When the ground shifts, stop fighting for your slice of it

GDP slowed in the second quarter and the inflation gauge that the Fed watches most came in cooler at the same time. Slower growth means customers are making choices about where the dollar goes. A steady owner looks at that and asks one question before doing anything else: am I in a fight for a shrinking pool, or is there a pool nobody else is standing in yet?

W. Chan Kim and Renée Mauborgne call it the difference between a red ocean and a blue ocean. A red ocean is any market where competitors are already circling the same customers, bidding down prices, and grinding margins to dust. A blue ocean is the space you create when you stop fighting over existing demand and start defining what a new kind of customer actually needs. Kim and Mauborgne documented this in a company called Cirque du Soleil, which walked away from the circus industry's traditional audience entirely, stopped paying for animal acts and star performers, and built something that the existing competitors could not price-match because they were not even playing the same game. Read Kim and Mauborgne's own framing of value innovation at blueoceanstrategy.com.

Learn from someone who's done it: W. Chan Kim and Renee Mauborgne — What is Blue Ocean Strategy?