Instead of battling rivals in your current market, a "Red Ocean" approach that often reduces profits, adopt a "Blue Ocean" mindset to expand the market. This involves shifting from competitive to creative market strategies. The "Blue Ocean Shift" process transitions organizations from fierce competition to new, uncontested markets, engaging your team throughout the transformation. As Nelson Mandela said, it seems impossible until completed, this shift is a structured journey to inspire confidence and growth.
Making a Blue Ocean shift is a strategic move from market competition to market creation. This shift can be achieved in three ways: offering a breakthrough solution for an existing problem, redefining an existing problem, or identifying a new problem or opportunity within your industry. Once you've determined your approach, you can devise your market-creating strategy. A Blue Ocean shift expands the market for everyone, with the division of the larger pie determined later. Many organizational leaders operate under two assumptions: market boundaries and industry conditions are fixed, and to excel, you must either pursue a differentiation strategy or become the low-cost provider. This mindset, termed a "Red Ocean" mindset, often leads to lower profits and minimal growth as companies fight for market share in existing industries. An alternative strategy is to consider "Blue Oceans" – industries yet to be created. This mindset encourages the seeding and growth of new markets. Instead of focusing on competition, the question becomes, "How do we create a new pool of additional customers?" This shift requires consideration of how to initiate the process, gain buy-in from your team, and align corporate resources to exploit a new market. A successful Blue Ocean shift requires three key components: expanding your thinking to view the value-cost dynamic differently, practical tools for market creation, and a process that inspires and builds your team's confidence to drive execution. Examples of successful Blue Ocean shifts include the television show Sesame Street, which created a new marketplace for preschool edutainment, and Pfizer's introduction of Viagra, which created a new market for lifestyle drugs.
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