Red ocean or blue ocean? How to survive in a sea of competitors
Creating a new market requires creative spirit, a keen ability to observe the context, a far-sighted outlook and, as always, a good dose of luck
by Luca Brambilla*
It's the beginning of the 2000s. The queue runs slowly in front of the counter, between coloured plastic cases displaying the titles of the most popular films. This is how it works: for a movie night at home, you have to go to a video store, remembering to return the rental within the deadline to avoid penalties. An entrepreneur, Reed Hastings, understands before anyone else that rentals are the past: the future is the Internet, with films accessible everywhere thanks to the potential of the web. Although the technology is not yet ready, Hastings moves ahead, starting to acquire the rights of the major film companies. A strategic move that will lead to worldwide success in 2007, when his company launches the first streaming platform for films and TV series: Netflix. A revolution, as well as an emblematic example of a film strategy, he is also a pioneer in the field of video and TV.
An inviting sea
La strategia Oceano Blu (Blue Ocean Strategy) è descritta nell’omonimo libro dei professori dell’Istituto INSEAD W. Chan Kim e Renée Mauborgne, nel quale il mercato economico viene rappresentato alla stregua di un mondo sommerso da due tipi di oceani: gli Oceani Rossi, cioè i settori già esistenti e caratterizzati da un approccio tradizionale in cui chi vi opera cerca di superare le performance dei competitor, e gli Oceani Blu, ovvero spazi di mercato ancora inesistenti dove i confini non sono ancora delineati. In questi ultimi anziché battersi contro la concorrenza si dà vita a un nuovo campo da gioco con regole inedite, acquisendo un inestimabile vantaggio competitivo e aumentando la redditività nel lungo termine. Un punto di forza che va tutelato con adeguate barriere all’ingresso, visto che nel primo periodo si diventa di fatto monopolisti e si può beneficiare di ciò che tecnicamente viene definito “interdipendenza vincolante”: il consumatore che desidera usufruire di quello specifico p
Also not to be underestimated is the increased involvement of all corporate stakeholders: from the internal ones, motivated to contribute to a revolutionary work, to the external ones, attracted by the economic opportunities of an as yet unexplored market. It is no coincidence that giants such as Paramount, Sony and Disney sold their rights to Netflix without much resistance.
The risk of drowning
Starting a business in an innovative sector, therefore free of competition, is the dream of any aspiring entrepreneur. However, no strategy is infallible, as there is no universal recipe for success: if one aspires to sail into a Blue Ocean, it is therefore essential to equip oneself with the necessary equipment and be fully aware of the risks and limitations.
Creating a new market requires a creative spirit, an acute ability to observe the context, a farsighted outlook and, as always, a good dose of luck. The scientific literature points to the survivor's bias, a cognitive error that leads to overestimating the chances of success and underestimating the risks of enterprise. This is because one is generally exposed to the few cases of extreme success - sometimes emphasised by news stories - while remaining unaware of the insurmountable avalanche of failures. Who knows how many aspiring entrepreneurs have had insights as good as Hastings' without ever enjoying its own glory.
