Red Ocean Traps exposes the limitations of benchmarking against rivals from "summary" of Blue Ocean Strategy with Harvard Business Review Classic Article “Red Ocean Traps” (2 Books) by W. Chan Kim,Renée A. Mauborgne
The Red Ocean Traps concept sheds light on the pitfalls of constantly comparing one's performance with that of competitors. When companies focus solely on outperforming rivals in the existing market space, they become trapped in a cycle of imitation and incremental improvements. This leads to a crowded marketplace where competition is fierce, and differentiation becomes difficult. Benchmarking against rivals can be limiting because it encourages companies to follow the same industry norms and best practices, making it challenging to stand out. By constantly looking at what competitors are doing and trying to do it better, organizations miss out on opportunities to create uncontested market space where competition is irrelevant. Moreover, benchmarking against rivals can stifle innovation and creativity within an organization. Instead of focusing on creating new value for customers, companies end up playing catch-up with competitors, leading to a lack of originality in products and services. This results in a marketplace where companies are constantly fighting over the same customers, driving down prices and eroding profitability. In order to break free from the Red Ocean Traps, companies need to shift their mindset from competing in existing market space to creating new market space. This involves challenging industry norms and redefining the boundaries of competition to unlock new opportunities for growth and profitability. By focusing on innovation and value creation, companies can carve out a unique position for themselves in the market, making competition irrelevant.- The Red Ocean Traps concept serves as a cautionary reminder for companies to not get caught up in the rat race of benchmarking against rivals. Instead, organizations should strive to break away from the pack and create their own Blue Ocean where they can thrive and prosper without the constraints of traditional competition.
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