Part III, New Product to a New Market: Red or Blue Ocean? Or Both?

If you're leading a business unit or product group trying to innovate within a large company, which market approach should you use?

The proven but competition-saturated "red ocean" or the untouched "blue ocean strategy?" Or both simultaneously?

The answer might be red or blue, but not both.

In my previous post about large company groups, I discussed the tendency to gravitate towards broadening your market approach with your existing product in a new market(s). This approach may seem logical; your product already has a proven track record, and you can tap into existing market spaces where demand is already established, aka a red ocean.

But this strategy comes with unforeseen problems: Unknown Unknowns.

A "red ocean" involves intense competition, potential price wars, and the need for incremental improvements as businesses fight over the same pool of customers in a crowded, saturated market. This need for incremental improvements to your existing product often leads to a different conclusion –  that you need a new product for the new market.

Launching a new product in a new market is one example of a blue ocean.

It's also the ultimate Unknown Unknown. Introducing a new product into a new market means creating demand for something customers haven't yet imagined they need. This scenario demands vision, patience, and a willingness to educate the market while crafting the tools, messaging, and strategies to transform potential into reality. It's not just about building something new – it's about making others see why they can't live without it. After all, the idea of a personal computer in every home (never mind in our pockets) was once unthinkable. Likewise, lasers were once considered an academic novelty with no practical use.

Perhaps the blue ocean's blank canvas is the obvious winner?

On the other hand, the red ocean is easy to define.

Your potential customers know why they want that technology and what they will do with it. Their budget already exists!... But it's also already spoken for. They already have their favorite manufacturer. Competitive pressure has pushed pricing to the bare minimum, yet that seems to be their only negotiating point as they fight for the same customers. What money-making differentiator can you propose so they'll be willing to endure the "pain of switching" costs?

By definition, red and blue oceans are opposite scenarios and require entirely different market strategies. Red oceans are fiercely competitive but more straightforward to understand, while blue oceans require that you think like a startup.

Do the early research to choose the best ocean. Then, find the team to help you navigate it.

Our world-class team at Market Operandi has developed a system to lead you to the right solution for the right market(s) with a team aligned across functions. The MO team has successfully led innovation groups at large companies such as Intel, ZEISS, IBM, and ThermoFisher (FEI) and guided many MO clients through this strategy and market penetration processes.

Contact us to start a conversation about your new product strategy.