Blue Ocean Strategy is a product of a decade plus research and study by W. Chan Kim and Renee Mauborgne. The pair observed that companies across wide spectra of industries (from automobile to tech to computers and others) tend to engage in head-to-head competition (Red Ocean) in pursuit of profitable growth and market leadership. Yet in today’s overcrowded industries competing head-on results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool. Lasting success increasingly comes, not from battling competitors, but from creating blue oceans of untapped new market spaces ripe for growth.
What consistently separates winners from losers in creating blue oceans (creating uncontested market space and making the competition irrelevant) is their approach to strategy. Strategy in business cannot be downplayed. It plays a very crucial part in determining the growth or otherwise of business. Most companies caught in the red ocean;
• Follow conventional approaches in business management, they hit the competitive button continuously without fail to remain relevant and stay ahead of the pack.
• Compete in the same shrinking market segment/niche.
Companies striving to swim the blue oceans don’t use the competition as a benchmark. So for starters, if you want to race and become truly relevant and build long lasting business you must not use your competitors as a standard to determine growth-that’s the Blue Ocean strategy.
In their seminal business strategy bestseller, Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne espoused the means to create uncontested market space and make the competition irrelevant. This they believed and expanded extensively with case studies from the automobile and computer industries among others.
The Blue Ocean Strategies did the magic for companies that created peculiar niche for themselves in the face of tight competition-Red Ocean. Blue Ocean strategies are not useful for businesses or business manager/owners who want to only survive but for those who want to build businesses where customers, employees and shareholders win and make a difference. It challenges us to break forth from the deeply contested red ocean and build on the uncontested and fresh blue oceans that eventually make our competitors irrelevant. Blue Ocean strategies enable businesses to break away from the competition making giant strides as market leaders in their blue ocean independent of the red ocean.
In Ghana, a particular point in case for the blue ocean strategy was adopted by Koko King in the selling of popular Ghanaian breakfast meals (Hausa Koko, Tom Brown, Ekwegbeemi, Wheat porridge, among others). It created a new niche for consumers who love to take their Hausa Koko in the mornings but cannot make time to queue for it. Packaged neatly and hygienically in packs, the vendors are usually spotted at vantage points each morning selling the Koko King Products, consumers can make a choice as to what pack they are buying. Hausa Koko with Kose, Hausa Koko with bread and butter or Hausa Koko with doughnut; additionally one can also choose from the other available breakfast meals, wheat or Ekwegbeemi etc.
The whole point here is the blue ocean strategy in action. The owners of Koko King didn’t contest in the red ocean of the many Hausa Koko and local breakfast delicacies sprawled all over our cities and towns in our neighborhoods and along the streets on our way to work. They chose to operate at vantage points easily accessible to consumers, and offer neatly packaged alternatives which are affordable and equally nutritious.
Over the past 4 years Koko King has earned a name in Ghana for coming out with nutritious, affordable and neatly packaged breakfast meals. The best part in creating blue ocean strategies is that you make the competition irrelevant. Koko King is now in a competition of its own, with its own self. Whilst the other traditional breakfast sellers remain in competition in a deeply contested, out of touch, and shrinking breakfast market. They are racing to attract the same customers to their fold.
Businesses seeking growth need to start looking at ways to create their own blue oceans. Its conventional business wisdom to approach business growth by following the pack and maneuvering to beat the competition to your advantage but that will be you playing the same out of touch and shrinking Red Ocean.
The Red Ocean is shrinking, it’s bloodied-literally with little or no freshness (business growth strategies, opportunities for further growth, innovation etc.) and the big fishes; big corporations of state and multinationals are also ready to cannibalize the little fishes; startups & SMEs. It serves a startup or for that matter an SME’s own interest to create and vie for uncontested markets (blue oceans) instead of the deeply contested and shrinking red oceans.
The good thing is the SME or the startup is either now venturing or preparing for expansion so it might be a good move to first and foremost consider a good blue ocean strategy and pursue than marshaling all efforts and resources with the singular aim of “eating the big fishes in the red ocean.” For Koko king the blue ocean strategy was to deviate from the traditional method of selling breakfast- be at one point and the consumers will come queuing to buy their breakfast. This strategy was the conventional move in the red ocean strategy but to make the competition in the red ocean irrelevant by playing in the blue ocean, Koko King added Value Innovation. Now consumers can get their neatly packed breakfast at any vantage point without hassle – that’s value innovation. Consumers are willing to pay for great value for the product, i.e the porridge they’re purchasing. Put great emphasis in value innovation and you’ll be swimming in the fresh and uncontested blue ocean.
Your business needs to grow, you need to add value to consumers’ lives and also make it a win-win for employees, shareholders and society in general and there’s no better way to do than to swim in the blue ocean.
| BLUE OCEAN | RED OCEAN |
| Competition irrelevant | Deeply contested |
| Fresh ideas and value innovation | Stale and conventional approaches at play |
| Win-win for business and employees, shareholders, and society in general | Decline in fortunes over time |
This is the first of a series on BLUE OCEAN STRATEGIES AT PLAY, covering various sectors and industries applying the blue ocean strategies coming up in the coming weeks. Today’s focus was on food delivery and attention on Koko King.
Posts inspired by the Business Strategy book by W. Chan Kim and Renee Mauborgne- Blue Ocean Strategy
Author: Paa Swanzy-Essuman || p.swanzy@ghanatalksbusiness.com ||
