Why are Red Ocean Traps so dangerous?
Exceptional article with plenty of examples. It opens up the reader’s mind on issues with mental models. Here a summary of my personal learnings, which I will keep in mind in my strategy work around creating new markets:
Market power has moved from companies to consumers.
Long-term success will depend on the ability to generate new demand and create and capture new markets.
Organizations need to turn their focus to noncustomers and why they refuse to patronize an industry’s offering.
Uncovering a niche in an existing space is not the same thing as identifying a new market space.
Products and services succeed because they are so simple to use, fun, and productive that people fall in love with them.
Value innovation, not technology innovation, is what launches commercially compelling new markets.
Successful new products or services open market spaces by offering a leap in productivity, simplicity, ease of use, convenience, fun, or environmental friendliness.
A market-creating move breaks the value-cost trade-off. It is about pursuing differentiation and low cost simultaneously.
New market space is created not by pricing against the competition within an industry but by pricing against substitutes and alternatives that noncustomers are currently using.