Companies in competitive environments looking to pivot to a blue ocean strategy must consider a number of factors to determine their likelihood of success. While blue oceans can represent lucrative markets, strategy, preparation, and good timing are often necessary to make the most of them. Not only is it important to identify new revenue streams but to pivot to them quickly and without reorienting the entire business or changing your product.
Blue Oceans Aren’t Just White Spaces
While the term “white space analysis” can mean different things, it is important to understand how it generally relates to blue oceans. They require different strategies. A white space analysis examines the patent landscape for areas that have little-to-no activity.
Blue oceans, on the other hand, involve radically applying an existing product or technology in a way that meets a new need and serves new customers. An example might be the way liquor distilleries pivoted to hand sanitizer during the early days of the pandemic. With essentially the same product, they were able to solve a totally different problem for a new market. People who drink liquor clean their hands but the two bear no relationship to one another. Sanitizer and liquor come in different bottles, in different aisles of the stores.
Small Changes vs. Big Ones
The liquor example is useful because it highlights an important question of any blue ocean strategy: How much are you willing to modify your product to reach an untapped market?
Answering this question has important implications for your blue ocean strategy as a whole. It is the next step in determining whether or not this pivot is viable. Ideally, your strategy should include minimal (or no) changes to a product. While, as in the hand sanitizer example, there was a willingness to manufacture and market the product differently.
What constitutes a big change can depend on a number of factors but it generally rests on two things:
- Does your product require a new feature or functionality to meet the proposed need?
- Does your company have to change its manufacturing process to make this change?
If you’re able to modify the output or quality of the resulting hand sanitizer with a small tweak to these processes, this could represent an opportunity to get big results with a small change.
Create an Opportunity Taxonomy
Fundamentally, this involves comparing the cost of seeking an opportunity with the potential revenue it can generate. Each should be ranked according to the cost and difficulty involved in deploying it to the new market.
As liquor companies prepared for the pandemic downturn they were likely faced with the following questions before switching to producing hand sanitizer:
- What product processing materials do I have?
- Do I have the equipment and staff to make changes quickly?
- Does that equipment have to be modified?
- Can I sell my new product with a similar margin to the old one?
While not a complete list of steps, this example demonstrates part of the workflow involved in generating a blue ocean strategy.
Answering these questions helps understand what makes the pivot to hand sanitizer the right business decision. Hand sanitizer can be made from ethanol, the same alcohol we drink. But it is in a different formulation but the process of creating it is essentially the same. It, therefore, does not require an overhaul of a manufacturing process or additional ingredients.
This strategy was effective for liquor companies, not just because they met an important health need during a pandemic but because like likely had an excess inventory of raw materials and needed a way to profit from them during the downturn.
However, alcohol precursors also are used to make bread with the addition of a few simple ingredients. You can sell bread and bread was necessary during the pandemic. But to sell bread you have to bake bread. Baking requires ovens and a staff that knows how to operate them to create a consistent quality product. It also involves a low margin on the cost of the initial ingredients, plus a new one of flour. So while selling bread could theoretically be a part of distillers’ blue ocean strategy, it would not be higher on the list than hand sanitizer.
Perform a Landscape Analysis
Technology and manufacturing companies face additional tasks when preparing this strategy. They must first review relevant patent and non-patent literature to examine which, if any, competitors exist in a space. If so, how are they currently meeting their customers needs?
Alcohol and bread have competitors, but in a true blue ocean strategy, they wouldn’t. Ideally, they would find that not only does prior art not exist for their specific invention but that the market is indeed void of practical and affordable solutions for customers.
IP.com has a number of solutions that can assist in this goal, automating and eliminating difficult and arduous steps. Our tools also visualize key data points to help generate deep insights and make the case for your blue ocean strategy.
While conventional liquor distillation is not a patented process, some versions and variations of it are. The IP.com suite of tools can help you determine whether the example company’s alcohol distillation process for hand sanitizer qualifies for a patent. If it doesn’t, does their distillation process represent novel use in the hand sanitizer space?
IP.com’s InnovationQ Plus® and IQ Ideas Plus™ are both enabled by natural language processing for concept-based search, allowing you to scan millions of documents and uncover relevant prior art instantly. If you discover that no prior art exists for the new use case you intend for your technology, you can assess whether your patent for the invention you plan to repurpose includes that use case.
If it does not, or your idea is not yet patented, you can use IQ Ideas Plus 2.0 to evaluate the novelty of your idea and then evaluate its eventual patentability. Can support the writing of a strong and broad patent at the initial filing, covering a number of use cases in anticipation of an eventual blue ocean strategy.