Last week in our lesson, we discussed the difference between Red Ocean strategy and Blue Ocean strategy. In a Red Ocean, companies face fierce competition and are forced to lower their profit margins to survive. No market is immune to saturation, so as more competitors enter the market, each company’s profit margin decreases. To stay profitable, companies may need to cut costs or lower prices. However, this can lead to consumer disinterest as products become less unique. The only solution is to adopt the Blue Ocean Strategy.
In the article, Uniqlo is on the lookout for their Blue Ocean. This fast fashion shop has established its own distinctive brand DNA, referred to as an “innovative technique”, which distinguishes them from other competitors in the industry. Nonetheless, Uniqlo remains true to its core identity as a budget-friendly fashion store by offering affordable prices. Uniqlo’s brand positioning revolves around being “Cheap” and “Trendy with quality”, while other brands prioritize being “Fast trendy”. Uniqlo’s competitive strategy involves constantly improving the quality of their existing products using their innovative technique, enabling customers to experience high quality even within the realm of affordable fashion. This strategic approach allows Uniqlo to gradually create distance between themselves and competitors like H&M.
According to “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne, they analyzed strategic moves from different business sectors and found that price competition is the main focus for most enterprises. To achieve sustainable success, the authors suggest that companies must continuously innovate while effectively controlling costs, transforming into a blue ocean business. There are various approaches to achieving a blue ocean strategy, such as redefining market boundaries, considering the overall market potential instead of numbers, and prioritizing unmet demand. However, people often resist change and struggle to accept new ideas, so it is important for management to communicate effectively with staff to ensure their participation in new projects.
