Monday, July 27, 2015

Redefining Industries by Uncovering New Needs

The article “Blue Ocean Strategy” describes two terms that define how a company approaches strategy – red oceans and blue oceans. Red oceans represent known market space and blue oceans represent unknown market space. By understanding these types of characteristics, we can begin to see how organizations can strategically discover, identify, or define new markets.

Blue oceans frequently spring from red oceans. They often use existing technologies and wield them in a way that makes them usefulness in new ways to consumers. The article uses the example of Cirque du Soleil, who redefined the circus experience. Circuses (red oceans) had been around forever, but the market demands were changing and the industry was not doing well. While other circuses focused on securing new and better talent, which was a costly strategy, Cirque refocused to deliver a new experience to its audience. Its new show had elements of the circus, but also touched on a new artistic element that audiences had seemingly been missing. Cirque du Soleil achieved success by finding a way to redefine an existing service so that it would be seemingly new and more exciting than before. It uncovered a need the audience did not even know it had.

Looking back to the article “Your Strategy Needs a Strategy,” we can see that visionary strategists might fit nicely into the blue ocean approach. Visionaries “know that future and to predict the path to realizing it” (Reeves, Love, & Tillmanns). Like visionaries, blue oceans work to create demand and to change the boundaries of an existing industry (Kim & Mauborgne).

My fiancé works in the technology startup industry. Their job is to create a product that fills a need people might not even know they had. The article shares that blue oceans are not about technology innovation. This point supports the idea that technology is not just about the functionality of a product, but more importantly, it is about the need it fills. Even more so than ever, the technology and skill needed to create a product often already exists – it is finding a way to wield technology and skill to deliver something new.

I recently read the book Zero to One by Peter Thiel. In interviews, Thiel says that he always asks candidates, “What important truth do few people agree with you on?” A good answer to this question can be helpful in discovering new markets. This is one approach to finding a blue ocean – asking the right questions. Figuring out what people really want and need vs. what would be a fleeting service is the great challenge in many of our jobs. Long-term demand is difficult to gauge, but the blue oceans take this risk by sharing demand with other markets and forging forward by creating their own.

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