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All about blue ocean strategy and why SMEs need it

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Blue ocean strategy, sounds familiar? If you are from Malaysia, you might have heard it from NBOS ( National Blue Ocean Strategy ). 

But that’s on a national scale, in this article, we are going to talk about blue ocean strategy on a business scale.

First of all, let’s first explore what’s a Blue Ocean Strategy, business case studies and how SMEs can embrace the Blue Ocean Strategy.

Key takeaways : Blue Ocean Strategy is basically encouraging business owners and entrepreneurs to look beyond competing with competitors on traditional perspectives such as price point, promotions and so on.

Through Blue Ocean Strategy, business owners and entrepreneurs can grow and scale their business by redefining their industry boundaries as a source of innovation.

An example of a business who embraced Blue Ocean Strategy and achieved success is Philips in the United Kingdom, who successfully identified the problem within the water supply and reinvented a kettle that went on to reviving its teakettle sales in the United Kingdom.

GETTING STARTED

Blue Ocean Strategy (BOS), quoting from blueoceanstrategy.com,  is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand.

It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.

Create a brand instead of a business. Then you are differentiated from the rest.

In other words, it also can be understood as, by using a minimum cost, to capture your audience/ customers using a different method from the traditional practice. Hence, differentiating your business.

By doing this, you are no longer a generic business in a certain industry. You are no longer just a restaurant in the f&b industry. You are no longer just a clothing company in the fashion industry.

You are THE BRAND. Something people can relate to and recognise.

SAMPLE BUSINESS CASE STUDIES

One perfect example of a business that applied the BOS principle is iTunes.

Read: With iTunes, Apple had successfully captured a pie from the Music industry none had ever captured before.
Apple is always aware of the illegal music distribution issue back in the late 1990s. People were downloading music illegally from the Internet, causing a huge loss of revenue for artists and also music labels company.
But in that issue is also where Apple realised that there’s a huge demand for digital download on music. Hence, Apple created iTunes.

Read: With iTunes, Apple had successfully captured a pie from the Music industry none had ever captured before.

Apple is always aware of the illegal music distribution issue back in the late 1990s. People were downloading music illegally from the Internet, causing a huge loss of revenue for artists and also music labels company.

But in that issue is also where Apple realised that there’s a huge demand for digital download on music. Hence, Apple created iTunes.

HOW DID iTUNES DIFFERENTIATED APPLE FROM A MUSIC LABEL COMPANY THAT SELLS MUSIC ALBUMS

Well. Traditionally, music lovers or fans had to purchase the whole album regardless of their circumstances. A particular fan might be interested in these two songs in that album and another three songs from another album, but they have no avenue to just purchase what they like. 

This causes a huge growth in the illegal music distribution market.

The emerge of iTunes solved this issue. Not only does it allow consumers to purchase any song track that they like instead of a whole album, it also allows them to download the songs in a more convenient manner. Increasing the experience and bringing it onto a whole new level.

iTunes on Blue Ocean Strategy.

Apple with its iTunes is a perfect example of BOS. iTunes had continued to generate great revenue even until today.

HOW CAN SMES DO THE SAME BY EMBRACING BLUE OCEAN STRATEGY

Well. The key is to realise that the Blue Ocean Strategy is about differentiating yourself from your competitor. 

SMEs also have to understand that differentiating doesn’t mean high budget marketing, so they should not shy away from it. 

Instead, try to think about what you can do to differentiate your products and services from other local competitor.

A good example that we would like to use is Ox-White.

OxWhite Facebook marketing strategy

By using social media and consumer engagement, they managed to achieve a great number of sales on their launch day.

What differentiated them from other competitor is that they are willing to communicate the material as well as the cost of their product to the consumers. This is something that is considered to be private & confidential with most businesses, but not with them.

With this move, they had successfully captured the consumer’s trust and managed to capture a piece of untouched market in the clothing industry.

SO, WHAT CAN SMES DO TODAY TO BEGIN THEIR BLUE OCEAN STRATEGY?

A simple answer would be- Make more content. Try to breach the gap between your customers and you. Let them know what kind of material you are using in your products, the history of your products, the story behind the branding and many more.

By doing just a few simple tweaks, you will differentiate yourself from your competitors and have customers flock to you rather than you chasing them. Here’s a little something from us to kick start your transformation.

Read: 5 free best tools for small businesses to start their marketing campaign  

If you need any help, send a message in to us! All the best on planning your Blue Ocean Strategy!

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Jin Chi

Jin Chi

The founder of Catalyst Digital. Born in year 1995, a huge fan of blue ocean strategy as well as lean startup. You can contact him by email at [email protected]

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