So, let's take a look of your business positioning. In this matrix, I would like to divide things into two dimensions. The first dimension is - is your product or service using new technology or new way or new process to deliver? And the market that you are targeting - is it an existing market or is it a completely new market? So, let’s take a look at them one by one. On the bottom left, these are the products which are essentially old solution and we are targeting an existing market. For example, like, if you produce another shampoo, if you produce another pencil, these are product that are almost like commodity. People have been using it for years and the market, of course, they exist. So, this is what we call the ‘red ocean market’. Let's take a look of the bottom right corner. This is the new solution into an old market. Think about the digital camera. When it came out, it changed the way people taking photographs. The people have been taking photographs for a century. So, it is a new solution into an existing market. If you think about 3D cinema, people been watching movie for century, but it was not until the 21st century where we have 3D cinema that give you full-featured movies. And that's what also got me back into the cinema. Again, it is a new experience of something that we already know. So, it is a new solution into a old market. If we look at the top left corner, this is the market where we bring an existing product or an existing solution into a new market. Think about Coca-Cola. When it first came out in China, people in Europe and in US have been drinking this product for decades and it appears in China for the very first time. It is an existing product into a new market. Think about the café that you like to go to. Think about an international brand of café that you go to. And when that café first entered China, it is also bringing an existing product, existing experience into China. And finally, if we look at the top right corner which is the ‘blue ocean’ because this is the corner where we're talking about new solutions into a completely new market. Products like personal computers when it first came out in the 1980s. Nobody has a computer at home at that time. It is a very very first very very new product into people's home. A new solution into a completely new market. If you think about the social media as we know it today - the Facebook, the Weibo, the WeChat, etc., this technology and the business model did not exist, let’s say, 10 years ago. So, they are bringing us a new market and a new product as well. So, that's the ‘blue ocean’. Now where do your ideas sit on this map? Is it a ‘blue ocean’? Or is it ‘red ocean’? Or somewhere in between? And in each category, they have their pros and cons. So, let's deal with the pros and cons now. If you're in the ‘red ocean’, the pros and cons are - you have an existing market, so you know your customers actually understand the product. And you know people have been using this. But, on the other hand, your challenge will be - you also have a lot of existing competitors and you have to steal away market share from the competitor. Being an existing solution, you also have to show there's a new angle or you have something unique, something different that you can compete with your existing supplier. So, these are the pros and cons being in the ‘red ocean’. If we look at the bottom right corner where you are bringing in a new solution into an existing market, what are the pros and cons here? Well, to start with, like the ‘red ocean’ you know the market exists, you know the customer exist. There are people who need this product, who are using this product, but again you're facing fierce competitor because they already dominate the market. So, you have a lot of competitor to to deal with and you have to steal market share from them. And the fact that this is a new solution to existing market, people may or may not actually like your product. If you think about when digital camera first came out, the people who are taking film camera, they said, ‘we will never switch to digital, the digital camera are not good enough’. Think about where they are now. Everybody's using a digital camera. So initially the acceptance of your product is not certain. You have to change the customer to accept your way of serving them. They may be waiting for you. They may have been waiting for you for a long long time and they will switch in a heartbeat. You never know. And let's take a look of the top left corner. Old product into a new market - what are the pros and cons here? Well, the good thing is - you know this product work in some market anyway. You know you have a customer base. You have lots of experience and you may even have a brand that people recognize. So, these are the advantages. The challenges, however, even an existing product may not be accepted in a new market. Think about Coca-Cola into China. Is people going to accept it right away? Not really. But think about, let’s say, Starbucks. Is every market welcome them in open arms? Maybe. Maybe not. Because each idea, however tested in other markets, when it comes to a new market, it is a new challenge. Whether the market, the culture, the people would like the product is still largely unknown. But you do have the advantage of knowing that it works in some markets. You do have the advantage of being funded by an existing market. What about the ‘blue ocean’? In this quadrant, you are bringing in new market and with a new product. The pros and cons. So, are people going to accept this product? Do they like it? Would you eventually become the winner? These are highly uncertain. You need to spend a lot of time, effort and money to educate the market, to raise market awareness because it’s something so new. It could very well be that it is a very viral thing that catch on very quickly; but that's highly uncertain. Good thing is if you are indeed the first one to capture the market, you may be the winner-take-all. However, it is also possible that in this market, the fastest copycat wins. Whoever's just behind you, they walk over your mistakes and they just copy the ideas that work. That could very well be the true winner. So, that's the uncertainty in the ‘blue ocean’. But if you win, you make your name as the leader in this market. But you must continue to innovate. So, there we have it - the pros and cons of the different market positioning. Think about where you are on this map. Think about the pros and cons that will affect your business. How would you use the advantages to your liking? How would you deal with the challenges?
