Blue Ocean Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant

What is the context in which your product or service is used? What happens before, during, and after? Can you identify the pain points?

Value innovation places equal emphasis on value and innovation. Value without innovation tends to focus on value creation on an incremental scale, something that improves value but is not sufficient to make you stand out in the marketplace. 18 Innovation without value tends to be technology-driven, market pioneering, or futuristic, often shooting beyond what buyers are ready to accept and pay for

Blue oceans denote all the industries not in existence today. This is the unknown market space.

The only way to beat the competition is to stop trying to beat the competition.

ocean of bloody competition by creating uncontested market space that makes the competition irrelevant.

Blue ocean strategy challenges companies to break out of the red

Yet the overriding focus of strategic thinking has been on competition-based red ocean strategies. Part of the explanation for this is that corporate strategy is heavily influenced by its roots in military strategy. The very language of strategy is deeply imbued with military references—chief executive “officers” in “headquarters,” “troops” on the “front lines.”

Guy Laliberté is now CEO of Cirque du Soleil, one of Canada’s largest cultural exports. Created in 1984 by a group of street performers

Blue ocean strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. Instead of dividing up existing—and often shrinking—demand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition

QB House changed all that. It recognized that many people, especially working professionals, do not wish to waste an hour on a haircut. So QB House stripped away the emotional service elements of hot towels, shoulder rubs, and tea and coffee. It also dramatically reduced special hair treatments and focused mainly on basic cuts. QB House then went one step further, eliminating the traditional time-consuming wash-and-dry practice by creating the “air wash” system—an overhead hose that is pulled down to “vacuum” every cut-off hair. This new system works much better and faster, without getting the customer’s head wet. These changes reduced the haircutting time from one hour to ten minutes. Moreover, outside each shop is a traffic light system that indicates when a haircut slot is available. This removes waiting time uncertainty and eliminates the reservation desk.
In this way, QB House was able to reduce the price of a haircut to 1,000 yen ($9) versus the industry average of 3,000 to 5,000 yen ($27–$45) while raising the hourly revenue earned per barber nearly 50 percent, with lower staff costs and less required retail space per barber. QB House created this “no-nonsense” haircutting service with improved hygiene. It introduced not only a sanitation facility set up for each chair but also a “one-use” policy, where every customer is provided with a new set of towel and comb. To appreciate its blue ocean creation, see figure 3-4.