Blue Oceans, Red Oceans and Small Ponds

I just recently finished reading Blue Ocean Strategy. I found the book to be quite informative with a lot of good concepts that can be put into practical application. In the book they talked about the convergence of competition in the bloody red oceans and the need to create blue oceans of value innovation to break out of the red ocean into the uncontested markets of the blue ocean (read bigger profits).

One premise of the book is that there a sort of formula (a process and tools) that can be applied to create blue oceans in a low risk fashion; sort of whenever you need them.

The problem with most business books with a theory to prove, is that they pick examples (companies) that prove their point and ignore all the others. There are so many successful companies out there following vastly different business models that you can prove just about any theory.

For some reason I doubt most of the blue ocean examples in the book were created by strategic planners. They were created by people who:

  • Had a Eureka moment (value innovation idea),
  • Believed in what they were doing (vision and leadership), 
  • Figured out a cost effective and reliable delivery methodology (execution and management), and
  • Then had customers who "got" the value and stuck with it because of the value.

The business world is littered with the corpses of the businesses that get to the second or third point and then flounder.

In fact, I would argue that the last point is the only part that generates long-term viability. No customers (revenue) equals no viable business.

The real formula for business is pretty simple: find a product or service that people will buy and then do an extraordinary job of consistently delivering that value.

The book also focuses mostly on the larger companies (although some started small before their Eureka moment) so that the examples are recognizable to people.

So this then begs the questions:

  • Does this methodology apply to small business?
  • If yes, then do you have to become a large business to really take advantage of it?

If you are operating in a small pond you actually have some advantages. You can take business models that are evolving elsewhere in the larger world and adapt them for your local market. This is actually copying and not creation of blue oceans, but if it works who really cares.

If you read Small Giants, you realize that you can choose the size of company you want to be. Bigger is not always better. If you want to stay smaller and that model works great and conversely, if you want to grow big that is fine too.

If you stay in a small pond with value innovation, there is some risk that another (maybe much larger) company will copy your model and take it to the larger market.

The problem of course is that there is only so much time to do everything. But staying static forever, rarely if ever, works for the long-term. Change is part of the world. So business innovation is just part of it.

Ultimately, the ideas and tools in the book may inspire more Eureka moments for you as an Entrepreneur and as a business… whether you are creating a blue ocean, competing in a red ocean or staying in a small pond.

But don't expect business to be reduced to a simple formula any time soon.

By | 2017-04-03T12:19:52+00:00 December 14th, 2009|Categories: Books and Courses, Business Strategy, Doug's Blog, Marketing, Sales|

About the Author:

Doug Wagner is an entrepreneur, President and Co-founder of Sunwapta Solutions. Sunwapta's mission is to help businesses transform from surviving to thriving, sustainable growth. From strategy to implementation, this means marketing, sales, managing your brand and delivering consistent value. Get more clients and keep them.