Blue Ocean is an innovative market growth strategy created by W. Chan Kim and Renée Mauborgne. Which gives a new market-growing framework to business managers, and this is an effective way to open the market in new fields and offer better services to customers in the real business society.
Why Blue Ocean has such a big power and influence? In my personal thought, it comes from one word, that is, the “Creativity”.Yes! What Blue Ocean does is to provide a different route to meet the market demand and customers’ needs in an alternative way. Which means the business is going to open a new market space and distinguish itself in the “Red Ocean”.
One of a convincing example is theSouthwest Airlines Inc. As the airlines market continue to expand, how to survive in a competitive market become extremely crucial. Jim Parker, the CEO and Vice Chairman of board of directors used the Blue Ocean to steady the SAI’s status in airline market. He used the Low Cost pricing strategy to attract more customers, and only focus on using Boeing 777 to reduce the cost of maintenance and training. While the most effective idea is the flight route design, he found that all the airlines companies did not provide the short distance services to customers, and this caused lots of inconvenience at that time. Based on the low cost, the Southwest Airlines offered the short distance services without transfer flight or stations. After the revolution of the SAI, it jumped to the top 3 companies in United States.
Thus, how to construct a blue ocean in a competitive market is a key growing strategy for businesses, not only for business itself, but also for customers, one of the biggest beneficiaries in the tertiary sector.
References:
http://flevy.com/blue-ocean-strategy
http://blog.hubspot.com/blog/tabid/6307/bid/54/Blue-Ocean-Strategy-A-Small-Business-Case-Study.aspx
http://www.southwest.com/