August 3, 2015
Blue Ocean Strategy
According to "Blue Ocean Strategy" (2015), "Blue Ocean Strategy challenges everything you thought you knew about strategic success and made competition irrelevant". The blue ocean strategy marketing approach is set up to create a new market in an existing overcrowded market. Because the product or service exists in this new market without any competition, there is an opportunity to turn a profit at an accelerated pace. The importance of blue ocean strategy has grown in recent years with the advancement of technology and global development. Offering a product that does not have a market allows companies to build a strong brand and increase profits.
In 1999, TiVo, Inc. decided to open a new market space with the release of its digital recording device (DVR). Named after its parent company, TiVo allowed users to record their favorite television shows and store them on a hard drive and watch at their leisure at any time. There was no other product like this on the market, which is why it was a blue ocean move. TiVo also gave users the ability fast forward; rewind and pause live television, a unique feature that they patented. TiVo completely changed the way consumers watched T.V. Other features included "season pass" which allowed users to record every new show of a series and "wish list" allowed users to search and record shows that matched their interest by title, director, actor, category or keyword. Prior to TiVo creating this market, the only on-demand viewing options were VCR and DVD recorders. These devices were unpredictable and lacked the "smarts" that TiVo offered. Consumers now had more time to spend with family and friends because they were no longer rushing home to watch their shows. The popularity of TiVo grew, and other companies began to enter the market. Today, DVR service is standard with most cable packages. Providers like Comcast and Verizon offer this service utilizing a third party distributor for the DVR boxes. Red Ocean Strategy
Unlike the blue ocean that leaves the crowded market to create a new one, the red ocean creates products or services in the well-established market. It didn’t take long after TiVo’s release for competitors to enter the market. There are a few benefits to taking this route. Companies can upgrade an existing product based on the feedback from consumers. Entering the market through the red ocean eliminates the trial and error phase because similar products are already on the market. The demand has been established, which eliminates the need to "educate" consumers about the product/service. The downside to entering the market this way is companies have to compete with more established brands. After TiVo’s release, the market began to see…