You can win the Investment Game with the Blue Ocean Strategy. Read How?

29^th May 2022

 

You can win the Investment Game with the Blue Ocean Strategy. Read How?

 

Dear Fellow Investors,

 

Namaste! Our last post was on YOU. Those who know how to manage them well will always become successful in any area of their choice. Now, when YOU are okay, you need to have the STRATEGY which is also equally powerful in the given market situations. Management Science talks about the two famous strategy. Red Ocean and Blue Ocean. By default, all goes for RED OCEAN strategy. But the Smartest of the Smart goes for the Blue Ocean. For the benefit of our readers, we are sharing the same today.

 

How a NORAML investor invests?

 

He doesn’t know much about investing so he will go to broker or the online broker in the current times. Open a trading account / demat account and start trading. He will study some technical / some fundamentals provided by broker’s side or study on its own and apply his knowledge on his trading or investing. Most of the times they will rely on Media and social media for their investment picks. 90% end up as losers. To suck them - they brought out Mutual Funds. 

 

Some will go for Mutual Funds and Sip. Some will go for small saving schemes and things like that. Some will invest in property or insurance policies. 

 

If you are doing all of the above you are following RED OCEAN STRATEGY. 

Red oceans represent all the industries in existence today—the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are well understood. Here, Investor’s try to outperform their rivals in order to grab a greater share of profit by trading in existing market. As the space gets more and more crowded, prospects for profits and growth are reduced. Products turn into commodities, and increasing competition turns the water bloody. To make the profit in such a situations for the traders is very difficult. 

What is BLUE OCEAN STRATEGY?

Do you remember what APPLE did when it launched its Personal Computer in 1978? It was something unique at that time. The same way it launched the SMART phone in 2006. The phone was the trend setter in the industry and today it is the most profitable company due to iPhone. 

Do you see OLA / UBER / Air BNB / OYO / Amazon and many such examples are in front of you. When they were launched it was BLUE OCEAN. Today they are also in RED OCEAN as everybody is joining the game.

Blue oceans denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. There are two ways to create blue oceans. In a few cases, companies can give rise to completely new industries, as eBay did with the online auction industry. But in most cases, a blue ocean is created from within a red ocean when a company alters the boundaries of an existing industry.

All the above examples are the creating the business from the existing RED OCEAN. 

How to apply Blue Ocean in Investing?

Look at Buffett. Look at Rakesh. Look at tons of Value investors who have not joined the market competitions and market belief. They created their own market out of the existing market and made tons of money for themselves and their clients. 

They didn’t do something different. They did the things differently. 

Let us see some differentiating points in RED and Blue Ocean Strategy? 

Red ocean strategy 

1.   Compete in existing market space. 

2.   Beat the competition.

3.   Exploit existing demand.

4.   Make the value/cost trade-off. 

5.   Align the whole system of a company’s activities with its strategic choice of differentiation or low cost. 

Blue ocean strategy 

·      Create uncontested market space. 

·      Make the competition irrelevant. 

·      Create and capture new demand. 

·      Break the value/cost trade-off. 

·   Align the whole system of a company’s activities in pursuit of differentiation and low cost. 

If you study the above you will find tons of examples in India. JIO in Mobile / Zerodha and Angel in Broking. 

 

The whole focus in on doing things differently than your fellow investors. 

 

It is said – if you do what everybody does – you will get what everybody gets. This is RED OECAN. 

 

What NEXT?

 

At Destiny Management we have created a Blue Ocean for all our clients when we study individual astrological and Vaastu reading with market and country specific astrological reading with BUFFETT approach to investing. This has given an edge to all our clients. They are well prepared for the coming time before the market events. 

 

We call it holistic approach to success.   

 

If you like, you can take advantage of our skill sets. 

 

Follow me on Twitter @hiteshmparikh /  WhatsApp - +91-9869425399 / www.hiteshmparikh.com

 

Learn a Lesson. Live with Passion & Invest with Reason.

 

 

Hitesh Parikh.