Blue ocean strategy is based on several important notions. First and foremost, a company using it chooses to create an uncontested market instead of entering into the existing one. More than that, the stress is laid on creating and capturing new demand instead of exploiting the existing demand. Additionally, companies giving preference to it choose to make competition irrelevant rather that beat it. Finally, the conventional logic behind value-cost trade-off is ignored (“MGMT 642| Blue Ocean Strategy”). Apple is known for having applied blue ocean strategy for its growth, and it can still be traced in the new products, as the changes were made at the level of corporate strategies back in the 1990s and they are still preserved today.
One of the recent products released is Apple Card. The most notable way in which it can be traced is that Apple did not create a new product. In essence, just like back in the 1990s, Apple uses value innovation when introducing its new product. In this case, they address the most notable issues faced by the customers and ignore the rules of the market operation. Privacy, simplicity, and transparency are the main values reflected in the new product (“Apple Card”), and it is what is commonly missing when it comes to credit cards offered by conventional banks. Based on this, the new values promoted by the company make up the new source of value that might potentially attract customers. What is also interesting is that company has not limited it to what it already has. This characteristic is common for value innovation strategic logic. Even though the new product is based on the already existing product (iPhone and Apple Pay), it is an expansion to a whole new market – finance and banking. In this case, another common feature of value innovation is applied: the company offers what customers really need. These include not only privacy and simplicity but also the absence of fees (this one is not common for the banking and financial sector) and well-developed accounting option (using a map for tracing expenditures and different colors for different groups of spending). One more value promoted by Apple that is not offered by the conventional banking is that any one can apply for the card. Making the process easy and understandable, new demand is potentially created that could drive the growth of this product popularity.
All in all, just like in the case of any other company driven by the value innovation strategic logic, Apple is driven by seeking the total solution customer are interested in. The main point here is that switching to this product eliminates the need for additional cooperation with the bank not to mention the opportunity to reduce the number of cards used to just one that can be found in one’s iPhone. In this way, the blue ocean strategy is traced in the new product because the company seeks for the ways to change the market by introducing the new products instead of seeking ways to enter it and compete in the currently given circumstances. What is interesting, however, it that the introduction of the Apple Card may seem logical, as the earlier features of the product (iPhone) made it easier. Specifically, Apple Pay as an option and privacy features (such as Face ID and Touch ID) made the product easy to understand, as an ordinary iPhone user already knows how they work. Given the advantages of the new credit card, Apple may unlock latent demand, thus contributing to the increase in profits in the future, and it is also a common feature of the companies using blue ocean strategy for their development.
- “Apple Card.” Apple, 2019, www.apple.com/apple-card/. Accessed 10 Sep. 2019.
- “MGMT 642| Blue Ocean Strategy.” YouTube, uploaded by VCU OMBAADMIN, 13 Jun. 2019, youtu.be/fMuNlAEHftE?list=PLMN4U0qAHlTkuID6CZuboz0vmu0_kia7Y. Accessed 10 Sep. 2019.