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What do you think it would be like to practice in an environment free of competition? How about having a complete lock on a market?
If you haven’t read the book Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne, I would recommend you do so. This intriguing book on business development describes the competitive landscape that exists for most businesses and describes it as doing business in a red ocean.
In a red ocean business model, products and services become increasingly similar, and cost starts to become more important differentiators in the consumer’s mind. Red oceans promote commoditization as increasingly similar features from competitive companies are pitted against each other.
Blue ocean strategies are based on a completely different philosophy. In a blue ocean strategy, companies pull out of the competitive red oceans and thrive in a blue ocean. That is, an ocean not saturated with competition, but one that opens a segment of a market to new customers.
Chrysler’s minivan changes the market
One of our favorite examples of a blue ocean strategy is that of a car company in 1984 on the verge of bankruptcy. At the time, Chrysler was in dire straits. Prior to this time, auto manufacturers made cars, station wagons, and large vans. That was until Chrysler produced the first minivan in 1984 and revolutionized the auto industry.
Before its creation, consumers would have never found value in a minivan. Why would they need one? If they wanted a van, vans were available on the market to purchase. And if they wanted a car with a little extra space, a station wagon fit the bill.
But in 1984, Chrysler changed everything by defying logic and bringing the minivan to market.
Since then, Chrysler has experienced unprecedented success with the minivan. It took years for other car manufacturers to even begin to compete in the minivan market. Even once they entered the market, it was difficult to build a similar brand loyalty that Chrysler’s minivan commanded. With the creation of the minivan, Chrysler created a blue ocean business model.
So are there blue ocean strategies available within optometry?