Applying the Blue Ocean Strategy in a Competitive Marketplace

Consider you’re a new tech startup aiming to develop a mobile payment app. However, you find out that the market is already crowded with numerous competitors such as PayPal, Square, and Venmo. To stand out and succeed in this intense competition, your startup decides to adopt the Blue Ocean Strategy.

Blue Ocean Strategy: What is it?

The Blue Ocean Strategy is a framework that encourages businesses to create and capture uncontested market space instead of competing in an existing industry. The goal is to make competition irrelevant by carving out a unique market niche. Here’s a brief rundown of its elements:

1. Eliminate: What factors that the industry takes for granted can be eliminated?
2. Reduce: What factors should be reduced well below the industry’s standard?
3. Raise: What factors should be raised well above the industry’s standard?
4. Create: What factors should be created that the industry has never offered?

Why Apply Blue Ocean Strategy?

With the Blue Ocean Strategy, you can separate your business from competitors, appeal to a new set of customers, and avoid a price war. In the case of your mobile payment app, this strategy helps you move from the red ocean of severe competition with established players to a blue ocean of uncontested market space.

How to Apply the Strategy?

1. Eliminate: Remove expensive service fees that most competitors charge for transactions.
2. Reduce: Lower the costs of international transactions, which are usually quite high in this industry.
3. Raise: Improve the level of security, as it is a common concern for users of mobile payment apps.
4. Create: Introduce an all-in-one financial management feature that allows customers to track their spending, saving, and investment within the same app—an offer that other mobile payment apps do not currently provide.

Conclusion

By applying the Blue Ocean Strategy, your tech startup can find unique ways to differentiate your mobile payment app from the existing competitors. This approach not only allows you to create a distinctive value proposition but also paves the way for your startup to become a leader in an entirely new market space. By creating an uncontested market through innovation and value-addition, your startup can flourish exponentially.