The danger if other firms imitate your blue ocean strategy
If you are considering a blue ocean strategy, it is important to recognize the danger of other firms being able to imitate your approach. A blue ocean strategy intends to create a new market – free of competitors. This allows your company to step aware from ‘red oceans’ – markets where there is substantial competition between a set of firms all competing on the same dimensions.
However, while there are many benefits from operating in a market without other competitors, these benefits start to erode if other companies are able to enter your market. A market that may begin as a blue ocean can quickly become less attractive if other companies, transforming your opportunity free of competitors into much more intense competition.
Can other firms move: What are the mobility barriers?
When considering if your blue ocean is likely to remain blue, it is useful to consider mobility barriers that your competitors would face in changing their approach to move into your blue ocean. Mobility barriers consider the difficulties that other firms would face in changing position – whether they can reconfigure their resources and capabilities to move, or whether their branding is inherently incompatible with the new market.
Are you able to build-up a first move advantage?
Another component influencing whether you are likely to be able to maintain your blue ocean is whether by going first you are able to build a first-mover advantage. If you are for example able to build resources that others are not able to easily imitate. Potentially you are able to acquire resources or establish a brand early on, that it would be difficult for other firms entering at a later point in time to be able to acquire.
Can you continue to move to new blue oceans?
Another approach to defending your blue ocean is to continually move into new blue oceans. If you are able to identify new dimensions to compete on (and particularly if they are dimensions that themselves would be difficult for your competitors to imitate), you can potentially stay ahead of encroaching competition.
The blue ocean and red ocean metaphor is a powerful business concept – this article explores key differences between the markets.
This article explores identifying blue ocean strategies – markets without fierce competition – and the importance for startups.
The blue ocean strategy approach of identifying or creating a new market space free of competitors sounds attractive, it also has a lot of risks associated with it. This article examines four of the main risks associated with a blue ocean strategy.
This article explores red ocean strategies – competing an existing market – and the limitations of red oceans relative to blue ocean strategies.
How do you identify a blue ocean strategy? This article explores a key approach for identifying blue oceans – the create, raise, eliminate, reduce framework
This article explores the role of entry barriers and mobility barriers at preventing new firms from entering your market, or existing firms from converging on your position.
This article explores how the 4Ps -product, place, price and promotion – connects in with other key strategic decisions a firm needs to take.
This article explores ways of breaking strategic tradeoffs – supposed incompatibility between two competing alternatives.
This article explores the importance of strategic distinctiveness, and how it allows you to step away from direct competition.