“Red Oceans” vs “Blue Oceans”

In their book “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant”  W. Chan Kim and Renee Mauborgne’s divide the world of business competition up into two oceans – red and blue.  Companies that compete in “red oceans” are all competing for the same set of customers by delivering the same features, benefits and value, which leads to being undifferentiated and ultimately the only differentiating factor left is price, which is a bloody race to the bottom.  By contrast, a few companies swim away from the bloody red waters and operate in a “blue ocean” where they have made their competition irrelevant by creating uncontested markets as they have figured out how to deliver unique value at lower cost – while that may seem contradictory, such companies don’t accept how things have always been done.  Instead, they figure out how to deliver superior value at lower cost – this creates uncontested market space – and then focus on that differentiation.

Examples of “blue ocean” companies include Southwest Airlines, [yellow tail] wines, and Cirque du Soleil.  While an entrepreneurial company may not be able to create a truly blue ocean of uncontested market space as these global brands have, entrepreneurs can learn a number of valuable lessons from blue ocean companies to help become more differentiated from the competition.

Adopt A “Blue Ocean” Mentality

Don’t accept that the only ocean to swim in is the bloody red waters of a red ocean.  Challenge the status quo and the ways it has always been done.  Understand the pain points your industry assumes can’t or shouldn’t be addressed.  Can your business help alleviate those pain points?  Are their features that your industry assumes should be always delivered that your customers don’t find valuable – then identify those, and eliminate them.  Are there features that your product or service could deliver, but currently aren’t, that your customers would find valuable?  Don’t accept the status quo of your industry and the way its always been done – instead, identify how you can differentiate your product or service in the minds of prospects and customers.  Adopt a blue ocean outlook.

Define Your Three Uniques

You need more than a changed outlook.  Once you have determine how to truly be more differentiated than the competition, you’ve got to succinctly be able to tell ideal prospects what makes your product/service truly unique.

Your ‘uniques’ are what set you apart from your competition and are what your ideal customer is looking for.  Most or all of your competitors do one of your three uniques; a few may do two of your uniques; but no other competitor should be characterized by all three of your uniques.

It usually takes a number of attempts and some intense conversation to define your three uniques – but it’s worth it!  Grab a pen and paper and write down everything that makes your service, company or product valuable from the perspective of your prospects and customers. If necessary, ask prospects and customers what they think makes you unique. You’ll likely come up with a lot of defining characteristics. Work with the entire leadership team to cut those down to only three statements. Within them lies the value only you can uniquely offer to your prospects and customers.

Put Your Three Uniques Into Practice

It’s not enough to determine your Three Uniques and never think about them again. Ideally, your company’s business model will be built around them, and these Three Uniques appear in all of your marketing and sales efforts. The three statements of what makes your company unique need to be communicated repeatedly internally and externally. Use them wherever you can, in presentations, sales proposals, as well as marketing material and during internal state of the company meetings.

So What?

If your strategy is to compete on price, you will win customers in the short run, but fail as a business in the long term.  Don’t accept undifferentiated positioning!  Instead differentiate your company by adopting the three steps above.  Doing so goes to the heart of getting what you want from your business, and builds a business of greater value.

Next Steps

Schedule a call through navigatethejourney.com to discuss how we have helped clients pursue a strategy of differentiation in the marketplace.

About The Author

Tom Barrett is a Certified EOS Implementer™ and focuses on implementing EOS® with growth-minded entrepreneurial businesses helping them to Clarify, Simplify & Achieve their Vision.

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