Find your competative edge

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If the perceived value of two products are the same, price will conquer. Imaging you are looking to buy a melon in the grocery store. You find two melons that look exactly the same but one of them cost 4$ and second one cost 5$. You investigate them a bit further and notice that the first melon is from Brazil and the other from Argentina. If you perceive them to have equal value to you, you will buy the cheaper melon. On the other hand you could choose e.g. Swedish pork over Danish pork even if the Swedish pork is 20% more expensive if you perceive its value e.g. the taste and quality is superior. This is where marketing comes into play.

No matter what you are selling you need to differentiate in order to get attention in the sometimes overcrowded market jungle. It is a fierce competition and the law of the jungle adhere in all aspects, it is the survival of the fittest wheather you like it or not.

Blue Ocean Strategy is a useful method to analyse opportunities and risks in the market for a product or service. The idea is to identify differentiatiors to attract new customers into your industry by solving a problem that other companies within your industry has overlooked instead of trying to compete on their terms. You can compare it with the telecom industry a couple of years ago when Sony Ericsson and Nokia amongst others were competing in who had the most advanced camera with highest number of megapixels when suddenly Apple came from nowhere and stealing market shares with a completely different approach witwith focus on usabiliy and using a simple camera module. Apple had the perspective of building a mobile phone as a computer instead of as a mobile phone as the traditional vendors had.

Blue Ocean Strategy (BOS) provides a systematic approach how to redefine market boundaries and finding new market segments with the goal of stop competing with rivals but instead making them irrelevant. The aim is to increase value and reduce cost which will result in great business for your customers but also to your company.

BOS can also be applied when doing competative analysis. The picture below shows a representation of the relative relationsship between consultancies of different sizes and how they apply to certain paramenters. The value 1-3 is just a relative measure so a score of 3 does not necessarily need to be better than 1, e.g. the Cost parameter is preferred to have a low value. What you want to see using this representation is that your product/service differentiates with the competition in key areas for your inteded market. Also try to come up with new parameters that the competition is neglecting in order to win over customers from other industries.

Interesting links:

http://www.blueoceanstrategy.com/index.php

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