When you consider all the markets that Nepalese enjoy burning their cash in, any close observer can see nothing but chaos.
Those who try to be innovative are immediately copied and their customers stolen. There is no safe guard for reputations, trademarks and patents of companies in this country. Even international brands are struggling to save their reputations and trademarks here. It’s a veritable jungle out there to say the least.
The Nepalese companies have dual objectives: one, they need to overcome all these struggles to find out the customers who are loyal to them and, two, they also need to chalk out a plan to put an end to customers’ confusion in selecting the right companies, products and services.
An understanding of blue ocean and red ocean strategies could be the answer for these woes if the corporate houses in Nepal rightly comprehend and implement them. And mind you, there are a lot of companies around who have keen sense of what products and services they can provide to bring in customer in troves.
What are those two “oceans” and how can they of any help? First, let us understand where these “oceans” exist.
The two “oceans” refers to a strategic framework proposed by two famous management thinkers, W. Chan Kim and Renee Mauborgneby, more than a decade ago. This strategic framework took the world by storm. The strategy was formulated based on a decade long study of 150 strategic moves by 30 companies over a span of 100 years. They basically created a sharp distinction between “blue ocean” and “red ocean” for the types of markets that exist in the world.
The “red ocean” consists of current industries, competition, and boundaries, where the rules are well-defined and competitors strive to gain market-share from the existing demand between the rivals. As this market gets crowded, the prospect of profit reduces or nullifies. This is the “ocean”, the red one, where Nepalese businesses are navigating as we know them in all their magic and persona.
The blue oceans come into the second side of the market. A “blue ocean” strategy aims at making competition irrelevant by tapping into a completely new market space and tapping into that demand. Unexplored and untainted by competition, blue oceans are vast, deep and powerful in terms of opportunity and growth. Pursuing a blue ocean strategy creates new demand. Companies develop uncontested market space rather than fight over a shrinking profit pool. In a blue ocean, there is ample opportunity for growth that is both profitable and rapid
Companies aiming for the blue ocean tap into value innovation in their approach so that they can benchmark the competition. This may bring about imitators, but solves the issue at hand. With the blue ocean approach, organizations don’t focus on beating the competition but adding value to the buyer and thus, opening up an uncontested market space.
Some of the best examples of blue ocean strategies as seen in our neighborhood could perhaps be Reliance JIO mobile network and OYO Chain of Hotels in India. The OYO brand has already crossed over to Nepal and one can see OYO hotels spread throughout Thamel and other areas of Kathmandu. We will discuss the “blue ocean” strategies they adopted later in this article.
In Nepal itself, a few companies such as a famous movie multiplex chain can be considered as an example of blue ocean strategy which they are now taking all over Nepal to rule the movie industry.
Some readers might pose a simple question: why the hell should we bother about a concept which is perhaps outdated because it’s nearly 14 years old? Isn’t it too late to try to create a buzz on blue ocean strategic framework in Nepal?
In our opinion, the simple reason the blue ocean strategic framework is of very much relevant to the Nepalese market and is worth its salt is because the Nepalese consumers still are not getting the benefit they deserve being customers in a highly competitive market.
If you also share this sentiment, then you would agree that something needs to do be done to get our companies out of the rut they have got themselves into and also save the Nepalese consumers from the depression of unexciting value depleting products and services provided.
The paradigm needs to shift now from red oceans to blue oceans. Before chalking out a blue ocean strategy and make a shift, the Nepalese businesses need to ask for themselves four questions. They are: 1. Which are the factors that the whole Industry takes for granted should be eliminated? 2. Which factors should be reduced well below the whole industry’s standards? 3. Which factors should be raised well above the whole industry’s standards; and finally, 4 Which factors should be created that the whole industry has never offered?
Until these points are pondered upon intensively by the corporates in Nepal and answers arrived at, it is going to be a long road to freedom from the competitors’ problems which follow like a shadow with the businesses.
Recently a “news” was much in the air in the country. Rumors spread that a very famous alcoholic beverage making company was being accused in press of selling “almost expiry date” reached beverage. Imagine the kind of backlash the company must have faced after such news has spread like fire. How are they going to cope with the news like that when their competitors are already taking advantage of the bad news to gain market share of the brand.
Some of you might say that for that company “It’s karma that happened to them because they tried to push almost date expired beverage in the market”.
An analysis based on the blue ocean strategy framework suggests a probable alternative scenario. It is very much possible that because there are so many competitors in the red ocean markets of Nepal, any minor mistake or small quality issues could have become thousand times magnified through news media by competitors who would like to exploit such vulnerable news about their competitors.
Many of you might still be wondering: how is blue ocean strategy helpful for the consumers of goods and services when it is going to be implemented by business organizations?
Three very good examples of the advantage to consumers can be cited here about which we referred to earlier as well: Reliance JIO Telecom and OYO hotels in India and a famous Nepalese movie chain.
Reliance JIO telecom kind of revolutionized the Indian telecom market and proved to be a game changer. Indian consumers are getting free calls and world’s cheapest internet on their phones. Earlier Indian Market was filled with 3 or 4 telecom companies which were offering a charged call package and an expensive mobile internet at 3G speeds. Reliance JIO changed all that providing free calls and cheap internet at 4G speeds higher than 3G. It was a huge eye opener for the one billion plus consumers in India who quickly switched to JIO.
The OYO hotels in India, which have now expanded into Nepal, has resulted in people getting excellent quality hotel rooms at a budget price via online booking. Earlier there was no such service available for consumers and their only option was to book through travel agents or booking websites who charged their commissions upfront without bothering the quality of stay at hotel. Suddenly OYO came with the idea that hotels can be good and they can offer same quality of service wherever consumers went. Whether the customers were in India or in Nepal, they could find the right place to live in with assured quality by simply booking online at OYO website.
There is another example which can be cited from the Nepalese market itself. A famous Nepalese movie chain which provides quality cinema experience has changed the movie watching habit of Nepalese audience by giving them high quality movie experience at a price they can afford.
Earlier the only option available to movie goers was getting the same experience of poor shoddy quality movie halls with poor sound and screen quality, even after paying good price for a ticket. The new movie chain experience changed all that by charging a slightly higher cost for tickets but offered a highly differentiated quality movie experience with clean and comfortable seated movie halls with high quality sound and also good food available for audiences.
These examples could be good lessons in “blue ocean” strategy where these companies were able to successfully create a totally uncontested space in an already intensely competitive “red ocean” markets. They tapped into innovation and new market space, rendering in the process the existing stiff competition irrelevant.
While we discuss the words on blue ocean strategy, a song rings in the backdrop which could be meaningful here. Its “welcome to the jungle” by Guns n’ Roses, a famous yesteryear rock brand. How it matches the reality of the business times we are experiencing in Nepal!
Nepal and the Nepalese people are bracing for action and economic progress but here we are living in the jungle where the big cat feeds on the small and wolves hunt in pack mercilessly preying on their prey.
May be a time will come when our businesses will figure it all out and then may be the business and the consumer both can be winners. A thing John Lennon, the vocalist of the famous band “Beetles” would sing in his song “Imagine” – “you may think I am a dreamer, but I am not the only one…” For now, let us “imagine” and be hopeful that such a time would arrive in future. After all, perhaps it was a famous philosopher who said very aptly that hope is the food that man lives on.
(A writer and analyst, AK Vanprasthi is Consulting Managing Editor of Pariwartankhabar.Com. He has worked in senior positions in financial sector in the past. Nischaya Subedi is a Consultant Strategic Manager based in Kathmandu. He holds a B.E. degree in mechanical engineering and an MBA.)
