enterprises, like people, have fragile infancy, tentative adolescence, fast-growing adolescence and stable mature adulthood. However, when an enterprise reaches its prime, there will be two routes: one is to follow the rules, maintain its original business and strategy, and be busy coping with increasingly fierce market competition; The other is to let go of the burden of the past, jump out of the mindset, look for new opportunities, and actively seek transformation < P > Most enterprises that choose the first road are caught in vicious competition and gradually get old. And those enduring great enterprises have almost taken the second route.

Although Porter's three basic competitive strategies are very practical, they have been textbook classics for nearly forty years, and every enterprise knows them very well. But if everyone adopts the same strategy in the same market, it will become vicious competition, and everyone has no choice < P > For example, there is only one gas station in a city, and the price is all decided by him, so he can earn 51% profit. Later, when five gas stations were opened, there was competition, and the price dropped. Everyone earned a little less, but they all made money < P >. The vicious competition was that a small city opened 111 gas stations at once, which seriously exceeded the demand. If everyone divides the customers equally, everyone will go out of business. In order to survive, gas stations can only sell at a loss, and the last 91 companies can't bear to close down, and the remaining 11 companies start to make money < P > Whether managers run enterprises or individuals choose career paths, it is very easy to make the mistake of going with the flow and stepping on the cruel competition of crossing the wooden bridge with thousands of troops. In fact, the Red Sea is everywhere in life and work. If you want to find a breakthrough that others can't find, you must find a unique advantage that is conducive to competition.

The difference between the red sea and the blue sea sounds simple, but in reality, the market does not label itself with colors, and there is no obvious boundary. The nascent blue ocean market may become a red sea market because competitors come to grab jobs. Unfortunately, many managers are not sensitive enough to this, and they always think that "my business is quite profitable now, and it is too hard to' transfer positions'", and they will regret it until they are deeply involved in the Red Sea

Therefore, before explaining the two strategies of red sea and blue sea, we should first learn to distinguish three market red lights as early warning signals to judge whether they are in the Red Sea market

When judging the Red Sea market, if only one red light appears, it means the Red Sea. Maybe the current profit is passable, but there will be a fierce battle soon. At this time, it's best to plan ahead and look for the potential blue ocean.

When two red lights are on, it means that the Red Sea market has arrived, and the time left for you is running out. It's best to implement the blue ocean strategy as soon as possible.

When all three red lights are on, it means that the market has entered crimson, and the transformation opportunity has basically missed. Your enterprise must have excellent advantages in order to have a foothold

In the Red Sea market, there are recognized key success factors in the industry, which means the core competitiveness necessary for an enterprise to gain a foothold in the industry

As mentioned earlier, the Red Sea market is usually a mature market, and the products and business models have been fixed, so the key success factors are determined. Everyone is aiming at the same factors, just as the subjects of the college entrance examination have been fixed, so there will be a scene where thousands of troops cross the wooden bridge

For example, the key success factors of a garment factory include production capacity, labor cost, fabric material, design layout, workmanship and price

Now we know the key success factors of the circus, but to what extent can we be good?

For example, in the traditional circus industry, the Big Apple Circus in new york is recognized as the industry benchmark.

It should be noted that benchmarking analysis is concise and practical, but it is also the driving force behind the growing popularity of the Red Sea market. Because the Red Sea market has the characteristics of maturity and stability, the key success factors of industry competitors are all similar

It can be imagined that if everyone competes with each other in several same dimensions, the competition will definitely become more and more homogeneous. So at this time, you need to change your thinking, don't just stare at the red sea market in front of you, but try to open up a new blue ocean market yourself

So how do you start by jumping out of the red sea to find the blue ocean?

here are six ways. First of all, it should be noted that these six approaches are juxtaposed with each other, and sometimes they will cross, but it will not affect your analysis and results. Moreover, they are not the criteria for judging the blue ocean market. Even if a few items are missing, the blue ocean market can still be found.

