Blue Ocean Strategy: A game-changer in the post-pandemic business world
In this pandemic, when a large number of businesses have already collapsed and numerous are in the queue, the sailor can still save the business from drowning by taking a major risk to shift the boat from the red ocean to the blue; which is theoretically known as the Blue Ocean Strategy. In fact, a blue ocean strategy can play a “game-changer” role for an existing or a new business to step ahead of the competition in the new normal post-pandemic situation.
It is important to understand the key elements of this approach before deciding how to apply the Blue Ocean Strategy. The basic idea of blue ocean strategy theory is to create a completely new market and new demand. This refers to turning non-customers into customers by capturing uncontested market space. This is how businesses make the competition irrelevant. Another core principle of this approach is to ensure a balance between differentiation and low cost. Four vital actions- eliminate, raise, reduce, and create, are involved in proceeding blue ocean strategy that can reconstruct the market boundaries. But can blue ocean strategy actually be a game-changer for a business in the new normal business world? To answer this, business leaders first need to solve two vital questions- “what?” and “how?”
It is essential to figure out what changes are expected in the industry after this pandemic through thorough observation, data collection, and calculated research output. Many experts have already predicted some of the drastic changes in the post-pandemic business world. A significant technological change will be noticeable in many sectors. Already many people and organizations have adapted to distance learning and remote working, along with telehealth service and online entertainment. Uses of 5G, robotics, and drones will give a new dimension to the supply chain of businesses in the new normal. Also, several trends will be evolving post-pandemic consumer behavior. Online shopping will get the highest preference by the consumers and subsequently, in-store-visits will be avoided as much as possible. According to the Global Web Index, almost 50% of the respondents will be maintained for a certain time even after the pandemic. In addition, consumers are expected to be more economized and concerned about experience, privacy, stories, and social wellbeing. Another important fact business leaders need to remember is that there will be some major shifts in the global economy. According to a professor of economics at Columbia University, Joseph E. Stiglitz, to develop a more flexible and less myopic economy, nations will put all-out efforts to create a decent balance between globalization and self-reliance.
The next and most crucial step for business leaders is to crack how to implement a blue ocean strategy for sustainable and profitable growth by overcoming all the challenges. It begins with finding the right scope and developing the right team. In the current world, it is very difficult to spot the blue ocean. On top of that, now there are hardly any barriers for new entrants to enter the market and make the ocean red by initiating competition. Therefore, it is necessary to act immediately. Considering the major shifts awaited after the pandemic, after discovering the blue ocean, managers can use the “Pioneer-Migrator-Settler Map (PMS)” tool to detect the pioneers. Pioneers are the most powerful source in this map for profitable growth as these offer unprecedented value to buyers. It is also very important to understand the current state of the company to construct the right team and initiate any further steps. The predicted technological shift after the pandemic can be a great challenge for many businesses as a recent study shows that a number of leaders are still struggling to understand and cope-up with the complicated digital system and thus the upcoming trend of remote working can also be an issue to develop the right team to carry on the strategy. A proper SWOT analysis of physical, intellectual, financial, and human resources will help a business to understand its present condition. At the same time, businesses need to identify the hidden opportunities behind the present limitations which means identifying “Pain Points”. Pain points refer to the specific problems faced by potential customers currently in a marketplace. Because of this pandemic, many consumers are already facing several issues because of a sudden shift to the digital system such as privacy issues, information and culture gaps, surge to virus racism, over-expenditures, etc. and these issues are needed to be addressed. Since a core purpose of blue ocean strategy is to create a new market, leaders require to discover the noncustomers in the ocean by examining a widely used analytical framework, “The Three-tier of Noncustomers”. After that it is time is to systematically transform market boundaries following six basic approaches, also known as the “Six Paths Framework”. The final vital step is to launch a blue ocean strategy. A dead-on move can be a game-changer for business. In-depth market research is necessary to understand post-pandemic consumer behavior. Also, it is mandatory to conduct agile development in case of product development and rapid test marketing before launching the blue ocean strategic move to maximize the potential and ensure sustainability.
COVID-19 will change the business world completely. From past pandemic experiences, a recent study predicts that after the pandemic there will be blue oceans splashing up everywhere. It means there will be multiple opportunities to give rebirth to the existing businesses and an excellent start to new businesses. Therefore, if business leaders are able to identify the gap at the right time and take immediate action with the right team, blue ocean strategy can be a game-changer for their businesses in the post-pandemic new normal business world.
