Wednesday, November 27, 2013

Maintaining the "Blue Ocean" Status

Blue oceans create a new marketplace and attract new demand. It is a great idea since the idea of competition does not exist. Also, it is not about the technological innovation a business comes up with that drives revenues up and thereby profit but about the creativity in strategy and execution. As clearly mentioned in the article, “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne a unique idea that drives demand arises from an already existing business framework that has an established infrastructure. A good example of this is Apple; how it leveraged its underlying technology to venture into the smartphone industry with the iPhone and then later into the portable music and tablet industry through the iPod and iPAD. Netflix is the leader in the online video streaming industry that rode on the horseback of its existing infrastructure (Quickster that physically rented DVDs) and is enjoying the winner-take-all position today after leaving behind Hulu, an established player in just a few years.

A recent example of a company that created a Blue Ocean is BitCoin. A P2P innovative payment network and a new kind of money, it created a revolution in its field by letting buyers all across the globe purchase goods and make instant and easy payments with the lowest processing fees. The unique advantage it holds is that there is no central authority who manages these transactions and these coins are distributed collectively by the network. it gained competitive advantage by allowing for exciting uses that could not be covered by any previous payment system. [1] Thus, instead of choosing a red ocean strategy, this four year old organization established a stronghold in the market that no one else earlier ever could.

Growing now is the idea of the “Coin”, a digital device created by a San Francisco startup that electronically stores up to eight credit, debit, gift, or membership cards, and lets you switch between them by pressing a circular button on its surface. This palm sized card can be used at any conventional reader or ATM machine just like you would swipe your original card. It’s portability, ease of use and it staying in constant contact with your phone using the same BLE tech that powers syncing with a phone, if you leave it behind at a restaurant, your phone will alert you once you walk away. [2]

The big question now is can coin replace all your credit cards and create a blue ocean revolution?




References:
[2] http://www.theverge.com/2013/11/14/5103820/coin-electronic-card-to-hold-all-your-credit-cards




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