Implement. When you have answers to the four questions from above, it’s time to implement the strategy.
To better understand the way you can apply the blue ocean theory into practice let’s analyze companies that successfully coped with this task.
Blue ocean strategy examples
Here are some examples of the companies that created uncontested markets:
- Did you know that before unlocking a blue ocean Netflix was one of many DVD rentals? Netflix did not invent movies, but it offered a unique opportunity to watch them online.
- Uber did not compete with taxi owners; instead, it created an app connecting drivers and customers in seconds.
- Airbnb changed the whole traveling industry by simply creating a platform where people looking for accommodation would find those who can offer it.
- Apple is known as the most innovative company. But none of their products were the first to apply the technology they use.
Apple followed the blue ocean strategy when developing iPhone. Take a look at the image below and you will find the points mentioned above:
Designing blue ocean products is an incredibly challenging and responsible process. But at the same time, there’s room for fun and creativity. Here at Eleken, we worked on two projects that belonged to the blue ocean market, and we would like to share some of our experience with you.
Handprinter is a startup offering a product that inspires and helps you contribute to saving the planet by tracking your impact. A product like Handprinter has no analogs in the world and needs to communicate its value proposition and encourage people to sign up very actively. That’s why they turned to Eleken to create outstanding UI and UX that would serve this purpose.
As there were no similar products that we could look at as a reference, there was a lack of data on user behavior for us to make design decisions, while mapping out the customer journey for an early-stage startup can be tricky.
Eleken designers have conducted thorough research, worked closely with eco-experts, drafted user personas and intuitive user flow, and unleashed our creativity. As a result, Handprinter became a user-friendly platform that clearly communicates its value.
In March 2022 Handprinter closed its last funding from a Seed round and continues healing our planet.
The Covid pandemic turned many fields upside down and it touched even the religious life of believers. Going to church was risky, so the idea of creating an online platform for the religious community was hovering in the air. And Faithful is the first platform for preaching online, unlocking the blue island of religious online creators. The platform connects preachers and believers for online sermons. Eleken team was hired to design an MVP for Faithful.
We had a strict time frame and had to do all main screen designs in two months. Eleken designer made one screen after another, and they were approved during regular meetings with the client. The work was finished in 1,5 months. After that, the specs and art were delivered from Figma to Zeplin and got into the hands of the developers.
The interface of Faithful makes the technical side of online preaching as frictionless as possible so that creators can focus on their communication with the community. The signup process was designed to be quick and simple.
The result turned out great: an app has over ten thousand downloads and awesome reviews, getting 4.8 stars on the Google Play store. And the reviews prove that Faithful app was something people were waiting for.
To sum up
The blue ocean is closer than you might think.
To cut the long story short, the blue ocean strategy suggests business owners focus on their idea, perform market research to find something that differentiates the company from others, and offer a clear value upgrade. The four-step blue ocean framework we mentioned can help you analyze your situation and come up with a game-changing solution.
Ah, right! Even a unique product with the potential of unlocking a new market will fail if it was poorly designed. Eleken product designers are ready to work on the new blue ocean product, so don’t be shy and contact us!