Recently, I was reading about something called “Blue Ocean Strategy.”
The notion is that in pursuing differentiation, an organization’s aim is “not to out-perform the competition in the exiting industry [and to fight it out turning the oceans blood red), but [rather] to create a new market space or a blue ocean, thereby making the competition irrelevant.”
While I like the ocean’s metaphor and agree with the need for organizations to innovate and create new products and services (“blue oceans”), I think that competition (“red oceans”) is not something that is inescapable, in any way.
In profitable industries or market spaces, competition will enter until supply and demand equilibrium are met, so that consumers are getting more or less, the optimal supply at the requisite demand. The result is that organizations will and must constantly fight for survival in a dynamic marketplace.
Moreover, as we know, any organization that rests on its past successes, is doomed to the trash heaps of history as John Champers, the CEO of Cisco stated: It’s “easy to say we’re the best…we don’t need to change, but that’s exactly how you disappear.”
In essence, while we may wish to avoid a duke-it-out, red ocean strategy, every successful innovative, differentiation-driven, blue ocean strategy will result in a subsequent red ocean strategy as competitors smell blood and hone in for the kill and their piece of flesh and cut of market share, revenue, and profit hide.
To me, it is naïve to think that blue ocean and red ocean strategies are distinct, because every blue ocean eventually turns blood red with competition, unless you are dealing with a monopoly or unfair competitive environment that favors one organization over any others.
The key to success and organizational longevity is for innovations to never cease. When innovation dries up, it is the moment when the organization begins their drowning decent into the ocean’s abyss.
So as with the lifecycle of all organizations, blue ocean strategies will eventually result in red oceans strategies. Once this occurs, either the organization will leverage their next blue ocean strategy or bleed red until their body drains itself out and dies off—leaving the superior organization’s blue ocean strategy to carry the day.
Together, blue oceans and red oceans—drive the next great innovation and healthy competition in our dynamic, flourishing market.
(Source Photo: here with attribution to freezingmariner)