CREATIVITY AND STRATEGY are synonymous with success (part 2 of 3)

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THE BUSINESS STRATEGY THAT WIPES OUT THE COMPETITION

There is this biggest branch gym in the whole world called Curves, founded by a failed fitness centre businessman Gary Heavin and his wife, Diane. They totally introduced the concept of an all female centre with no mirrors, no add-ons, and exercise sessions limited to only 30 minutes.

Have you heard about this out-of-the-box thinking of the Gokongwei family’s Cebu Pacific Air in the Philippines? One of their main shocking strategies is giving 95 percent off on plane fares to domestic destinations of their home country and Hong Kong, or the phenomenal success of their C2 brand tea drink.

There is also the extraordinary success of the Southwest Airlines, where you get to ride an airline without using any ticket. America’s famed price-busting Southwest Airlines creates a new market by offering the speed of air travel with the low cost and flexibility similar to driving rented cars. It is a ticket less airline, having introduced self-ticketing machines all over the country, and eventually online boarding passes were offered via their website "southwest.com". The online feature provides additional convenience to customers by allowing them to go to their departure gates without stopping at the ticket counter or the self-service kiosk.

These success stories and other corporate examples of this so-called “blue ocean strategy” will be able to encourage successful and even aspiring businessmen to explore more of the unknown market space, untouched by existing competition. This denotes that the “blue oceans” are all the industries not in existence today. In blue oceans, there is a good opportunity for growth that is both profitable and rapid. Created demand is better than demand that is fought over. It is like a game where the rules are not yet set, so the competition is immaterial in this kind of context. In “red oceans”, all the industries are in existence today which is the known market space. The industry boundaries are defined and accepted, and the rules of the competition are known.

There are several books discussing the blue ocean strategy. Here is a list explaining in simpler terms of what it is, as compared to a red ocean strategy.

1. Do not fight over a market space that already exists. Instead you should create unchallenged market space.
2. Do not outdo the competition. Instead you should make the competition immaterial.
3. Do not utilize the existing demand. Instead you should create and secure a new demand.
4. Do not make the trade-off value or cost. Instead you should violate the value/cost trade-off.
5. Do not align the whole system of the company’s activities with the low cost strategic choice. Instead you should align the whole system of the company’s activities to pursue both the differentiation and low cost.

The cosmetic industry creates a red ocean by hiring models and celebrity endorsers, using expensive advertising and promising the public youth and beauty. The world-famous Body Shop created a blue ocean by giving the public functional cosmetic products that resisted the industry that traditionally sold emotionally appealing cosmetics.

For Dell computers, the billionaire owner Michael Dell thought of a strategy of using low-cost mass production of computers sold directly to the consumers per each customer’s specifications. This strategy bypasses the retailers and other costly marketing channels and schemes. This modern strategy made Dell’s computer competitors almost immaterial.

It is amazing how there are so many innovative ideas are just simple ideas or even common sense notions. Creativity is needed to be competitive in this complex world of ours; hard work, optimism, and good products or services are not enough to be competitive. Such innovative blue ocean strategies are needed to win.

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