Blue Ocean Strategy

Creating a new business is hard (understatement). But if it is successful, there is nothing greater. I read a book that looks at new businesses in a new and exciting way. Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne is about creating a new market space to avoid battling with competitors. The term red ocean refers to the bloody waters of fierce competition. Conversely, a blue ocean is a new market space that creates demand and has no direct competition. Here are two examples of blue oceans that have really been very successful!

Cirque du Soleil took the classic circus idea in an entirely new and amazing direction! They ditched the traditional 3 ring tent for a theatrical phenomenon that has taken the world by storm! They eliminated and reduced many of the traditional circus “rules” and created a whole new show. There is nothing like it, and it has been more that a success with over 20 different shows throughout the world.

Southwest Airlines has taken a completely different approach to the airline industry. At the time of Southwest’s arrival, the industry was full of big airliners with lots of luxury frills that kept prices high. Southwest came in with a bare-bones approach to travel that made it possible for very low fares. They targeted business travelers and eliminated meals, long flights, lounges, seating choices, but they offered amazing friendly service, speed and frequency of departures. Their business was highly efficient, keeping their costs and prices low. Now there are many imitators, but none have been as successful as Southwest.