How to Differentiate Your Business in a Saturated Market

How do you differentiate your business in a crowded market?

I was asked this question recently on the Boost Your Biology podcast, and I couldn’t help but think of Renee Maurborgne and W. Chan Kim’s influential Blue Ocean Strategy theory and book.

In it, the authors make a case for capturing uncontested market space, creating new demand and making the competition irrelevant. A clear blue ocean is an obvious metaphor for uncontested marketspace and it differs from a blood red ocean, where all of the proverbial sealife are fighting to the death in a bloody race to the bottom. 

It echoes the old proverb that you should fish where the fish are plenty but the fishermen are few. 

But how do we go about identifying these ponds, or oceans?

Mauborgne and Kim propose the following four questions.

  1. Which factors should be raised well above industry standard?
  2. Which factors should be created that the industry has never offered?
  3. Which factors should be reduced well below the industry standard?
  4. Which factors that the industry has long competed on should be eliminated?

A simple way to think of this is what should we start doing, stop doing, keep doing, do more of, and do less of, as captured below.

This is actually a useful exercise for any team to run on a periodic basis, and reflect upon not just tasks, but offerings, marketing channels, target customers, sales techniques, and so on. 

In fact, you can also apply it to your own life to great effect over time.

A classic example of blue ocean strategy at work was the Nintendo Wii. It entered a saturated home videogame console market in 2006, dominated by Sony’s Playstation and Microsoft’s XBox. 

Below is a blue ocean strategy canvas which captures how Nintendo differentiated itself from the market leaders. 

Rather than look to compete head-on on factors such as storage, surround sound, DVD, internet connectivity and processor speed, it changed the factors it was competing on, and with it, captured new markets.

The Nintendo Wii wasn’t about mindblowing graphics, but at its core, it was about simple family fun that anyone could play, and that helped to unlock a new market - moms. 

The Wii didn’t just make gaming more accessible or compelling to new customer segments, but it did so by competing on factors like motion controls which were key to activating new markets. The motion control nature of many of Wii’s games made it easy for anybody to pick up a controller and start boxing, playing tennis or race cows!

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Another iconic example of blue ocean strategy at work was the proliferation of budget airlines, such as RyanAir, JetStar and the originator, Southwest Airlines.

Rather than compete with premium airlines on factors such as lounges, meals, and seating choices, Southwest was all about the no-frills approach - putting bums on seats and getting them from A to B. 

Doing away with the trappings of a premium airline meant two things:

  • It directly decreased its cost base
  • The limited meals and cleanup required meant that Southwest could turnaround more flights in a single day

As a result, Southwest was able to offer tickets at significantly below what the now premium airlines were charging, and this model not only captured existing customers of the likes of American Airlines, but also unlocked a new market of travellers who previously might’ve caught the bus or train to travel across the contintent. 

To help identify blue ocean opportunities in your business, first reflect on what the factors of competition are in your industry, and then answer the four above-mentioned questions to determine how you can be different.

There are numerous factors you can differentiate yourself by, and a handy starting point to help you determine what levers you can pull is Doblin’s 10 Types of Innovation, below.

Perhaps it’s your price point, your cost structure, superior customer service, the distribution channel you use to reach customers or a really hip brand.

You can go beyond these ten areas to look at your customer segments as well - who specifically are you targeting?

What sales techniques are you using? Are you leveraging artificial intelligence or account-based-marketing to give you an edge over cold-calling competitors?

How can your value proposition be different? For example, rather than being just another personal trainer in a crowded PT marketplace, maybe you instead choose to focus on mobility training for 40+ year olds? Now you’ve got a niche that isn’t anywhere near as contested as trainers whose core value proposition is to help you lose weight and stay lean.

Or perhaps you develop a superior process for getting stuff done, which gives you all sorts of advantages. For example, NoFilter media’s business is built on several key pillars - automation, outsourcing, crowdsourcing and 80/20 thinking. As a result, the company is able to generate thousands of pieces of content at a fraction of the cost of a typical media company. This gives NoFilter an advantage when it comes to selling ads at a discount to market rates without compromising a healthy margin. 

This is particularly important in a post-COVID19 world, where the advertising market is somewhat distressed, and has resulted in bloodbaths at numerous media outlets.

SpaceX actually did something similar. What Elon Musk found as he was build his rockets was that the price of component parts was exorbitantly high. But rather than take this on face value he asked a question nobody else had. “What if we manufacturer the parts ourselves?” As a result, he was able to bring the price of numerous components parts down by more than an order of magnitude, and lower the barriers to space by about 45X. 

When NASA’s space shuttle was in operation, it cost US$1.5 billion per 27,500kilo payload. Today, SpaceX's Falcon 9 rocket can lift 63,800 kilograms and get it to orbit for just US$90 million. 

At Collective Campus, we used content - blogs, podcasts, videos, books and ebooks, webinars - to differentiate ourselves from competitors in the consulting space, and as a result, our boutique firm now generates about 500 inbound downloads and leads a month.

No matter how saturated your market appears to be, today’s world is a fast-changing one, and if you look for opportunities to differentiate yourself, capture existing market share and unlock new markets, you’ll likely find them.

But as with everything in business and in life, success rests on both execution and luck. 

September 30, 2020




Steve Glaveski


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