Pinpointing the 'bits that matter' in a red ocean of data
As consumer habits develop and evolve, the way banks operate and how they engage with their customers do as well. With banks under increasing pressure due to competition from innovative fintechs and changing consumer expectations, they must develop the way they target and appeal to customers and maintain a profitable personal relationship.
Blue Ocean Strategy & Red Ocean Strategy (Mostly Blue Ocean Strategy) || Strategic Management Series
Blue Ocean Strategy is all about rising above the competitive mentality and creating a completely new and innovative way of solving the problem of the consumers.
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What the traditional market operates on is called red ocean strategy. The reason it is called the red ocean strategy is because the strategy is mainly about competing with everyone in the market. The market here is compared with an ocean. and the fierce competition with all of the existing companies is likely to leave the ocean red.
On the other hand, blue ocean strategy is about creating an uncontested marketspace. In this way of thinking, you can create a new way of solving existing problems of the consumers of the market. Blue ocean strategy does not mean that you have to invent a new product or service. It means that you can solve the problems people already have, but in an unique way. Think of it like how Uber was able to solve the problem of transportation in an unique way. I provide a different example for this video. Check out the video to find out.
Timestamps:
Intro – 0:00
Red Ocean Strategy – 0:19
Blue Ocean Strategy – 1:30
How To Move To Blue Ocean Strategy – 3:10
Example – 3:55
Conclusion – 7:20
Bonus – 7:40
Full Strategic Management Series Playlist : https://www.youtube.com/playlist?list=PL-0ZwCkamgnIwl6bDoAJ8yP7KJBwVrasz
The Explainer: Blue Ocean Strategy
When you break the bounds of existing industries, competition becomes irrelevant.
The business universe consists of two distinct kinds of space, which we think of as red and blue oceans. Red oceans represent all the industries in existence today—the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are well understood. Here, companies try to outperform their rivals in order to grab a greater share of existing demand. As the space gets more and more crowded, prospects for profits and growth are reduced. Products turn into commodities, and increasing competition turns the water bloody.
Blue oceans denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. There are two ways to create blue oceans. In a few cases, companies can give rise to completely new industries, as eBay did with the online auction industry. But in most cases, a blue ocean is created from within a red ocean when a company alters the boundaries of an existing industry. This is what Cirque du Soleil did. In breaking through the boundary traditionally separating circus and theater, it made a new and profitable blue ocean from within the red ocean of the circus industry.
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Red Ocean Strategy Explained (English)
A Red Ocean Strategy is a strategy which aims to fight and beat the competition. In contrast, those who attempt a blue ocean strategy aim to achieve differentiation and at the same time, low cost. » They focus on exploiting existing demand. » They focus on execution (better marketing, lower cost base etc).
6 Red Ocean Traps that You Should Steer Clear of
What keeps you trapped in red oceans as you sail towards new market space? Be sure to check your mental models that can undermine market creating strategies. http://buff.ly/1HjjUyh Here authors of Blue Ocean Strategy globally preeminent management thinkers Chan Kim and Renée Mauborgne share the six most salient red ocean traps that keep you entrenched in red oceans.
Do you find yourself in crowded, highly competitive markets with shrinking profit margins? Do you want to break out of the red ocean of competition? If you do, you are like most companies that want to leave the existing market space and set out to make market-creating strategies to capture blue oceans. But despite the will to create new markets, many companies struggle to create blue oceans of uncontested market space.
What keeps managers from creating new markets? One of the reasons is red ocean traps – managers’ existing mental models – ingrained assumptions and theories about the way the business world works. These mental models undermine executives’ attempts to create uncontested market spaces and keep companies anchored in existing red oceans of competition. Do you want to know what the red ocean traps are? Read our blog post here https://www.blueoceanstrategy.com/blog/six-red-ocean-traps-you-should-know/.
Read more about the red ocean traps in the expanded edition of the Blue Ocean Strategy book http://buff.ly/1HjjUyh
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