Creative Management and Marketing: Blue Ocean Strategy

Creative Management and Marketing
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Creative Management and Marketing
Blue ocean strategy refers to the process of creating new demand by concurrently pursuing market differentiation and low prices. It is focused on creating new marketplaces free of competition as opposed to contending for customers with other companies. To do this, the stratagem encourages businesses to improve on their current efficiencies and eliminate all pain points that impede market differentiation and low prices. The blue ocean strategy is derived from the Blue Ocean Strategy book by Chan Kim & Renee Mauborgne where they categorize the market universe into two groups: red ocean and blue ocean. Red oceans refer to all existing industries in which market boundaries are already demarcated and accepted. Companies have to outperform their rivals to acquire a larger share of the existing customer base, resulting in bloody competition. On the other hand, blue oceans refer to all industries that are yet to be conceived or tainted by competition (Asa et al., 2021). The market boundaries are yet to be defined or accepted and there are numerous unexplored opportunities for rapid growth and revenue generation.
One blue ocean strategy in the clothing retail industry relates to the use of showrooms to deliver personalized shopping experiences to customers. The changing consumer behavior in the retail industry means that the apparel industry must embrace innovation and convenience if they want to increase their market share, profit generation, and brand recognition. The post-pandemic era has seen many cloth retailers shift from brick-and-mortar stores to e-commerce. E-commerce has several advantages over traditional retail including broader access to customers, lower operational costs, greater speed and flexibility, heightened shopping convenience, customer data insights, easy scalability of operations, higher profit margins, and targeted marketing among others (Stöcker et al., 2021). However, e-commerce has several critical disadvantages including limited customer engagement, poor product information, personalization gaps, and high customer returns, all of which negatively impact brand recognition, customer trust, and overall revenues. This essay will focus on showrooms as a blue ocean strategy that complements the function of e-commerce in clothing retail while eliminating its pain points.
Showrooms can be used to fulfill online orders in terms of value-addition activities like packaging and shipping, but more importantly, they can be helpful in increasing customer engagement, heightening product information, eliminating personalization gaps, and reducing customer returns to increase brand recognition, customer trust, and overall revenues. The focus of the blue ocean strategy is to heighten customer engagement by providing personalized shopping experiences and increasing product information. The divergence of the blue ocean strategy is to reduce customer returns and associated costs of low brand recognition, poor customer trust, and limited personalization. The tagline of the blue ocean strategy is “Providing personalized shopping experiences through tailored product education and personalized product recommendation”.
The four actions framework is a blue ocean strategy analytical tool developed by Chan Kim & Renee Mauborgne to regenerate buyer value facets when developing a new value curve. Consistent with the overall blue ocean strategy of differentiation and low cost in generating a new value curve, the four actions framework focuses on four questions: Which factors should be raised over and above the current industry standard? Which factors about the competition should be eliminated from the current industry? Which factors should be created over and above what the industry is currently offering? And Which factors should be diminished well below the current industry standard? (Abdel-Dayem et al., 2021). The blue ocean strategy of using showrooms in the clothing industry will reduce operational costs, slow-moving stock, and customer returns. It will also focus on eliminating excess inventory, personalization gaps, and poor product information. Moreover, the blue ocean strategy of using showrooms in the clothing industry will raise customer trust, brand recognition, and customer service. Finally, the blue ocean strategy will create customized shopping experience, tailored product education, and personalized product recommendation.
Showrooms can help reduce operational costs by eliminating the amount of square foot needed by clothing retailers to advertise and sell their items. They are only meant to fulfill online orders and provide customers with tailored product information as well as personalized product recommendation (Zhang et al., 2021). Customers make their purchases online after trying the items in the showroom. Since no inventory is stocked in the showrooms, the square foot requirements are kept to a minimum thereby reducing operational costs (Bell et al., 2018). Furthermore, the salesforce in the showrooms are always in contact with customers and therefore have a unique understanding of customer needs thereby reducing slow-moving stock and number of customer returns. Showrooms not only eliminate excess inventory for clothing retailers but also the personalization gaps and poor product information in e-commerce. The personal interactions between customers and the s...