Competitive Analysis
We’ve been taught in business schools and business classes to analyze the competition! What products and services do they have that we do not? What markets do they serve that we do not? How are they positioned? What is their strategy? How do they perform and what is their price point?
For a long time I’ve told my B2B clients that if they focus too much on their competition, they will be looking at their business and marketing strategy laterally. If they look for new opportunities that their competition have not taken advantage of, they are forward-looking and have a better chance to succeed (at least until their competition looks laterally and then catches up to them).
Blue Ocean Strategy
Blue Ocean Strategy is a way to leap beyond the competition. Blue Ocean Strategy first emerged as a book written by W. Chan Kim and Renée Mauborgne and published by Harvard Business Press in 2005. It is now an entire, global institution offering consulting, training and presentations on the topic. The gist of Blue Ocean Strategy is that rather than competing in the bloody red ocean where your competitors are, you’re better off finding a blue ocean that no one is in.
I use the market analysis image above to illustrate Southwest‘s blue ocean analysis of the airline industry. Most airlines were duking it out in the mid- to high-price and performance (red ocean) quadrant. No one was in the low-price, high-performance (blue ocean) quadrant, giving Southwest a tremendous opportunity.
How do you find your blue ocean? Analysis of your industry and market is a start. Importantly, intelligence about what your customers need and want (that your competitors are not providing) can shed light on possible blue oceans. Staying close to your customers and serving their needs helps you hold onto your blue ocean – a great example now is Southwest not charging for checked bags when all other airlines are (and in doing so, other airlines are irritating their customers).
Blue Ocean Strategy is the kind of strategic thinking that can help B2B marketers change the playing field and gain advantage, at least until the competition catches on. Then it’s time to find the next blue ocean.
Do you have a blue ocean? Please comment below.
Original photo by MGShelton on Flickr. CC by 2.0
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