Differentiate your strategy
Why differentiation
In an established market and with heavy competition, different and new value proposal can help the company to expand his current market. This helps to gain competitive advantage, higher rentability. But it has some drawbacks, for instance:
- Quality shall be always a priority even tough the differentiation is done by he price.
- You may need to adapt branding or new product name, to avoid customer to be lost and to affect the existing proposal.
- You may need to acquire new companies to expand abroad. It can have a huge cost but it can have some benefits to use the existing people strength and cultures.
Examples of key direction for differentiation:
- High value added products bring always better revenue to the company compared to mass market product.
- Industrialisation and robotisation of your process to produce faster, and bigger
- Add new service to your product
To succeed in the differentiation, to gain competitive advantage, the offer should satisfy 3 conditions:
- The offer shall have a significant value for the customer
- It shall be economically viable for the company
- The offer shall be defendable in front of the competitors trough protection, trade secret practice, etc…
Blue ocean strategy
The blue ocean strategy consists in identifying new business opportunities to create a new market. This strategy is helpful when an existing market is satured.
1. Identify Current Market Boundaries (Red Ocean Analysis)
Steps:
- If you are in an defined market, identify your competitors
- Draft the value added criteria, function, product for the client in the market. Cf below example.
- Identify new criteria where your competitor is not present for the same application
Examples:
New vine cut with fruits perfume
Instead of selling tires, membership can be created for dedicated professional platform, to handle all the constraints from the client.
2. Use the Four Actions Framework (Eliminate-Reduce-Raise-Create)
To differentiate your business, ask:
Other example:
Example: Apple iTunes eliminated CDs, reduced illegal downloads, raised convenience, and created $0.99 digital songs.
3. Identify Unmet Customer Needs (Non-Customers)
Instead of fighting for existing customers, look at three tiers of non-customers:
Nintendo Wii attracted non-gamers (families, elderly) by simplifying gaming.
4. Use the Strategy Canvas to Visualize Your Position
A strategy canvas compares industry competitors on key factors:
1️⃣ Identify key competitive factors (price, quality, speed, convenience).
2️⃣ Plot existing competitors (similar value offerings).
3️⃣ Create a unique value curve (offering different or new values).
Example:
Tesla removed traditional dealerships, raised autonomous driving, and created direct-to-consumer sales.
5. Test & Launch Your Blue Ocean Strategy
✅ Prototype & Validate – Get customer feedback early.
✅ Refine & Scale – Optimize for profitability and efficiency.
✅ Protect Your Market – Build barriers to entry (brand, patents, partnerships).
Example: Uber disrupted taxis with convenience, app-based booking, and cashless payments.
📌 Final Checklist for a Blue Ocean Strategy:
- Does it eliminate industry pain points
- Does it offer a unique, high-value proposition?
- Does it attract new types of customers?
- Is it hard for competitors to copy?
