How to create a very successful and profitable business the blueprint

Discussion in 'Growing and Managing a Business' started by iggypop, Jul 15, 2013.

  1. iggypop

    iggypop
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    Hello everyone well its 2 am and I have insomnia plus this is my favorite forum so I am creating this post to contribute. First off I am a business economist with specialization into Supply Chain Management but don't worry I will not do any profit maximization or Lagrangian methods here anyways part of my job is to look into what makes businesses succeed/fail and finding markers that contribute to the value added puzzle among some things with that said lets begin. Every business out there belongs into 2 groups which are red ocean strategy (~84%) and blue ocean strategy (~16%). Red Ocean is where most businesses are and thats the area you want to avoid because there is a high failure rate and little profits the best way to know if your in a red ocean market is if the example below applies to you
    • sharing the same market demand with other businesses/zero sum game meaning if you enter a market and compete for the same customers as other businesses, if you gain 2 customers then some business loses 2 customers.
    Red Ocean is very cut-throat there is not much room for profits for the average business since market saturation has probably occurred and the bigger businesses probably have economies of scale on they're side think walmart they can offer more stuff and at a lower price. Enough about that lets get to the good part Blue Ocean Strategy is were innovation and profit meets this is characterized by
    • creating your own market demand with no competition
    • thinking outside the box and adding innovation to whatever it is your doing
    A good example of this is Facebook the reason why they expanded so quickly was because they created they're own uncontested market catered specifically to people who already knew each other. This blue ocean strategy can work for any business the key point you should take away from this is to create a demand that is currently not being offered . You must be unorthodox offer something else along with your service,take risks. Innovation is the key to profits; you must take continual calculated risk and not grow stagnant. All blue oceans will turn to red in due time why you ask? Because of Profits, profits are the leading indicators in the market. If you develop a service that makes a lot of money sooner or later competition will start growing until everything is at equilibrium thus more innovation is needed and as a result of this trend peoples lives improve.As the statement above said you can integrate blue oceans strategy into your existant business they point is to draw in new people while offering something that you and only you sell. Ok so it is now 3 am I am heading to bed anyways I hope some of you took some of this in and learn more about this topic the information is plentiful Blue Ocean Strategies.
     
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    #1 iggypop, Jul 15, 2013
    Last edited: Jul 15, 2013
  2. Rocky

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    Although it is good to be in the Blue Ocean practically it may not be so easy to do that. Since businesses that have been existent find it difficult to innovate and create a novel product in the existing product range. Most companies in the Blue Ocean are ones that have begun with a business that is based on something currently non-existent in the market and therefore find success.

    For a already established company which may be a Star, the only way to become a cash cow is by becoming a leader and using differentiation to gain market share. It may not always be possible to get in the blue ocean and a business needs to adopt other strategies to survive in a fast growing market segment.
     

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