BLUE OCEAN STRATEGY: CREATING NEW MARKET SPACES FOR INNOVATION IN SELECTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Organizations operation in highly competitive business environment that makes desirable level of performance a difficult goal to set. To escape high risks and threat associated with operating in highly contested market, Blue Ocean Strategy (BOS) presents a strategic framework that challenges traditional competitive dynamics by advocating for the creation of uncontested market spaces, termed "blue oceans," rather than competing in overcrowded, "red ocean" markets. This study explores the application of Blue Ocean Strategy (BOS) for creating new market spaces for innovation using Guaranty Trust Bank in Ilorin, Kwara State as a money deposit bank as the study area. The objectives were to investigate the relationships between Cost Differentiation Strategies, Value Innovation, Customer Satisfaction, and Customer Loyalty. Adopting a quantitative research design, a survey method was employed with questionnaires administered to 104 staff and 384 customers. Data analysis utilized Pearson correlation and SPSS software. Findings revealed significant positive correlations between Cost Differentiation Strategy and Customer Satisfaction (r = 0.781, p < 0.01) and Value Innovation and Customer Loyalty (r = 0.824, p < 0.01), highlighting the strategic impact of Blue Ocean Strategy on enhancing customer outcomes in the banking sector. The study concludes that effective implementation of principles of Blue Ocean Strategy such as adoption of cost differentiation strategy and value innovation can enhance customer satisfaction and loyalty. It was therefore recommended that investing in cost differentiation and value innovation strategies, strengthening customer engagement, and prioritizing employee training should be prioritized by organizations especially in the banking industry to achieve increase customer satisfaction and loyalty and ultimately sustain competitive advantage.