Introduction
As the world continues to grapple with the pressing issue of sustainability and the UN Sustainable Development Goals, more and more companies are recognising the need to shift their operations and strategies in order to align with these critical global goals. However, for many businesses, the path to sustainability can feel overwhelming and uncertain. This is where the concept of the “blue ocean” comes in.
Blue Ocean Strategy
First introduced in the book “Blue Ocean Strategy” by W. Chan Kim and Renée Mauborgne, the blue ocean is a metaphor for a market space that is untapped and uncontested. In other words, it’s a place where a business can create and capture new demand, rather than fighting for a slice of a crowded and competitive market.
When it comes to sustainability, the blue ocean can be thought of as the space where a company can innovate and differentiate itself by implementing sustainable practices and reducing its environmental and social impact. This can be done in a variety of ways, such as by developing new products or services that are more environmentally friendly, implementing more efficient production processes, or reducing waste and emissions.
Benefits of a Blue Ocean Strategy
Applying the Blue Ocean Strategy to your sustainability strategy can help your organisation to reduce costs, generate new profit streams, reduce supply chain risks, increase resilience, and generate demand for new products and services whilst encouraging innovation, increase growth and create more robust relationships with your customers.
When used effectively, a blue ocean strategy can help your business harness sustainability to stand out from its competitors and capture new demand.
Consider the example of Patagonia, a company that designs and sells outdoor clothing and gear.
Patagonia’s blue ocean strategy (driven by the founders values) was to focus on environmental sustainability and social responsibility in their operations and supply chain.
It was the first California company to use renewable energy sources to power its buildings and one of the first to print its catalogs on recycled paper. Patagonia switched to 100% organically grown cotton in 1994 and removed chlorine from its wool products.
Patagonia also implemented a number of innovative initiatives such as 1% for the planet, a program that donates 1% of sales to environmental causes and the Common Threads Initiative, which encourages customers to reduce consumption by repairing, recycling and reselling their used Patagonia products.
Whilst growth is not the ultimate goal for Patagonia, their differentiation and environmental focus has helped them grow sustainably by building a local following of customers.
Patagonia has been able to create a value proposition disconnected from cost by making customers feel they are contributing to protecting the environment by extending its value proposition beyond the performance and technical features of high quality outdoor clothing and equipment.
Patagonia can therefore charge a premium, because customers accept that environmentally friendly production comes at a cost.
Their “Blue Ocean” is that the company’s customers are more environment-conscious than price-conscious which ultimately has helped them grow sustainably.
Related: How to develop innovative ideas for your Blue Ocean Strategy
Conclusion
It’s important to note that a blue ocean strategy is not a one-time event but a continuous process. Companies that want to succeed in creating and capturing new demand in the area of environmental sustainability will need to continually innovate and adapt just as Patagonia have continued to do. This may involve investing in research and development, experimenting with new technologies, or testing new business models.
Environmental sustainability is a critical issue that requires a strategic approach. A blue ocean strategy can provide a roadmap for companies looking to navigate this space by creating and capturing new demand, differentiating themselves from competitors, and increasing efficiency and profitability. By taking a proactive and innovative approach to sustainability, companies can not only do well but that can also do good.
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