MICHAEL JJINGO: Post-recession, Blue-ocean business is the way to go

Many businesses tend to copycat the existing ideas! If John has a successful restaurant, Peter will do the same, then Esther does the replica. Blue ocean strategy refers to the simultaneous pursuit of differentiation and low cost to open a new market space, thus creating new demand.

There’s potential for higher profits, as there is no competition or there is irrelevant competition.

If there were two oceans for the business-fish to swim, there would be the red and blue. The red ocean is full of blood because it is a space where sharks bite savagely and many times swallow the smaller fish, while the blue oceans are new spaces where sharks are scarce, and they become your allies rather than enemies.

Noteworthy, for any entrepreneur launching a startup or pivoting to an existing business line, he will have a hard time competing in the red ocean, because everyone in this part of the ocean is fighting for small pieces of the same pie. You are much better off creating a company in the blue ocean, with little or no competition.

As we create red ocean businesses, little do we know that it is easier to succeed much faster if we swim with sharks as allies in the blue ocean. Better to apply the blue ocean strategy every time we analyze or discuss a new business idea. Well, blue ocean leaders ought to possess qualities like empathy, high emotional intelligence, mental strength, great communication, people and analytical skills.

Well, every single company that wants to stay above the competition needs to innovate constantly, call it “endless innovations”.

The blue ocean company is a company that ventures into any untapped market space. This company creates demand and demonstrates highly profitable growth by creating unprecedented value for customers.

Blue ocean businesses need to be created continuously, as serious innovations are not just one-time fads. The pertinent strategy here is to stop competing with others. When you venture into the blue ocean, competition becomes irrelevant. One of the strongest approaches here is all about merging two existing market sectors or business lines into a new hybrid one.

All companies succeed or fail based on the strategic purview they hone. Blue ocean companies focus mostly on offering a quantum leap in value for the customers. This is what Uber and booking did for their customers. Uber made transport much safer for women when it created an online tracking system with names and pictures of all drivers.

Creators of blue ocean companies do not use competitors as their benchmarks. They focus on offering the highest possible value and quality to the customers, while aligning this approach with utility, cost and price. The point is not to focus on competition or even the existing customers, but customers to consume the new idea. While the ultimate objective stays the same, the blue go-to-market strategy is very different.

It is better to apply these principles each time we have a new business idea. “What kind of value addition we can deliver to the customers with what we are creating?” Customers come first. The customer is the King, and a DICTATOR at that. Technology is always that enabler.

Existing industry structures are not fixed. They can always be shaped and aligned to the innovative idea in the works. Creating new market borders and spaces are strongly linked with using your imagination and strategic creativity to innovate. The human dimension and trending tastes and preferences are of key importance here.

As a matter of buy-in, employees, clients, suppliers, business partners and investors all need to be aligned with the company’s blue ocean mission. Becoming blue ocean is easier these days, and all industries are subject to being trends. But the companies that emerge as ultimate market winners are those that excel at being visionary. These companies continuously outperform the market and repeatedly create blue oceans. Apple and Tesla are examples.

Back home, we should applaud Safe-boda and Rocket-health that have explored the blue ocean strategy in transport and health services industries respectively. We cannot fail to appreciate the convenience, accessibility and affordability of the solutions that they have invented for their final consumer. This is the way to go.

Again, both red and blue oceans will always exist, but businesses should not stay locked in the red ocean. Blue oceans are created in a space where winning partnerships for all are being created. Blue ocean creation is a continuous phenomenon. Steve Jobs once said: “People who are crazy enough to think that they can change the world are the ones who do.”

The writer is the General Manager Commercial Banking at Centenary Bank