Reference: Blue Ocean Article
Over twenty-five years have passed since Apple launched its famous 'Think Different' ad campaign, which summed up the company's mission in two simple words back in 1997. The phrase, which is still memorable today, helped to kick off one of the most significant business turnarounds in history.
According to Apple's "Think Different" tagline, having a blue ocean viewpoint is a way of looking at the world in a new way. As part of this blog post, we are going to look at how Apple used a 'think different' strategy to transform whole industries and the world.
Think Like a Blue Ocean Strategist and You'll Be Ahead of the Game
You may ask a new set of questions to uncover long-held beliefs and artificial restrictions that we unintentionally place on ourselves via the use of the blue ocean strategy, developed by strategy academics Chan Kim and Renée Mauborgne. Think like a blue ocean strategist and you can't help but think differently.
Strategists who focus on the "blue ocean" aren't deceived by what others take for granted. While many business executives and entrepreneurs believe in a market-competitive mindset, their perspective is a little different. They approach problems in a different way, formulate distinct hypotheses, and arrive at entirely different conclusions. Steve Jobs, epitomizes this "blue ocean" style of thinking.
It was Apple's "Think Different" ad Campaign that Reshaped the Company
Jobs did not fit the mould of the typical business executive. Soon after he returned as temporary CEO, he revisited the company's basic ideas and developed a concise statement of what Apple stood for in 1997. A worldwide campaign dubbed "Think Different" was created by Apple to promote its products as unique and unconventional, in keeping with the company's new corporate identity.
The "Crazy Ones" ad drew comparisons to some of history's greatest prominent freethinkers. Those honoured included everyone from Albert Einstein and Thomas Edison to Pablo Picasso and Amelia Earhart for their unique perspectives on the world. Innovators and risk-takers who dared to go from the path less travelled, the "blue ocean" thinkers and makers.
Apple's 'Think Different' Motto Conveys the Company's Message
A new era for Apple was being envisioned under Steve Jobs' leadership when the company announced its "Think Different" campaign in the early 1990s. With its catchphrase 'Think Different,' Apple changed the way we look at marketing efforts such as commercials and posters. In the "Crazy Ones" commercial, the following is an exact paraphrase:
Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules and they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.
The message celebrates and links Apple to those innovators who have pushed the world forward, communicating to consumers what Apple stands for. One may conclude that people who use iPhones and iPads think and act differently from those who don't. You had to be "a bit different," in the words of Steve Jobs, to purchase an Apple computer.
“I think you had to really think differently when you bought a Mac. It was a totally different computer, worked in a totally different way, used a totally different part of your brain. And it opened up a computer world for a lot of people who thought differently … And I think you still have to think differently to buy an Apple computer.”
There were three criteria of an effective strategy that Apple now possessed: concentration, divergence, and a concise, memorable catchphrase for the company's mission statement. From this point on, Apple took a series of smart and unique decisions that turned the firm from a struggling tech start up to the world's most powerful and influential corporation.
How Apple's Blue Ocean Strategy Moves from 2001 To 2011 Shows the Power of Thinking Differently
Companies have historically grown by reshaping existing industry boundaries to generate new market space and unleash latent demand, rather than by leveraging pre-existing demand. Those efforts are called "blue ocean strategic movements," a series of management acts and choices involved in building a big new market.
The iPod, iTunes, the App Store, the iPhone, the iPad and more were all part of Apple's strategic initiatives throughout the last decade. In a decade, Apple went from the most respected and valued American corporation to one that created new market space and sparked fresh demand instead of attempting to outpace rivals in already-established sectors.
As the industry's value pioneer, Apple helped extend the industry's boundaries outward and harness latent demand. Let’s examine quickly at two of these strategic manoeuvers before taking a more in-depth look at one of them, the iPhone.
Think and Listen in New Ways: The iPod
In the late 1990s computers replaced stereos. MP3s are used for transferring music. By 2001, 75 companies made MP3 players. Customers have to choose between low-capacity flash memory players and huge, cumbersome hard discs.
Apple's iPod was debuted on October 23, 2001, with the phrase "1,000 tunes in your pocket." The iPod combines hard drive storage and portability. Apple's iPod was the first MP3 player to allow thumb-based song browsing.
It dominated MP3 player sales. In 2003, iPod sales accounted for 25% of Apple's $7.1 billion first-quarter revenue and 21.6% of global digital music player sales. Apple has radically changed the digital music player business with 297 million iPods sold and a 70% market share by 2010.
When it Comes to Music, there's no Better Place to Go than iTunes
By the late '90s, the music industry had changed dramatically. No need to visit a record store when Amazon.com sells CDs. Download digital music to play on many devices. There are two online music options:Napster and Kazaa let people search and download music from one other's collections.
Subscribing to an online music service was another way to avoid violating others' rights. Subscription music services offered legal, high-quality music, but their choices and permissions were limited. P2P networks offered more free music, but the downloads were frequently low-quality and unlawful.
Despite a clear and unstoppable new trend, record companies couldn't capitalise on it, and many predicted the music industry's collapse. It revealed trends others missed.
The following 3 ideas are essential to evaluate trends throughout time. These trends must be critical to your organization if they are to serve as the foundation of a blue ocean strategy. They must not be reversed and have a well-defined path.
Eliminate, Reduce, Increase and Create (ERRC) Grid
Chan Kim and Renée Mauborgne's Eliminate-Reduce-Raise-Create (ERRC) Grid is a critical part of their blue ocean approach. With this simple matrix-like device, organizations may simultaneously concentrate on removing and decreasing as well as raising and developing, and so open up a new blue ocean of possibilities.
