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Santosh Singireddy .

How Jio Made Competition irrelevant for them by implementing a blue ocean strategy?

According to the book ' blue ocean strategy ' published by W. Chan Kim and Renée Mauborgne, professors at INSEAD there are two types of oceans in market .1) Red Ocean and 2) Blue Ocean

What is the Red Ocean ?
All the businesses have to compete in a space where they have a lot of competitors and their business growth is less because of the competition in the market. This is called a red ocean where the competition and market space is less.

What is Blue Ocean Strategy?
For a New entrant in any business, it is tough for them to compete in red ocean. So they usually follow a blue ocean strategy where they offer their product or service at a low cost to open a new market space and create new demand. This will make competition irrelevant and create monopoly in the market.

Before the entry of Jio Indian telecom industry is competed by companies like Airtel, Idea, Vodafone, BSNL, and other companies. They were competing in red ocean and there is no space for new telecom companies.

So Jio implemented its blue ocean strategy by offering data at cheap prices to make competition irrelevant for them in the Indian telecom industry.

Originally Posted Here
12 Comments

Swaroop Evani

I think there's a misinterpretation:

blue ocean is typically referred to the case where there is little or no competition because the nature of the product / service is so unique, HENCE the potential for profits is high.

red ocean is where the competition is strong, profits are low and typically where price becomes the only differentiating factor. most companies are going to risk "bleeding" money when the prices fall further, because of say a new entrant, hence the color red.

Jio has a good competition to beat in each segment it is in, it might win but they are going to use up a lot of their warchest to give discounted services to drive out competition. this is not blue ocean strategy, this is a simple example of a monopolistic practice, with has predatory pricing as one of the foundations.

blue ocean bases itself on innovation as one of the key driving factors, Jio isn't innovating anything as much as I understand.

Santosh Singireddy

ya however IAM talking about jio's entry strategy to Telecom industry I guess this falls under blue ocean strategy.

Swaroop Evani

could you please explain how?

Santosh Singireddy

even though they offered in low cost . This helped to create new demand for mobile data usage . When it comes to innovation and technology before jio s entry into the market 4g is still a new thing . They invested more than any other firm on 4g network infrastructure.

Swaroop Evani

it's still price differentiation buddy, they didn't pioneer 4G in India and having a lot of money (whether it is from oil or getting huge investments) do not make it a blue ocean company.

at best they would lead the market when 5G comes up because they will have the license to manufacture tech in India because of Intel and Qualcomms involvement, and ofc a series of policy "coincidences".

Mahi Mk

The foundation of Blue ocean is considered to be Value innovation. Value innovation is the simultaneous pursuit of differentiation and low cost, creating value for both the buyer, the company, and its employees, thereby opening up new and uncontested market space.

It is not only about making competition irrelevant by offering a bunch of services at a low price. That will still be competing based on price. How else are they creating differentiation?
They don't seem like they have captured an unexplored market either. Have they?

Swaroop Evani

exactly, their is no innovation and the Telecom is already a low-margin sector. to me the entirety of Jio platforms (in the respective segments and as a whole) just appear to be an attempt at driving out competition by lowering prices.

Mahi Mk

They have been doing this since the very begining, starting with destroying textile businesses by entering the market, lowering the price, capturing it and establishing monopoly then increasing the cost.
It is kind of sad that some undesirable business traits are being touted as master strokes and analysed in an attempt to learn something good!

Swaroop Evani

Thank you! it's heartening to see that some can see through them.

lowering price and flexing your political will to enjoy ale your predatory practices are not innovations. if only people can see that Ambanis are NOT working for the country's or people's benefit.

Mahi Mk

even if someone is working for their own benefits and the customer's benefits are not a priority, there should be ethics. Probably ethics has different definition for different people here.
I stay away from commenting on topics that are mostly emotionally driven or tribe driven coz it is very apparent that people don't want to see the point instead tend to bash the person or their beliefs. What is the use of spending our valuable time and energy on such things.
But in this particular post the entire concept seemed to be misunderstood and it felt like wrong business practices are being normalised and may be idolised, hence dropped a comment.

Swaroop Evani

absolutely, from a learning perspective, to say the least, this is not what blue ocean strategy is

Soham Sarkar

Jio is strictly a red ocean company

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