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September 19, 2014

How Blue Ocean Strategy Can Make Communications Firms More Profitable

The communications marketplace is a crowded one right now, with vendors introducing new service offerings almost by the day.

Yet, many of these new offerings are fighting over the same scraps of marketshare - trying to one-up each other and somehow stand out.

While some communications offerings might steal market share from others with a slightly better product or slick marketing campaign, fundamentally most firms are going after the market in the wrong way.

At least according to blue ocean strategy.

Back in 2005, a duo of INSEAD business school professors published a book entitled Blue Ocean Strategy, and the basic premise of their research was that the best companies (think Apple, Amazon and others we all write about endlessly) don’t compete in a crowded marketplace—they create a new markets where they aren’t having to compete.

This makes sense if you think about it: You can compete for a slice of the pie, or you can bake a bigger pie. Or to use their analogy, it is like living in a blue ocean that is clean and unpolluted instead of in a red ocean that is teeming with competition.

Blue ocean strategy outlines four ways that businesses can develop new markets instead of competing in crowded old ones, and communications vendors could learn from this list.

It includes eliminating factors that generally are overlooked and taken for granted, reducing factors below the industry standard when these standard practices are needless, raising important factors above industry standards, and offering new factors that have never been offered before—what we usually think of as innovation.

Communication service providers can take a hint from this strategy by not trying to win over the competition through the use of the same marketing message that every other solution uses.

Yes, we know many of today’s communications offerings including WebRTC and other real-time communications solutions can be easy. We know it can be embedded in all sorts of devices and services and web sites. But what does this really deliver for the customer that isn’t already being delivered by the competition?

Amazon’s Mayday feature in its Kindle e-book readers was an example of blue ocean strategy and how it can be applied in the WebRTC space. Amazon eliminated a factor that the industry took for granted, which was that there needed to be two-way video. It simplified the communications below industry standards by just focusing on video and screen-share. It also raised the standards by including a button on all new Kindles that accessed this real-time feature.

Real-time communications does not have to look like every other offering in the space. These four techniques can be applied to marketing the offerings in a new way for a new audience, much as Amazon has done. And, more fundamentally, this strategy of seeking out new markets for the technology can help companies make Apple-like profits and innovation from real-time communications.

Think different. It was Apple’s marketing slogan a few years back, but it also is the key to succeeding in the crowded communications marketplace. 

Edited by Stefania Viscusi
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