As mentioned in the previous five forces model, an enterprise should not only compete with its competitors in the industry, but also compete with industries that can replace it.

In management, an enterprise that adopts similar strategies in the industry is called strategic groups. There is often no direct competition between different strategic groups

For example, high-end restaurants and fast food restaurants with a per capita of 411-511 yuan belong to the catering industry, but their pricing strategies, management models and operation processes are completely different from the inside out. They constitute two different strategic groups in the catering industry. If you can create a new strategic groups, you can also jump out of the original Red Sea.

Buyers are the target customers. Traditional circuses attract children through animal performances, and then drive the whole family to buy tickets to watch. Although parents are willing to spend money on their children, the psychological bottom line in entertainment activities is still low. Parents don't take their children to a circus with the budget for an opera

So, it seems that there is still a lot of room for the circus buyers to expand, and they can find ways to break through the limitations and include young and middle-aged groups as target customers

The products of the circus are its performances. It has been discussed before about how a traditional circus can compete in performance factors. But how can we judge whether these factors are reasonable in themselves?

Next, it will be analyzed from the aspects of function and emotional orientation. This is also the most abstract of the six aspects. The attraction of a product or service to customers comes from two aspects: function and emotion.

Analyzing from the time level means looking at the problem from a larger time span and thinking about whether the present advantages will become the future disadvantages. We have studied PEST analysis before, and we can use it to analyze macro trends here

After finding the breakthrough in six ways to find the blue ocean strategy, we can start to build products and services that can take you into the blue ocean

But we still need to think about some issues, such as how to make customers agree with the new value of products? How can we maximize the value that customers agree with and are willing to pay for?

Next, let's take a look at how to reshape the value proposition of an enterprise or a product.

The Red Sea strategy is to compete on the existing factors. If you want to do better than others, you must increase your cost. You can't have both low cost and high value. We call it "value-cost exchange".

For example, if a traditional circus keeps up with the competition in animal performances, it will have to spend more money to buy bigger elephants. If we want to reduce the cost, we can't afford these high-value performances. What value innovation needs to do is to break this dilemma, not only to reduce costs, but also to enhance the value obtained by consumers.

Maybe this will make value innovation very abstract, so now we introduce an intuitive tool, called strategic canvas.

The process of making strategic canvas is a bit like the competitive situation matrix (CPM) mentioned earlier. First of all, we should determine the evaluation factors through expert interviews or internal discussions, and then score each factor. Some factors are customer-oriented, and these factors are scored mainly through market research. Some factors are internal to the enterprise, and the evaluation method is mainly qualitative analysis of the industry. By comparing with competitors, we can determine the theory of strategic layout.

Let's take a look at how the enterprise can use it to complete value innovation.

If you are now the operator of Cirque du Soleil, when opening up the blue ocean, you can first refer to the strategic layout of the traditional circus, and then combine the findings in the previous six ways to invest in various factors. It can be found that the value propositions of both large circuses and small and medium circuses are basically the same

But Cirque du Soleil has analyzed that there are many problems in this value proposition in the process of searching for the blue ocean, so what we need to do next is to transform it

Finally, we appreciate the charm of turning the blue ocean into magic. First of all, I learned the difference between the Red Sea strategy and the Blue Ocean strategy, and I also learned that benchmarking analysis is not only a powerful tool in the Red Sea, but also a driving force behind the fierce competition among enterprises.

In the process of implementing the Blue Ocean strategy, the business model of enterprises will also change accordingly. At the same time, by innovating the business model, enterprises can also open up new markets and enhance their self-competitiveness. If we regard the business model as the gene of an enterprise, then the business model innovation is the gene mutation of the enterprise < P >. Therefore, the next thing to understand is the business model innovation, which will be closer to the operation. More importantly, I will learn an analysis method that is essential for investment and entrepreneurship, to decipher the profit codes of different enterprises, and to understand why those new companies that are expanding rapidly can succeed.