What happens when you are unable or unwilling to create Blue Oceans? The antithesis of Blue Ocean market spaces are Red Oceans. Red Ocean environments represent the existing boundaries of conventional wisdom.
Consider for a moment the pervasive Red Ocean mentality that has materialized in the realm of men’s razors—a situation so transparently absurd that it has become the butt of satirical comedy. Here is the short of it: leading razor manufacturers such as Gillette and Schick (who together dominate 80 percent of the U.S. market for razors and blades) attempt to outduel each other by periodically introducing “new and improved” razors. Each new series is touted to offer a much improved shaving experience, but in reality what consumers see is the continuous, incremental increase in the number of blades and the accompanying higher price point. This is leading to a mounting consumer backlash and jettisoning in favor of disposable razors, as well as some humorous chiding.
However Dollar Shave Club, through a clever cocktail of infatuation, humor, pricing and a dash of Blue Ocean Strategy-like thinking, is now capitalizing on this consumer backlash. Via The Next Web:
When Dollar Shave Club launched in March, the headlines were dumbfounding: Razors? By Subscription? It seemed the feared tech bubble, primed to burst, had finally arrived. However, once you watched Dollar Shave Club’s launch video, “Our Blades Are F***ing Great,” of CEO Mike Dubin deadpanning about his love of fine razors, it all made sense. This wasn’t just another subscription startup. This was the launch of a new brand; a competitor to the Schicks of the world; a new alternative to your trusty, albeit underused, Mach III. For $1 per month, Dubin promised you would get high quality razors delivered to your door. Almost 20,000 people laid down their credit cards in the first week, proving that Kleiner Perkins and other A-list investors were onto something.
