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In
business, there are two oceans—red and blue.
Red
oceans represent all companies in existence today that
compete by grabbing for a greater share of limited
demand. As a result, market space becomes crowded and
the prospects for profits and growth decline. Products
turn into commodities and the competition turns the
water “bloody.”
Blue
oceans, on the other hand, are all the industries not in
existence today. It is the untapped market space, the
creation of new demands, and therefore opportunities for
highly profitable growth. Blue oceans spin off from red
oceans, created by expanding existing industry
boundaries.
 “Cutthroat
competition has left bloody spills on competing
commodities, thus a ‘red ocean’ arena that has seen all
too many business casualties. Fighting for competitive
advantage, battling over market share, and struggling
for differentiation, industries compete head-on so that
rivals fight over a shrinking profit pool,”
explains marketing strategist Josiah Go,
who is the first Filipino to ever complete the Blue
Ocean Strategy (BOS) qualification process in France. Go
is also chairman of Mansmith and Fielders Inc., an
advocacy-based marketing and sales trading and
consultancy company.
Based on
a study of 150 blue ocean creations in over 30
industries, Blue Ocean was mapped out by W. Chan Kim and
Renée Mauborgne, who strongly contended that “tomorrow’s
best corporations will win their battles not by
struggling against their competitors, but by creating
blue oceans of uncontested market space ripe for
growth.”
World-renowned companies like Cirque du Soleil,
Starbucks, Ikea and Nintendo have been said to have
greatly profited from this breakthrough strategy in
their respective markets.
Kim is
chair professor of strategy and international management
at INSEAD, the world’s largest business school, located
in France. Mauborgne is likewise an INSEAD distinguished
fellow and professor.
In the
Philippines, Go is the chief evangelist of Blue Ocean
Strategy, a relatively new buzzword in the business
world that has taken international corporations by
storm.
Blue Ocean
enters the Philippine seas with a lot of enthusiasm and
hope for top management and marketing practitioners in
the country to adopt the new mindset.
Among
Go’s pioneering Blue Ocean Strategy clients are major
companies in telecom, pharmaceutical, retailing and
financial services.
Go said
there are two ways to create blue oceans.
“One is
to launch a completely new industry, and the other is to
expand the boundaries of red oceans and create a blue
ocean out of an existing industry. The goal of the Blue
Ocean Strategy is not really to out-perform the
competition in the existing industry but to create new
market spaces, thereby making the competition
irrelevant,” Go points out.
The
marketing guru shares Kim and Mauborgne’s classic
example of how the Blue Ocean Strategy worked for Cirque
de Soleil.
“Cirque
du Soleil became successful not by taking the market
share in a declining circus industry, or competing
against new distractions for children such as TV and
video games. Cirque du Soleil reinvented itself and went
beyond being a traditional circus for children. Making
entertainment more of an experience than just a
diversion, Cirque du Soleil appealed to a whole new
group of customers such as adults and corporate clients
who are ready to be awed and thus pay a premium price,”
Go explains.
These
strategic moves, which Kim and Mauborgne’s coined as
“value innovation”—create powerful leaps in value for
both the firm and its buyers, rendering rivals obsolete
and unleashing new demand.
“When
your company’s products and services have become
commoditized, making it increasingly engaged in price
and promo wars that have shrunk profit margins from your
products and services, then you know that your company
needs to get out fast of the red ocean markets before it
drowns,” Go adds.
To
spread the gospel of
Blue Ocean,
Go will be one of the speakers in the 3rd Market Master
Conference: Brand and Trade Initiatives, slated on March
21 at the Mandarin Oriental Hotel in Makati City.
The
conference also brings together top marketing and sales
minds of the country such as Dondi Gomez of Unilever
Philippines, Weena Pineda of Splash Holdings, Benedicto
Cid of AC Nielsen Philippines, Wilson Lim of Abenson,
Waltermart and ElectroWorld; and Joanne Lim of
Waltermart Supermarket, in a learning opportunity to
know the latest marketing insights from various
industries.
For inquiries about the conference and the Blue Ocean
Strategy, call 722-2318, 727-7142 or log on to
www.mansmith.net |