Eliminate, Reduce, Increase and Create (ERRC) Grid
Chan Kim and Renée Mauborgne's Eliminate-Reduce-Raise-Create (ERRC) Grid is a critical part of their blue ocean approach. With this simple matrix-like device, organizations may simultaneously concentrate on removing and decreasing as well as raising and developing, and so open up a new blue ocean of possibilities.
Eliminate: Which of the long-standing competitive elements in the sector should be eliminated?
Raise: Which aspects of the industry should be elevated to a level that is much beyond the norm?
Reduce: Is there anything in particular that should be lowered to a level that is much below industry standards?
Create: What elements haven't been considered by the industry before?
They must promote differentiation while keeping expenses low to break the value-cost trade-off. Any business that focuses simply on raising and manufacturing, or over-engineering its goods and services, will fail rapidly. Managers of all ranks are keen to implement it because of its simplicity.
Companies must research every facet of the industry's competitive landscape to complete their grid, which helps them identify implicit assumptions. Apple saw a huge unmet need for easy-to-use, legal, high-quality digital music at a fair price and created iTunes.
iTunes eliminated a big source of customer complaints by allowing consumers to buy extra tracks and pricing them more affordably: the requirement to buy an entire CD when they only wanted one or two songs.
Apple launched iTunes in April 2003. Internet shoppers can buy a music for 99 cents without subscribing. Customers could hear a 30-second clip of each song before buying, an industry first.
Results exceeded all expectations. In Apple's first week, 1 million songs were sold. Apple had 88% of the legal music download market in the US in 2006. It reformed the digital music business.
Think Beyond the Box and You'll See the iPhone as an Example of this
Phone makers faced strong competition in the early 2000s. Each company tried to improve their phone's technology. MP3 players, game consoles, and digital cameras were introduced to phones before email, calendars, and web browsers.
Instead of adding hardware capabilities like a high-resolution camera or email push key, Apple designed a more reliable operating system and intuitive user interface, making mobile phones easier to use. Apple redesigned the mobile company by eliminating, reducing, growing, and defining criteria for a revolutionary new device.
Apple released iPhone on January 9, 2007. The phone has most traditional smartphone functions, but its simple user interface made it stand out. A mobile "apps" market hosted by Apple or third-party developers was also accessible, enabling users to customise their phones in accordance with their preferences. Apple's App Store was the first to offer high-quality apps in one accessible location.
Apps could be downloaded via iTunes, giving the iPhone more than a phone for calls and texts. This device is both a mobile game console and picture editor. App Store launched July 10, 2008, with 400,000 third-party and Apple apps. Since 2007, 10 billion apps have been downloaded through the App Store. iPhone and App Store made Apple rich.
Strategy Canvas depicts the phone business's current state in a single image. Apple's approach to smartphones is unique. Apple released iPhone on January 9, 2007. The phone has most traditional smartphone functions, but its simple user interface made it stand out. Users could customise their phones with "apps" from Apple or third-party developers. Apple's App Store was the first to offer high-quality apps in one accessible location.
Apps could be downloaded via iTunes, giving the iPhone more than a phone for calls and texts. This device is both a mobile game console and picture editor. App Store launched July 10, 2008, with 400,000 third-party and Apple apps. Since 2007, 10 billion apps have been downloaded through the App Store. iPhone and App Store made Apple rich.
Tactical Canvas
For developing a compelling blue ocean strategy, Chan Kim and Renée Mauborgne's Strategy Canvas is an essential diagnostic tool and an action structure to follow. In one easy image, it depicts an organization's strategic landscape as well as its future possibilities.
Exactly What is a Strategy Canvas and How Does One Use it?
An industry's competitive landscape is shown horizontally on the strategy canvas, while the offering level that buyers get across these competing elements is depicted vertically. The visual representation of a company's relative performance in relation to its industry's elements of competition is known as a value curve or strategic profile.
Using a strategy canvas, your business may identify all the elements that industry competes on and invests in, what purchasers get, and the strategic profiles of the big players. It illustrates precisely how similar the players' methods seem to customers and reveals how they are driving the market into the red ocean. It's important because it establishes a consistent baseline for future change.
The goal of the strategy canvas is twofold:
Customers' perceptions of the degree of your offering, your own and your rivals' strategic profiles and cost structures, and the amount of rivalry are all clearly communicated on the strategy canvas.
Apple's 'Think Different' Strategy Re-Established the Limits of the Marketplace
Today, Apple is widely considered to be one of the most well-known and respected technological companies in the world. There is a lot more going on behind the company's success than just relying on the latest technologies. Apple's technology allows the company to provide its clients a level of service and convenience that has never been possible. Value innovation, not technological innovation, is what makes Apple what it is in the blue ocean.
With blue ocean strategy, the Six Paths Framework, Apple changed market limits by making exceptional advances in buyer value. In order to generate new market space, you may use this tool to examine across six traditional borders of competition. Apple proved that strategy may overcome structural constraints by changing industry boundaries. It defied the conventional wisdom that a company's strategy is determined by its market circ*mstances.
Let's say you own an MP3 player. Flash memory players and hard-drive jukeboxes seemed to be successful, but there was no obvious victor until the iPod spanned the gap between these two strategic groupings.
Consider, for example, the way it is tracked changes . Digital music's extensive dissemination caused the music business to go into rapid collapse, but with Apple's iTunes Music Store, a new market segment was developed that offered unparalleled value in the purchase of digital music at a cheap price.
The iPod, iTunes store, iPhone, and many other Apple products all adopted a different strategy than competing for pre-existing demand. Existing market limits were rebuilt and new demand was established.
