How To Find The Right RED OCEAN vs. BLUE OCEAN For Your Specific Product (Service).

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Welcome to the ten minute MBA, I'm yourhost Scott de Clary on the ten minute NBA, I teach you actionable insightstrategies, tools, techniques that you can use to start scale grow or ten,Your Business Tomorrow. Today, I'm going to be teaching you the differencebetween something you may have heard of or mean you may not have heard of ablue ocean versus a red ocean. These are two types of markets where you canstart a business or launch a product, I'm going to break down the differencebetween those two oceans and what you should think about. If you are tryingto start a business, should you try and start a business in quote, unquote ablue ocean, or should you try and start a business in quote unquote a red oceanor is there other option? So let's go right into blue ocean versus Red Ocean.So a blue ocean strategy means that you're launching a product in anuncontested market space. You are...

...essentially creating a market becausethere really is no competition. Yet so you will have to create the industryfor your product. Customers do not know about your product because there is nocomparable. There's no competition, so blue oceans have an incredibleadvantage because you have the option to create the market for your productand then sell your product to that market. So a great example of a blueocean product or strategy was Nintendo when they launched the wee. If youthink about the traditional Gamer, it wasn't a family focus platform orwasn't a family focused audience so game. Console makers were not makingproducts for families they were making it for Gamers Nintendo came along, theycreated the wee that was focused for families, not hardcore Gamers, and thatcreated a blue ocean and the created a product within a blue ocean forNintendo. Now in comparison to a blue ocean, there is the Red Ocean and, asyou may have already guessed, red ocean...

...is the opposite of a blue ocean, whereyou are competing in an existing market where everybody knows about the productalready, and you have to beat the competition which comes with its ownsets of issues, but also some potential benefits in a red ocean. You do nothave to create a new market. People already know what the product is andwhat it can do for them. You just have to prove that your product is betterthan everyone else in the market. So in a blue ocean you're going in brand newyou're creating your market, you have to create demand for your product,because nobody knows what it is. Then you're going to capture that demand ina red ocean you're exploiting existing demand, an example of a red ocean. Iforgot that such on that would be quite literally any product that you alreadyown. If a new competitor came into the space, then you would look at the newcompetitive product and bent market against what you already own. So, forexample, if you're buying a new phone and you have an iphone- and you want togo by a Sam Song, while Sam son entered...

...the market, then that would be enteringa red ocean or a red ocean market. Another term that you'll start to seewhen you talk about red ocean versus Blue Ocean is something called thevalue cost trade off, and this is something that companies have toconsider. This theory is something that companies have to decider. Considerexcuse me when they are deciding whether or not to go into a red oceanor go into a blue ocean. So let me explain so. The value cost trade off isa view that a company takes when deciding to either create more valuefor a potential customer, but they will be charging a higher price point or ahigher cost, which is what you technically have to do. If you aregoing to be going into a red ocean or you can play the other end of thespectrum in a red ocean and you can offer a reasonable value, but at a muchlower cost you're trying to beat your competitors in the red ocean bylowering the price point of your product. So there is a value, costtrade off analysis that you have to consider when you're going into a redocean. The value cost trade off also...

...applies in a blue ocean because in ablue ocean you may be able to achieve incredible value for your customers ata low cost of which can capture an incredible amount of market share. Nowyou can be successful in both a red ocean or a blue ocean, both of themtake certain strategy and they take significant time or resources. If youare in a blue ocean, you have to be able to create a market. You have tobuild a demand for your product in a red ocean. You have to spend a lot ofmoney to create something, that's better than your competitor. So,ideally, what is the perfect situation is actually neither a blue ocean or ared ocean, but a pink ocean, and what I mean by that is it's a market that hasbeen established. So there has been somebody who has created a product thatcould be in competition to yours, but it is not a well established market, soit is still in the process of evolving and the customers are still trying tofigure out exactly what this market is,...

...and I would say an example of thiscould be an n f t company or a blockchain company. That's offering aproduct or service in a market that is still evolving, there's a lot of roomto create a better product or to differentiate. But there is alreadysome awareness there, so you can create something, that's much better easierand it's not super hard to compete, because there is no major fortune, onehundred blockchain companies that have a huge monopoly on the market, but atthe same time it's been around for a little while, so people start tounderstand what it is you're doing and you don't have to say, I'm not onlycreating a block chain tool or piece of tech or company, but also I have toteach you what blockchain is so you can launch an incredibly successful. I usethe example N Ft. just because N F ts are new and there's a lot of buzzaround them and a lot of hype which actually leads to probably companiestaking products to market that aren't as advances or as refined or polishedas they could be. But if you do take a product to market that is an FT productor ft marketplace, or something like...

...that, just because it's really relevantright now, you are really going into a pink ocean. So there is some awarenessthere are. There are some competitors, but you have a lot of opportunity tocreate the market to be the incumbent to have your brand name synonymous withthe NF t category. So I hope that paints a picture of what a blue oceanversus a red ocean ist some of the advantages and disadvantages of both,but also what you should look for. If you're trying to have the easiestpathway to success, which is, in my opinion, a pink o Shit anyways, that'sbeen another ten minute MBA. If you have any business questions aboutstarting scaling growing a business, don't worry, I got you, that's it fortonight. I'll see you tomorrow. I differ tonight. I.

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