August 16, 2020
August 16, 2020
When COVID 19 hit several months ago, the words we heard most in our collective lives were “disruption, chaos and disaster”. No one knew or could even imagine how the next few months would play out. At that time, we had no doubt that we would get back to our lives and businesses very quickly. When that did not happen, it became clear that to survive; businesses had to adapt and do it quickly.
Our experiences in life shape us and push our limits of what we think is possible. None of us were ready for the havoc we have experienced. The “other side” of this disruptive period has been extraordinary, innovative ideas, initiatives and inventions that have come to help us all adapt to our new environment. Ingenuity and creativity are helping us find some “normal”.
In business, the “Red Ocean strategy” is used when new businesses enter already saturated markets. They provide many of the same products and services that already exist, with some differences. To survive, the trade-offs are usually value – cost. Higher value or lower costs. Although this can differentiate one business from another, they are still one of many offering the same types of products or services. It is very hard to compete and survive profitably.
You do not need to look far to see these businesses. For example, fast food chains are competing in saturated markets globally. While offering lower prices or better value is always welcome; any business competing in a space where you were one of many without differentiation Is problematic and may not be financially viable over the long term.
Necessity is the mother of invention. Our “new normal” has incentivized business to become creative, bring new ideas or take what exists, shift, and turn it into new opportunities and possibilities. Two example of successful companies that have used a “Blue Ocean strategy” are IKEA and Virgin Group. Virgin has replicated its value innovation principles in other industries such as space, music, entertainment, and insurance. They have both created niches in “uncontested space” which makes competition irrelevant. Both companies are creating and capturing new demand and aligning themselves with products and services with differentiation and cost value.
New ideas and businesses are being developed every day. Although it may seem “impossible” for you to reinvent your own business, a better question is what if you do not try? Restaurants survived by having curbside take out or delivery. Manufacturers have now switched to producing needed products related to safer workplaces. Many service type businesses that were store front now sell on platforms such as Shopify.
As we all compete to grow our businesses and bring in more clients, the idea of change can be daunting. Ask yourself what you can do to provide value and differentiation in a saturated marketplace to create your own successful “uncontested space”.