Make the Competition Irrelevant: Create Demand vs. Fight for Share

You raised, or you set the aggressive number, and now the whole plan reads like a war. Take three points of share from the incumbent. Out-rank them on the terms they already own. Outspend the challenger who just outspent you. Every line item is a fight for a sliver of a market someone else already controls.

Here’s the problem with that plan, and it isn’t effort: you’ve accepted the boundaries of the fight before you’ve thrown a punch. You’re competing for a bigger slice of a fixed pie, in a market defined by the very competitors you’re trying to beat. That’s a grind you can win and still lose — because winning it costs more than the slice is worth.

There’s another move. It’s older and better-documented than most of the growth tactics in your deck, and it’s the one that actually makes your competitors’ advantages irrelevant instead of trying to out-muscle them.

The reframe: stop capturing demand, start creating it

The distinction comes from W. Chan Kim and Renée Mauborgne’s Blue Ocean Strategy — one of the most-cited pieces of strategy work of the last twenty years, and worth revisiting precisely because everyone name-drops it and few founders actually apply it.

Their language: red oceans are the markets that already exist. The boundaries are drawn, the rules are known, and every competitor is fighting over the same demand. As the water fills with rivals, prices bleed, margins thin, and the ocean turns red. Blue oceans are the demand that doesn’t exist yet — the market space you create, where there is no competition because you defined the category.

And the payoff isn’t sentimental. In a study of business launches across 108 companies, Kim and Mauborgne found that 86% were line extensions — incremental improvements inside the existing market — and only 14% aimed at creating new demand. The split in results is the whole argument: the 86% incremental launches generated 62% of revenues but just 39% of profits. The 14% that created new market space generated 38% of revenues and 61% of profits. The companies fighting for share did most of the work and kept the least. The companies creating demand did the opposite.

That is the trade you’re implicitly making every time the plan defaults to “take share.” More revenue, thinner profit, harder fight.

Why this matters more when you’re under pressure, not less

The instinct under a growth mandate is to double down on the known market — it feels safer and more measurable. “Rank for the terms buyers already search” is legible to a board in a way “create demand that doesn’t exist yet” is not. So the pressure that should push you toward a blue ocean pushes you deeper into the red one, competing on the incumbent’s terms with less budget than the incumbent has.

You will not out-red-ocean a bigger competitor. Their moat is real. What you can do is stop treating their moat as the edge of the world. Value innovation — Kim and Mauborgne’s term for the core move — means breaking the assumed trade-off between differentiation and low cost by changing what you compete on entirely, so the incumbent’s advantages stop mattering. Cirque du Soleil, the book’s canonical example, didn’t try to beat Ringling Bros. at the circus. It dropped the animals and the star performers (the expensive parts everyone assumed were the category) and added theatrical storytelling and an adult ticket price — and created an audience the circus never had. It didn’t win the circus war. It left it.

How to find your blue ocean (a working checklist)

You don’t discover new demand by brainstorming harder. You find it by interrogating the assumptions your whole category shares. Four questions, adapted from the Blue Ocean “Four Actions” framework — run your offer through them:

1. Eliminate: Which factors that your industry takes for granted should be removed entirely? Not reduced — gone. These are usually the expensive things everyone competes on because everyone always has, that the customer doesn’t actually value. (Cirque eliminated the animals.)
2. Reduce: Which factors should be dialed well below the industry standard? Where has the category over-served the buyer, adding cost and complexity in a race no customer asked for?
3. Raise: Which factors should be pushed well above the standard — the things buyers quietly settle for because no one has ever done them properly?
4. Create: Which factors should you introduce that your industry has never offered? This is the one that opens the new demand. What would make the current competition beside the point?

The tell that you’ve found something: your answer would make your competitors’ spreadsheet advantages irrelevant rather than requiring you to match them. If your plan still lives or dies on beating them at their own game, you’re still in the red ocean.

One honest caveat, because pretending otherwise is how this gets misused: not every business needs a blue ocean, and “create a new category” is not a license to ignore a market that’s working. Plenty of good companies win real profit executing sharply in a red ocean. The point isn’t that share-fighting is always wrong — it’s that it should be a choice you made, not the default the growth number backed you into. If the fight is getting more expensive every quarter and the slice isn’t getting more valuable, that’s your signal to ask a different question than “how do we take more share?”

The question underneath the growth number

Most growth plans answer “how do we get more of the existing demand?” The more valuable question — the one a senior marketing partner should be forcing onto the table before the budget gets allocated — is “is there demand we could create that no one is competing for?”

Those two questions send your money, your team, and your next year in completely different directions. One is a war of attrition against a better-funded incumbent. The other makes the incumbent’s funding beside the point. The founders who scale past their category don’t usually out-fight it. They redraw it.

Sources: W. Chan Kim & Renée Mauborgne, Blue Ocean Strategy (Harvard Business Review Press, 2005) and “Blue Ocean Strategy,” Harvard Business Review (October 2004) — the 108-company launch study (86% line extensions = 62% of revenue but 39% of profit; 14% new-market creations = 38% of revenue and 61% of profit), the red/blue ocean framing, value innovation, and the Four Actions framework. Cirque du Soleil is the authors’ primary worked example.

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