Thursday, June 20, 2013

Blue Ocean strategy - How to Find that Blue Ocean to Build A Company?

In this week's reading, Blue Ocean Strategy is one of the topic and it has been recognized as a classic business idea in the world. Although in the readings, one  characteristic of Blue Ocean Strategy is: "incumbents often create blue oceans - and usually within their core business". I want to mainly discuss how Blue Ocean Strategy could be used in exploring entrepreneurial ideas.

As we know that their are three levels of doing business: project, which means the company would make money by finishing a certain projects, usually they will do this for their survival; product, which means the company would like to build a product for people to use and then make money, an easy example is Apple; platform, which means the company would lie to build a platform and attract people to use it, after enough enough traffic they can monetize them somehow. The examples could be eBay, Facebook.

The difficulty of doing those three kind of business is increasing, which is apparent, so here I would like to mainly discuss how to start the second kind of business because it has more potential than the first one but not that difficult as the third one because in a network effect strategy market there is only one big winner. 

Since there are already many successful great products in the market, how can the not well funded start-up find its opportunity? I really appreciate one sentence: 

"The most important feature of the blue ocean strategy is that it rejects the fundamental tenet of conventional strategy: that a trade off exists between value and cost". 

So as a late comer in the market we have to come up with new intelligent ways to solve certain problem to reduce the cost of both customers and merchants and find its best efficient position to succeed. Before Dropbox, people can still store, move, carry and share files and data, and for each function there are already some big companies have dominated the market like hard drive and usb company, some internet software companies's products for shorting files.but after dropbox came out it made all the previous stuff much more easier and efficient so people are willing to pay to get the good service. iPhone has similar example, and due to its awesomeness, people would even willing to pay more for a phone, maybe, it is even beyond a cellphone.

So how we can find and identify the possible opportunities in the market? Blue ocean strategy can definitely help us a lot. Here are some ways I could think of:

1 Observe in real life. When there is pain or inconvenience, there is opportunity.
But we still have to check whether that pain is big enough to feed a company.

2 Focus something that u really like and have passion for. From the commencement speech of MIT this year Drew Houston mentioned he spent time on his early dropbox story, he is really into that. 

3 Do the things at your hands. Make the things on your hands awesome and think deeply. Learn by doing. Not coming out of nothing.

4 Also try to connect your ideas with other people because the blend with ideas would create new flash; be patient to wait for the ideas because great ideas and discoveries would take time to form

Any other good suggestions for this?

1 Blue Ocean Strategy
2 Types of Strategy- Which Fits Your Business?

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