Blue Ocean Strategy – Creating A Demand

When Bhavish Agarwal(CEO and co-founnder of Ola cabs) was asked about his vision behind his company , he said “In a deeply fragmented and highly unpredictable market of car/taxi services, there is a significant shortage of easy and comfortable on-ground options for transportation, be it within a city or outside.The vision behind Olacabs is to provide hassle-free, reliable and technology-efficient car rental service to Indians.”

Today Ola cabs has greatly captured the transportation market posing a threat to the conventional means of transport which includes cabs , buses , autos etc.The strike by the autorickshaw drivers in Nagpur is a clear evidence of this.
Not only this , but many new ideas are fast turning into startups in our country and we are rightly being called as ‘ a country of startups’. A common feature with all these startups is that they have created a demand in a totally unknown market space , untainted by competition. Such market places are known as  the blue oceans . Blue oceans basically denote all the industries which are not existant today and are open to be explored.Such industries have enormous opportunity of growth and profits.

The business universe consists of two kind of market places – blue oceans and red oceans. As compared to blue oceans, red oceans denote all the industries which are already in existence today. In this market place the boundary is defined and the different players in the market compete with each other to grab a larger market share and thereby decreases the prospects of profit and growth of every player. It is called red ocean signifying the fierce competition between the players.

But unlike in red oceans, in blue oceans demand is created rather than fought over.

Blue oceans can be created from within a red ocean too by altering the boundary of an existing industry or it can be created by giving rise to completely new industries.

The industries like ecommerce, radio cabs which are a part of the existing market , were a part of this blue ocean market place about a decade ago.They were successful in identifying the need in the market and then they succesfully created a demand in the market for their services which people were in need of. This shows that the blue oceaon market place has always been existent. The prospects in established market places are declining rapidly and those of the new industries (the blue oceans is increasing).

Hence to succeed in the current market it is required to identify an uncontested market space , create and capture new demand and create a difference in the existing market environment.