A “blue ocean strategy” refers to the process of finding low competition or no-competition markets for established or new products, giving companies a firm control of over price and positioning.
The Downsides of Red Oceans
In contrast, “red oceans” can have a large number of competitors or a few dominant ones. They tend to result in winner-take-all scenarios, where one company gains an effective monopoly and renders competitors inert. A red ocean market representing finite business opportunities, requiring larger and riskier investments to succeed.
Advantages of Blue Ocean Strategies
For patent holders, blue ocean strategies are an effective way to generate revenue with existing technologies and serve customers in unique ways. This is particularly true of formerly keystone technologies that have exhausted their original opportunities or represent incremental but substantial progress in an unrealized area. This was the case for GPS products before search engines made them maps.
These factors make for optimal opportunities for smaller or niche firms competing with established technologies in red ocean markets to succeed in blue ones. They can benefit from being closer to the customer and are able to gain insight and act quickly.
Building a Blue Ocean Strategy with Landscape Analysis
The importance of total organizational commitment to a blue ocean strategy is key. While not absolute, it is no secret that C-suite executives can be myopic about business problems, making it hard to see new opportunities. Find new ways to leverage the knowledge and experience of your customer service, R&D, and middle-management departments to uncover actionable insights.
Those who successfully enter blue ocean markets typically find themselves less beholden to market pressures, like the pace of technological change, and can significantly extend the utility of their own patent portfolios.
Planting Your Flag in a Blue Ocean Space
Entering blue ocean markets is fundamentally a process of devising new uses for existing technology, as compared to developing new technology. It can involve some level of customizing and optimizing a current product or service line but this isn’t a requirement. It often involves leveraging areas of a business not previously leaned on internally, such as sales, marketing, or customer service. Even if there are technological tweaks that need to be made to enter these new markets, the distilled insights from these departments can accelerate adjustments that would otherwise take time to develop and test.
Strategies for Blue Ocean Success
One emerging strategy for entering blue ocean markets is to develop taxonomies of technologies and portfolios that represent a hierarchy of opportunity. Understanding the need for technology is one thing; uncovering a market for it is another. While some technological domains seem to support blue oceans more than others at face value, such as UX/UI innovations (due to their broad potential application and typically siloed use), savvy organizations can perform this categorization and ranking of opportunities for a range of technologies.
A recent example clearly illustrates what this means and how it can be applied. Many manufacturers, including liquor distilleries, found themselves in a precarious position at the onset of the COVID pandemic. A strong economy had the industry doing well, but when it hit, a simple downshift in production was not an option.
While their facilities could have been converted to meet a number of market demands during the pandemic, they were able to adjust to this new reality by simply manufacturing and distributing hand sanitizer. In some cases, they not only had access to new markets but were also able to take advantage of government incentives.
This example works because not only did they create a new product but had to market, package, and label their product differently, while meeting new safety measures. This may not seem like the best example because it involves an unnatural and spontaneous shift in the marketplace unlikely to be replicated in the future. But this is all the more reason to ensure your landscape analysis and taxonomy reflect macro-level insights that consider shifting economic grounds. For instance, major policies from state and federal governments can have this effect, such as the recently passed infrastructure spending bill.
Build a Blue Ocean with IP.com
A key part of any blue ocean strategy will involve a competitive and patent landscape analysis using search and database tools that span all major legal, commercial, and IP literature sources. Identify prior art, ownership information, and gain unique competitive insights. IP.com’s robust tools can help spark the search for blue ocean opportunities. Search millions of citations or zero in on prevalent technological or business domains to better understand patent applications and lifecycles. Identify the concepts and language used by those currently engaged in the space to better use IP.com’s semantic search tools or start developing patent language that avoids future conflicts.