Dear Hicham,

So many things can be said to clarify differences (although there are some scholars using them as equivalent) between blue ocean strategy and niche market. For example, according to some studies, niche is often more related to the "extant". On the other hand, blue ocean is more related to creation of a "new". In addition, blue ocean seems to focus more on "process", on the contrary, the concept of "niche market" appears focusing more on "result" of the process. In addition, blue ocean and niche are related to huge and relatively small markets respectively etc.

For gaining a perspective, these links below can be examined.

Article An innovative model of Blue Ocean Strategy and niche marketi...

https://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=1437586&fileOId=2435409

Good luck in your studies!

Best regards,

Mehmet

In fact, there are many stories to ask of your question. But in this case, blue ocean is not just good for entrepreneurs. Because entrepreneurs must survive with limited resources. So in your specific questions, I would like to give you this advice.

It is the best strategy for startups to make a virtuous cycle profit structure with the fastest method (speed competition) using few resources.

It is most important for start-up companies to rapidly commercialize prototypes, commercialize them, earn loyal customers, generate profits, and move on to the next level.

Dear Hicham

The blue ocean strategy seeks to put aside competition by preventing a deterioration of the margins and benefits that occurs between companies competing in a free market. This strategy broadens the market and revenues through innovation, not gaining market share in a mature market. What companies need to be successful in the future is to stop competing with each other creating new market niches through the offer of new products and services.

By contrast, the niche market strategy is based on developing the marketing mix not towards an entire market, but towards segments within segments, or market niches. In this way, firms compete with other companies in specific market niches, or trying to obtain a dominant position in a market segment. In this case, companies through marketing can also create new market niches, for example creating new needs, for example as a multinational coffee capsule manufacturer in a mature market and generalist has done.

Morning Hicham,

That's a great question, but my suggestion is that Blue Ocean is a strategy that might just be inapplicable for a start up with limited resources. Blue Ocean is essentially positioning your value proposition in a manner which gives you access to any market segment. While this is a good theoretical concept, I am not sure how sustainable it actually is (it depends on your value proposition). The only really good case I have heard was one emerging from Nintendo I think, a decision by one Mr Iwata in keeping up with a corporate traditioon. And I think their refusal to enter the mobile phone gaming market has created future growth impediment issues after their change of leadership. They were following Blue Ocean and Sony wiped the floor with them with a torrent of capital.

I read on Wikipedia that Starbucks have also applied it - but they are selling a branded processed commodity in a B2C business model, seems like coffee just might be an ideal fit for Blue Ocean. But if you assess another company like Tata, they have failed with NANO (which failed in its' home market of India, one place where there was potential). So, I think theoretically, it is a great idea - to target all segments making competition redundant, but this is not a domain where scarce capital should be invested in.

My view is your vertical targeting is critical - in particular, for your startup, this is important. Specialize in something and then scale - if you reach the blue ocean, aim to find the next lucrative port - don't linger around in the middle of the ocean.

I think targeting a niche market is a good way to begin for a small company, having a similar background, I can attest for the fact that you have to begin by identifying a potential growth segment of an emerging market and then be one of the early movers in this segment. This will give you a lot of space, with minimal competition, you can grow and charge a premium for your value proposition. Use this capital and scale - but identifying the right niche is extremely important. In my case, it was just luck and some business exposure with my friends who were all entrepreneurs and business owners themselves, this kind of thing affects you a lot (your circle of friends at a certain age, I guess).

My suggestion is to specialize and concentrate your limited resources on a niche area - charge premium if you have to, accumulate capital and try to break even asap. If you can't find any, carpet bomb and identify which market responds to your stimulus. Once you've done so, look for consistency and sustain what you have and try to exceed this barrier (breakeven), if there is consistency you should then seek to scale and then be a little aggressive with your strategic outlook (I am assuming that there are certain competencies in place by now, your propensity to learn is critical). Take risks - but ensure they are educated risks.

SMBs have indeed a pointless narrative of how Blue Ocean enhances their market reach (as their positioning is immature in the early stages) - this I think is a very wrong approach as at that moment they should specialize and try and cultivate a loyal group of customers who invest in the business. Customer loyalty is a key component to success, without which a business, no matter the size, has no future at all. Your value supply chain survives on this ecosystem, supported by you AND your customers.

For an SMB, you cannot expect to have customer loyalty if you cannot specialize - that means do somethings so well that you become indispensable for your customers. Hope this helps, I have written a paper that might interest you, but it concerns innovation, take a look:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1975636

Thanks,

Dear Hicham,

I found it interesting to read the book of Kim and Mautborgne (2005) during the time for CRM. But, now CRM is even taken over by individual customer journeys using Big Data. Customers would be best managed, if you have an individual approach. Of course in many occasions the back up of Industry 4.0 to satisfy individual wishes may be useful. Speed, quality in fulfilling individual customers' demand is optimal. New technology would allow such activity with nearly no additional cost.

A niche market is the subset of the market on which a specific product is focused. A niche is addressing a need for a product or service that is not being addressed by mainstream providers. Establishing a niche market give you the opportunity to provide products and services to a group that other businesses have overlooked. on the other hand, A Blue Ocean Strategy presents a systematic approach to making the competition irrelevant and capture their own blue oceans

Conference Paper تحليل مضمون استراتيجية المحيط الازرق ضمن فلسفة التسويق الاخضر

Dear Hicham

A niche market strategy, requires that you know your market thoroughly so you can identify a segment that have needs that are neglected (voluntarily or involuntarily) by the competitors or a need that nobody has thought about before and you will focus on how to serve the niche?

With a blue ocean strategy, you develop new ways of creating value in a market that is highly competitive, crowded and saturated.

So, to summarize, in a Niche strategy the challenge is to identify the niche and to serve it in an attempt to develop a competitive advantage before that the competitors become aware of its potential while in a blue ocean strategy, the challenge is to find the way to differentiate yourself from the competitors by providing a high value proposition to the costumers.

Best,

Wajdi