From time immemorial people have been trying to improve sales. We call these measures- strategies. Sometimes these measures become very effective and businesses prosper. But if you are incurring losses, then hire the best outsourcing companies in Florida. For ages people have been inventing these strategies; Porter’s five forces and Blue Ocean strategy are just strategies like them.
What are Porter’s five forces?
This is no market strategy but a tool to review market competition effectively. Porter’s five forces are:
- Competitive rivalry-this force shows us the level of competition in the market. High competition is not good for business and vice versa. When rivalry competition is high, advertising and price wars start, which can hurt any business.
- The bargaining power of suppliers-This force shows how powerful the suppliers are. If the suppliers demand more money, this signifies a loss for the business. It has become a rule- the fewer suppliers there is the more power they have. Businesses are in the best position when there are many suppliers.
- The bargaining power of customers- This force determines the power of the consumer. When there are a lot of consumers; their power increases. The opposite is also true. Sometimes consumers are distracted by cheap money.
- The threat of new entrants- This is the fear of entry of a new player in the game.
- The threat of substitute products or services-It is fear that customers of a particular brand will switch. This fear exists when there are a lot of producers in the market.
This is how we have determined the nature of the market and now let us focus on the blue ocean strategy.
What is the Blue Ocean strategy?
It is a marketing strategy that states – the total market are divided into 2 segments
- Red Ocean-all the industries of today, the known marketplace. The worst feature of this is that the market is full competition. The demand is not very good in this ocean. The suppliers & consumers all are the same. No differentiation among products.
- Blue Ocean-It includes all the industries nonexistent today-unknown marketplace. Blue Oceans are vast and deep in terms of opportunity and development. Blue Ocean Strategy creates new market segments.
Blue Ocean Strategy
- Tap uncontested market space. This is done by introducing new features in the product.
- Try to make the competition irreverent by offering new products.
- Create new demand by inventing new product usage.
- Do proper pricing research before fixing a price. Low price is associated with this type of strategy.
If you want profit then implement the blue Ocean strategy. Many companies follow this strategy to profit. Netjets, Quicken, Canon, iTunes, Starbucks, Netflix, and many more.