![]() June 1, 1999 Napster was launched and among it several other piracy services that provided download access to millions of tracks for FREE. The music industry – artists and record labels – were negatively affected by this trend.Īpril 28, 2003 Apple launched the iTunes store. Here are the facts and list of events presented in a chronological order to showcase how Spotify tapped into the Blue Ocean: Spotify was able to create uncontested demand and a new industry by itself, the music streaming industry. ![]() To reach the Blue Ocean, a company must combine value with innovation in what they offer and that is because “Innovation without value tends to be technology-driven, market pioneering, or futuristic, often shooting beyond what buyers are ready to accept and pay for." In other words, in the Blue Ocean demand is created instead of competed for. Most business schools teach tools that aid to compete in red oceans, such as the five forces for analyzing existing market conditions.Ī Blue Ocean on the other hand represents industries/markets not in existence today, it is yet to be known, and there are no set rules to play by. An example is the telecommunications industry where demand is unchanged and consumers benefit as competitors aggressively compete for market share. The more an industry gets crowded, the company’s margins decrease and the ocean gets more bloody. Companies try to outrival each other by increasing their market share of flat unchanged demand. The rules of the game and the players are defined. ![]() ![]() To explain better what a Blue Ocean represents, I will first briefly define the term "Blue Ocean" and next I will provide an example that is not directly mentioned in the book and is more relatable to most of us, Spotify.Ī Red Ocean is a representation of all the industries/markets in existence today. This book gives you the framework and invaluable tools to find your company’s Blue Ocean strategy. ![]()
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