Blue Ocean
Professors W. Cahn Kim and Renée Mauborgne came up with the common sense (but unique) concept of using a blue ocean as a financial metaphor, in their book appropriately called Blue Ocean Strategy, published in 2004.
In the book, they describe red oceans as all the industries currently in existence. Their products are well-known and popular, but competition runs rampant, hence the red, or bloody, ocean. In order to gain more market share, they have to outperform their rivals with better prices or better quality of service, plus a heck of a lot of advertising. As the industry gets even more crowded, profits can decline.
A blue ocean, on the other hand, represents an unknown market that has little or no competition. It might be a brand new company, or one that’s been around for a while but is creating a new product set or services.
Think of Starbucks, which entered a rather crowded coffee shop market (who would pay $4 for a cup of coffee?), but offered tea, smoothies, and fancy coffee drinks, as well as comfortable seating, to encourage customers to hang around for a while. And, uh...buy more coffee.
Another blue ocean would be eBay, which started a totally new industry of online auctions. Then there’s Cirque du Soleil, which did not try to imitate or compete with traditional circuses, but invented their own category by blending opera and ballet...and losing the performing animals. Rather than fighting over a limited set of customers, a new demand was created.
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Finance: What is PayPal?4 Views
Finance allah shmoop What is pai pao All right Well
in the beginning there were rocks And then there were
animal helps Then beads and jewelry then cash then credit
cards on dh Finally today papal Yeah So the history
of payment technology has seen some changes paying for stuff
quickly and easily using a few folded bills in your
wallet Is gray paying for that stuff while in your
ninja turtle One z pajamas from the comfort of your
lazy boy violence Even better So yeah paypal is an
electronic payment system that takes paying for things online with
a credit card One step further It's still routes payments
through the user's bank But everything can be done with
the well it's Just the click of a button once
you've linked paypal to your bank account Well there's no
more typing in long strings of numbers digging a credit
card out of your back pocket to check the security
code and dates and all that on that business you
just say yes Thank you kindly I would liketo buy
these anti gravity boots via paypal And just like that
those boots are well on the way to your front
Door for better or worse you know provided they've been
weighted down enough space Well paypal was originally created to
help people pay for mostly ebay purchases specifically as well
as you know a few adult art films but as
of two thousand fifteen well ebay and hey pal have
been separate companies You know breakups are hard So these
days paypal is just well doing its own thing helping
people everywhere process their monetary transactions How sweet and philanthropic
of papal to do that right They do it all
for free Yeah No not at all They don't do
it all for free In fact they're pretty expensive Paypal
is in the business of making money there A publicly
traded company Well how did they do that Well two
ways Mainly First they collect a service feet on transaction
Almost the time As long as you're just a sending
twenty bucks it's a mom for her birthday or to
your buddy kin for your entry into the football pool
Well the transaction is free to you but a merchant
i eat Anyone selling a product pays a fee on
every transaction Generally that fee is anything ever take about
Thirty cents per transaction And then there's a small surcharge
In addition based on the percentage in the size of
the transaction right Well the other way papal makes money
is by earning interest on all that money sitting in
your account like it's just sitting there And then they
invest it and they make more in interest than you
do Just sitting with cash Right Five hundred fifty dollars
You've been socking away online for a rainy day Well
paypal has been making it rain because they invested in
Yes Maybe they only make two per cent of that
money and interest But there are a lot of people
let money sitting there Paypal account So with billions or
tens of billions or hundreds of billions of dollars making
two percent two papal with almost no costs associated with
that that's Pretty margin friendly kind of business right Add
it all up and pay pallor doing just all right
for themselves So yeah until the next great revolution in
quick and easy payment processing happens Paypal and other similar
sites like venmo and apple pay and maybe stripe Well
there are where it's at Still a little tricky to 00:03:21.005 --> [endTime] trade your animal pelts though for all that dollars
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