Blue Ocean Shift

“What if you could move your business out of fierce competition and into unexplored markets, tapping into unlimited growth opportunities?”

1. The Concept of Blue Ocean Shift

Blue ocean shift is about escaping the overcrowded "red ocean," where competition is fierce, and venturing into a "blue ocean," a market with untapped opportunities. This strategy isn’t confined to any single approach but represents a methodology for creating entirely new market spaces.

Traditional business strategies often emphasize either low-cost pricing or delivering superior value. But blue ocean strategists focus instead on redefining the playing field by identifying new markets. This allows companies to sidestep competition rather than fight over the same consumer base. Groupe SEB’s ActiFry product exemplifies this shift. By introducing a new method for making healthy french fries with hardly any oil, they created a market that didn’t exist before.

The framework follows three major components. First, it requires a fresh perspective that broadens the way companies think. Second, it necessitates a "human" approach to involve and inspire the people needed to create change. Finally, it relies on targeted tools to translate these ideas into actionable business strategies.

Examples:

• Groupe SEB’s ActiFry paved the way for healthy fry-making and captured a whole new market.
• CitizenM created a fresh approach in luxury hotels, eliminating traditional elements such as the front desk.
• Comic Relief’s Red Nose Day redefined charity fundraising by making donations fun and accessible to all.

2. Non-Disruptive Market Creation

Not every market shift is about disrupting an existing one. In fact, new value can also come from creating markets that coexist with old ones. This notion extends the possibilities for growth.

For instance, disruptive innovation replaces existing industries—like how digital photography replaced film. Conversely, non-disruptive creation identifies new problems to solve without replacing what already exists. Pfizer’s introduction of Viagra didn’t disrupt the drug market; it created a solution for a previously unaddressed issue, erectile dysfunction. Somewhere in between, redefining an existing problem leads to market change without overthrowing industry leaders, as Groupe SEB did by redefining fry-making safety and health.

These strategies illustrate that markets can emerge from innovation without dismantling what’s already established. Employing this framework allows organizations to rethink how they identify opportunities—for instance, by exploring customer frustrations that existing solutions overlook.

Examples:

• Viagra created a new drug market for erectile dysfunction without disrupting any other segment.
• Digital cameras disrupted the traditional photography industry, leaving Kodak unable to adapt.
• SEB’s ActiFry redefined unhealthy cooking and gained buyers across demographics.

3. Essential Mind-Set for a Blue Ocean Perspective

To create blue ocean markets, adopting a new way of thinking is critical. Instead of focusing solely on outperforming competition, companies should question assumptions about industry norms and explore alternative paths.

Take the UK charity Comic Relief as an example. By introducing humor through Red Nose Day campaigns, they reinvented how charities fundraise. They moved away from elite galas and engaging wealthy donors to involve entire populations, making charity accessible and joyful for all. This shift revealed that industries aren’t constrained by their current rules—they are malleable and open to invention.

Companies also need to focus on attracting new demand rather than fighting over existing market shares. As Comic Relief did, breaking from convention creates opportunities where no competition exists. Their approach was also cost-effective, proving a blue ocean doesn’t have to be extravagant to generate value.

Examples:

• Comic Relief’s Red Nose Day used humor to bring broad, grassroots participation.
• CitizenM’s novel hospitality design provided affordable luxury in a simplified model.
• Companies challenging stale industry assumptions have tapped entirely new markets.

4. The Human Element Drives Change

A company can only make significant market shifts if its team feels inspired and motivated. Addressing human fears and giving employees a sense of purpose is key to the process.

Beginning a blue ocean shift might seem overwhelming since many industries rely on longstanding practices. Breaking the framework into manageable steps—atomization—helps overcome this fear. Furthermore, firsthand discovery allows every team member to experience the problem and the solution personally. People are more likely to embrace change when they see its impact through their own eyes rather than being ordered to act.

Finally, fostering a fair process creates transparency and brings everyone on board. Encouraging participation in decision-making and setting clear expectations ensure employees feel heard and valued.

Examples:

• Breaking tasks into small chunks removes the sense of being overwhelmed.
• Comic Relief engaged stakeholders throughout their charity campaigns, fostering belief in their new approach.
• Clear, collaborative planning improves trust and commitment at all levels of an organization.

5. Evaluate Your Current Standing

The pioneer-migrator-settler map is a tool for assessing current products or services, helping organizations identify which areas could use a fresh approach.

Pioneers are trailblazing products that customers love. Migrators add some value but don’t break new ground, and settlers are offerings barely distinct from competitors. This map encourages businesses to shift focus toward developing pioneers while reducing reliance on settlers.

For instance, companies might find themselves stuck in imitating competitors or adjusting products monotonously. A clear assessment of where your products fall allows you to revamp your strategy and aim for innovation.

Examples:

• A "settler-heavy" business model exposes a company to stagnant growth.
• Elevating migrators to pioneers can unlock unexplored opportunities.
• Businesses like SEB have found new revenue streams by shifting settlers into trailblazers.

6. Map Strategy to Spot Competition

The strategy canvas provides a way to clearly chart how your offerings stand against competitors, offering direction for blue ocean initiatives.

By plotting factors such as price or quality on one axis and comparing value delivered on the other, companies can see whether they fall into competitive patterns. This insight lets organizations break away from the pack by focusing on unique attributes that competitors ignore.

Examples:

• Charities working on similar issues often compete for donors. Red Nose Day diverged with humor.
• Wine companies struggle under customer confusion, leaving opportunities for clarity unaddressed.
• Strategy mapping can show where customer dissatisfaction aligns with opportunities.

7. Uncover Hidden Pain Points

Creating a buyer utility map breaks down barriers that discourage potential customers. By systematically addressing pain points like convenience or usability, products become more accessible.

In the wine industry, customers often find themselves confused over labels and varieties. A simplified approach could expand the audience, as eliminating struggles and frustrations opens doors to people previously uninterested in the product.

Examples:

• Philips’ innovative kettle eliminated time-consuming limescale issues.
• CitizenM gave customers simplicity by cutting out complicated hotel moves.
• Reducing packaging waste created new followers for companies adopting eco-friendly policies.

8. A Framework for Uncovering Opportunity

Once you know what customers really want or need, the six paths framework can reveal where opportunities lie. It involves breaking industry boundaries by assessing competitors, buyer chains or other systemic factors.

For example, observing unrelated industries can show different approaches to solving similar problems, like how rideshare apps have influenced delivery services. Identifying growth trends—or even reshaping them—turns challenges into possibilities.

Examples:

• Industry overlaps like AirBnB reveal unexplored hybrid markets.
• Companies embracing climate trends often find appeal with younger buyers.
• Focusing on new chains of buyers can reveal overlooked niches.

9. Simplify and Transform Ideas Into Action

Using the four actions framework, companies can make their blue ocean concepts actionable. By asking what to cut, reduce, raise or create, business owners can draft sharp strategies with customer value at their core.

For instance, cutting luxurious but redundant costs, such as citizenM’s elimination of front desks, allows companies to reinvest in features that matter to users the most.

Examples:

• Cutting unnecessary features can boost affordability and efficiency.
• Adding self-service represents creativity replacing traditional systems.
• Philips adjusted consumer appliances suited to a simplified daily use.

Takeaways

1. Build a cross-functional team to implement ideas effectively, ensuring different perspectives influence strategy.
2. Use frameworks like the strategy canvas and utility maps to thoroughly understand market gaps and customer needs.
3. Inspire trust by including team members at every level in the decision-making process while clearly outlining steps and goals.