The difference between number one and number two is typically rather significant. The leaders, those who Break from the Pack of Commodity do so by challenging the typical norm, with courage, absent fear. The metaphor of red and blue oceans describes the market universe. Red oceans are all the industries in existence today—the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of product or service demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities or niche, and cutthroat competition turns the red ocean bloody.
Blue oceans, in contrast, denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored.
The corner-stone of Blue Ocean Strategy is ‘Value Innovation’. A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. The innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.
Companies who successfully develop a distinctive brand and product are able to redefine the product they sell. Apple does not sell computers. Harley Davidson does not sell motorcycles. VW does not sell cars. What do they have in common? The sell the lifestyle and the products that provide that lifestyle. They reaffirm for their customer that they understand them and that they offer what it is that makes them unique and special.
1) Which factors in the Apartment Rental Industry that are routinely taken for granted should be eliminated?
2) Which factors in the Apartment Rental Industry should be reduced well below the industry standard?
3) Which factors in the Apartment Rental Industry should be raised well above the industry standard?
4) Which factors in the Apartment Rental Industry should be created that the industry has never offered
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One Response
I just finished reading Blue Ocean Strategy (W.Chan Kim & Renee Mauborgne) and your post pretty much sums up the 200+ pages hardback book.
My company is in the process of creating demand with a service not previously offered in the apartment rental industry. Our challenge is encouraging adoption with site-level management, even though corporate executives recognize value in the quality and time-saving factors our technology delivers.
If you look at the National Apartment Association (NAA) supplier lists you’ll find multiple companies providing the same product or service, some with a slight twist. Although not an innovative way to operate, it seems this industry lends itself to traditional products and services that are familiar and easy to adopt.