"Blue Ocean" Thinking: Not Just For Elon Musk and Tesla

Dec. 10, 2019

Our industry can be somewhat “old school” and traditional. How can you, as an independent tire dealer, “open up new space” in your market, drive increased demand for what you offer and set your business apart from the competition?

My advice? Look to Elon Musk and the “blue ocean” strategy that he is applying. Love him or hate him, the controversial entrepreneur recently made headlines when he unveiled Tesla’s Cybertruck concept. To date, Musk says Tesla has received 250,000 orders for the truck, despite the fact that it won’t be released until 2021.

How did he do it? How can you take this blue ocean approach and make it your own?

First, let’s look at what this truck means for the auto industry and what we can learn from Musk’s strategy. Despite glitches during the Cybertruck’s unveiling, the vehicle is gaining massive press around the world.

This is a one-of-a-kind product and its features are truly impressive. It has a top-notch, four corner air suspension, and Tesla designers also added in a wraparound rock rail, which protects the passenger doors and the rear panels. When it comes to tires, the truck seems to be equipped with products that are well-sized and designed for off-road capability. 

So, what does the term “blue ocean” mean? Put simply, blue ocean is unexplored, new areas of the market.

The blue ocean concept comes from a book of the same name, published in 2005 by W. Chan Kim and Renee Mauborgne, two professors from the European Institute of Business Administration. The idea is that if a business can open up a new space in the market, it will be able to create its own demand and make the competition irrelevant. (In contrast, a “red ocean” is a crowded market, so packed full of other sharks fighting over fish that the water has turned bloody.)

Kim and Mauborgne challenged their readers to let go of the limitations of industry structure and market boundaries, and value innovation instead.

Blue ocean describes the vast and deep unlimited potential waiting in unexplored market spaces. I believe that Tesla’s Cybertruck is an excellent example of blue ocean strategy. It certainly looks different than anything else that has come before it. There are other electric pickup trucks on the market, but the stainless steel construction of the Cybertruck makes it unique. 

A lot of the time, Blue Ocean products also are more cost-efficient than anything that has come before them. Tesla has created a very easy entry point for those who want to pre-order the vehicle. All you need to do is make a simple $100 deposit, which is 100% refundable. This is a relatively affordable price for someone to pay for bragging rights that they have a Cybertruck on the way.

Other pickup truck manufacturers are operating within the long-established boundaries of the current market. They are competing in a frenzy in the blood-red ocean, trying to beat each other on fuel efficiency, towing capacity and more. New pickups even look somewhat similar. And their manufacturers seem to be targeting the same type of buyer. 

Instead of bringing out just another truck, Tesla did something different by creating this eye-catching and different, futuristic vehicle. Tesla has been able to add new value at a lower cost, at the same time. 

How can you take the blue ocean concept and apply it to your dealership?

I would argue that you first must let the current limitations of your red ocean market go and then brainstorm ideas that are completely different – and even, some might say, “bizarre!”

It’s also valuable to seek creative and innovative talent - people who have the ability to see blue ocean potential. A blue ocean strategy can inspire us to think outside the box. Look at tire dealers who are innovating in the mobile tire installation space, for example.

As 2019 winds down, I encourage you to leave the red ocean and instead adopt a blue ocean mentality. This will position you for even greater success in the year ahead.

A 20-year automotive aftermarket veteran, Mike Cioffi is the founder of TireTalent.Com, a talent and recruiting firm that specializes in the tire, auto, truck, OTR, farm and rubber industries. He can be reached at [email protected].