Blue Ocean Strategy Made Easy

okHave you heard of a Blue Ocean Strategy before? One of “aikido” style strategies that you can use to expand your business and increase your bottom line, especially if you are competing in a competitive industry or competing with the big boys in your industry.

People spend days to learn about this strategy in seminars and workshops, and they are paying thousands of dollars to attend them. Well good for them because they will learn about this strategy and how to use it in their own organizations in great details.

For those of you who do not have the privilege to attend this kind of seminars and workshops, don’t worry I will explain to you the core concept of Blue Ocean Strategy that you can use immediately to grow your market thus increase the bottom line of your business.

First let’s talk about the basic principle of the Blue Ocean Strategy. Normally when we talk about a business strategy that we use to compete with our competitors we often refer to it as, competing head to head with them. For example competition between Microsoft’s Xbox and Sony’s Play Station console is a head to head competition. Every time there’s a new version of game console coming out, they will always highlight their superior features such as the storage capacity, the graphic card, the speed of the system, the processor and the new technology, just to name a few  and obviously the one with the better offer will win the competition. These two companies can afford to compete in this manner because they have billions to burn, and this makes it very hard for small companies to compete with them.

But not to worry, because this is one of the situations where we can use the Blue Ocean Strategy to compete with these two giants and gain some market share too in the gaming industry. The basic principle of Blue Ocean Strategy is not to capture the existing market share rather it is used to expand the market share thus enable us to capture them. Let me explain.

Nintendo is another company that compete in the gaming industry, but they do it differently. Nintendo knew that it is very difficult for them to compete with Microsoft and Sony head-on because these two companies have a huge advantage over them in the gaming industry. So, rather than  competing with these two giants head to head, Nintendo used Blue Ocean Strategy by answering the three important questions that it used as its business strategy to successfully compete in the gaming industry.

First question, who are its non-customers i.e. the group of people who not play games or do not like to play games on Xbox and PlayStation? Obviously gaming industry is targeted towards the “young adults” group, whereas women and old aged people do not fall into this group. Therefore the answer to this first question is, women and old aged people.

Second question, why is it that these group of people are not its customers? Well, if we look carefully, games that are produced and sold for Xbox and PlayStation consoles are action oriented games, and obviously most women and old aged people do not like this kind of games or activities.

Finally the third question, how can we turn our non-customers to become our customers? And this is the basic principle of the Blue Ocean Strategy i.e by expanding the gaming market, that mostly include the “young adult” to include the women and old aged people as well.

In order to attract women and old aged people to play games, Nintendo introduced Wii console which focused on physical movements of the players  and interactions among them i.e. “family bonding games”. And these proved to be a very successful strategy for Nintendo, whereby as of the first quarter of 2012, Wii leads its generation over PlayStation 3 and Xbox 360 in worldwide sales and with more than 101 million units sold in December 2009, the console broke the sales record for a single month in the United States.

In a nutshell, you can use the Blue Ocean Strategy to expand your existing market share by answering this important 3 questions. One, who are our non-customers? Two why are they our non-customers? And number three, what can we do to turn them into our customers and ultimately to become our loyal customers ?