Sailing into blue oceans and building partnerships

IT’S become cliché to say that the world is getting more and more complicated. Everything has become exponentially more complex over time. Technological advancement is changing the economic landscape at a breakneck pace. Consumers are forced to adapt rapidly with some generations lagging. Business models have been forced to adapt as well. The sharing economy, services as a subscription (SaaS), freemium, peer-to-peer and crowdfunding models are all products of shifting from red ocean to blue ocean strategies.

A blue ocean strategy involves a business deciding to create a new uncontested market and add value to consumers, making competition irrelevant in the process. One might imagine that shift- ing to a blue ocean strategy is reserved for only large businesses because of the need to create a new market; most would imagine that this entails creating a new product as well. Fortunately that is not the case and the point of blue ocean is to stop competing in a crowded space.

How then does a business go about adding value without creating a new product? The key lies with creating demand in a new market. For example, Bloomberg challenged the status quo when they realized that it was not IT managers (which Reuters and Dow Jones were aiming for) but the investment community that would use business information and the rest is history. Apple also employed the strategy when they created iTunes at a time when music piracy was peaking. Apple changed the game by partnering with music labels to offer songs piecemeal. By creating strategic partnerships, Apple was able to swiftly move into the music industry and also solve issues for both consumers and music labels.

A similar approach can be adapted by entrepreneurs looking to maximize Startups are a testament to the changing business culture. Companies before were determined to do everything themselves (most of the time not so well). New businesses today are focused on creating a product/service that they do very well. They then forge partnerships to leverage their expertise to create new markets and add value. It may have been unimaginable for a music label to tie up with a consumer electronics company but now we have iTunes. For those attempting to create partnerships, the key is an open mind and seeing value. That vision allows a company to move away from competing on price in a heavily competitive market into a blue ocean where possibilities abound.

Strategic partnerships allow entrepreneurs to do more business while sharing the risk and operational burden. In effect, this allows the business to devote more resources to their expertise, increasing

the chances of success. On the downside, partnerships can be quite - tionships. In setting up a successful partnership, all involved businesses must have aligned values and goals. value to each businesses’ individual key performance indicators while achieving the overarching objective. The process can prove to be long and tedious. However, with proper communication channels and savvy negotiation, partnerships have the potential to take businesses to new heights faster and at a fraction of the cost.