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This blog post corresponds to episode 58 of The WealthBuilders Podcast: The Key to Championing Business Innovation: Blue Ocean Strategy Examples

Are you a business leader or owner who is experiencing stagnation in your industry? Perhaps your margins are getting tighter and you’re unsure about how to increase your profits without sacrificing value. Or maybe you aspire to be an entrepreneur, but you feel like every good business idea is already taken. The Blue Ocean Strategy was created to solve such frustrations. It is a creative model for generating business innovation that creates new value.

If the Coronavirus pandemic showed us anything, it’s that the ability to pivot and adapt is invaluable. In the business world there is a continual influx of new products and services competing for marketspace. This competition, coupled with new technologies and other outside factors, make business innovation a need, not a choice.

The same is true in life. Difficult situations will be thrown your way, and the ability to think innovatively will help you stay on course amid trials. When implemented, The Blue Ocean Strategy eliminates victim mentalities and enforces victor mentalities. This blog post will share Blue Ocean Strategy examples as well as practical advice for how to utilize it in your organization.


The Blue Ocean Strategy Summary

The Blue Ocean Strategy was created by Chan Kim and Renée Mauborgne. Here’s The Blue Ocean Strategy summary: Rather than fighting competition in a crowded market space, Blue Ocean Strategies create new demand that makes their competition irrelevant. In other words, a Blue Ocean Strategy uses business innovation and serves unmet needs in a new or preexisting industry.


Here’s a quote from the founders:

“Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. Value innovation places equal emphasis on value.”

If you feel like your industry is drying up, don’t get discouraged. Instead, take a second look at your industry. What needs to change? Can you create new demand that your competition isn’t meeting? Are there any unmet needs? You could be called to create a profitable, unique decision. Never use the competition as a benchmark. Instead, make the competition irrelevant by providing a leap in value and reducing costs.


Blue Ocean Strategy Examples

Companies that utilize the Blue Ocean Strategy increase value to customers without dramatically increasing the cost. As you will see, these products and services create new demand that serves consumers in fresh ways.


  • The Model T Ford

Cars existed before the Model T, but they were very expensive (and frequently broke down!) Henry Ford created new demand by producing affordable and accessible cars. The assembly line lowered the cost of the entire vehicle as well as the parts if they needed to be replaced.


  • Uber

Uber is an example of business innovation from the taxi industry. It lowered the cost through utilizing vehicles people already owned. Uber didn’t require any new technology on a grand scale. It created value through simplifying transportation.


  • Airbnb

Airbnb innovated from the hotel industry. Before Airbnb, your options were limited to a hotel or resort. Rental property agencies existed in popular vacation spots as well, but they weren’t as accessible as Airbnb. With Airbnb, you can book a property in minutes from your phone with no interpersonal interaction. Plus, you can find an Airbnb in your price range in pretty much every area of the United States.


  • Subway

Subway is one of the prime examples of The Blue Ocean Strategy at work. Before Subway, all fast-food options were unhealthy. Subway created new demand by offering affordable food that was good for you and efficient. Rather than mirroring their competition, they carved out a new niche in the fast-food industry.


  • Tom’s Organic Toothpaste or Sensodyne

In my opinion, the toothpaste industry is one of the most inundated markets. There are dozens of options! However, Tom’s Organic Toothpaste does something different and offers a natural, fluoride free option. Sensodyne harvested a different sector of the market by serving the needs of people with sensitive teeth.


What is a Red Ocean?

Now that you’ve seen examples of The Blue Ocean Strategy, we should touch its opposite: A Red Ocean Strategy. This strategy tries to beat competition in a market space that’s already crowded. It gets its name from the metaphorical blood that’s in the water from all the competition.

More businesses than you think operate in red oceans. With the advancement of technology, the removal of trade barriers, and the lowest price being the predominant factor that motivates purchases, this strategy isn’t sustainable. Unless you innovate and serve a new need, you’ll be forced to cut your prices to stay competitive. This results in tighter margins which stifles company growth and limits the amount you can pay yourself.


The Blue Ocean Strategy Versus The Red Ocean Strategy


Red Ocean

  • Competes in an existing market space
  • Must beat the competition
  • Exploits existing demand
  • Lowers value in order to lower the cost
  • Differentiates from the competition based on low cost


Blue Ocean

  • Creates an uncontested market space
  • Makes competition irrelevant
  • Creates and captures new demand
  • Increases value while maintaining or lowering the cost
  • Differentiates from the competition based on value

What Blue Oceans exist in your industry? How can you partner with the Holy Spirit to create a new product or service that improves the consumer’s quality of life? At its core, business innovation is about strategizing ways to serve peoples’ needs better. Intentional service and excellence are ways that we can show God’s love in the marketplace.