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Misunderstanding on Blue Ocean Strategy

One of my enterprise client told me that he came across a "corporate consultant" earlier before. The consultant told him that deploying the consultant's strategy would help him targeting a "blue ocean market". This is a story reflecting how deeply the "blue ocean market" (or "blue ocean strategy") has been misused.

Referring to the book "Zero to One", the author asked us a question, "Given that a community do not have an Indian restaurant, is starting up an Indian restaurant there means targeting a blue ocean market?" In the first glance, like the "corporate consultant", I gave an answer "Yes". But the author disagreed. What he wanted to deliver is that, every human being have a single stomach only. People over there can have a meal in a Chinese restaurant, Western restaurant, etc. So, starting up an Indian restaurant in this community just mean making a differentiation instead.

It is okay to deploy differentiation as corporate strategy. Internet make competition transparent. Product comparison is just a click away. So, similar products will easily be drawn into a pricing war. Given that SMEs do not have the resource to survive a pricing war in general cases, it is safe to say that most profitable SMEs in the market now is good at making differentiation over branding, product development or business model.

Till now, a question, "Do digital transformation help to just differentiate or building a 'blue ocean strategy'?"

In our opinion, unless there were very unique innovation over product development or business modeling, most of the work done through digital transformation is for differentiation. Non-matter your digital transformation upgrade your business process or online marketing, you are just making your business more efficiency and effective.

But digital transformation still relevant. Cost rising in terms of human resources, automated system can help minimize manpower in business operation will provide a huge competitive advantage. And it will also drive out those whom refused to digitalized.

All in all, successfully deploying "blue ocean strategy" will make the business huge. That's what we see on the stock exchange market, like Apple, Amazon, Taobao, Tencent. While good at differentiate your businesses help an SMEs profitable, excel at it can also be a big enterprise.

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