What is the blue ocean? What is the blue ocean strategy?
The blue ocean is simply a new business environment created by an enterprise whereby its traditional competitors don’t exist.
It is moving away from serving the same customers who are being targeted by those providing the same products to creating and capturing new demand/markets.
Using the telecoms and banking sectors of the economy for a brief analysis, we will try to explain the phenomemon of the blue ocean.
If an average Nigerian was asked who is the competitor of say, Zenith Bank, the obvious answer will be Union, GTB, Diamond, Firstbank e.t.c. Also, if the same person was asked who the business rivals of MTN are, the obvious answer will be Glo, Airtel and etisalat.
The answers won’t be totally incorrect but the truth is the banks are beginning to realise that the telecoms players are encroaching into their space by creating blue oceans, targeting the bankable Nigerian populace.
Telecoms companies are creating blue oceans by becoming creditors to their subscribers. How? Well, have you ever ran out of airtime and had to borrow from your network provider at 10%?
Now wait for it! If you had to borrow N100 every day at 10% for 365 days, do you know what the annualized rate of returns will be ti MTN? Do the maths and tell me if bank interests of max of 30% per annum is anywhere near telecoms rate of return of 3650%.
We will look at another set of industry players who fit into the blue ocean phenomemon in our next write up; the medical practitioners and food supplement multi-level marketing companies!
My name is Victor Idem (ACIA) and I just want to make common sense.