Zerodha’s Genius Blue Ocean Strategy
Zerodha recognized a significant untapped market of retail investors and traders in India deterred by high brokerage fees. They aimed to attract this segment by offering lower cost and seamless trading experience. Zerodha became India’s discount broking business leader with the Blue Ocean business strategy. Zerodha’s genius business strategy enabled a tremendous trade and investment volume increase in the Indian stock market in recent years. Zerodha is the first to launch a highly advanced platform with several innovative features. This helped them to capture huge market space, and competition became irrelevant in the Share Broking business. Their aggressive business model is termed the Blue Ocean Business Model.
Blue Ocean Business Strategy
In the blue ocean strategy, the companies try to develop new markets or grow existing ones by redefining the limits rather than engaging in intense competition in the current needs. This entails figuring out new client niches, unmet demands, and untapped market potential. The companies will capture the business through innovative ideas rather than engaging in But-throat competition with traditional business players. They will create uncontested market space and make the competition irrelevant. The strategic approach adopted by him may be referred to as the ‘Blue Ocean.’ The existing competitors’ market space is called the ‘Red Ocean.’ The traditional players are competing for limited market space. But the leader may create and capture new market space with innovative ideas and technological advancement. The business pioneering in the segment will not be facing competition for newly created market space or demand. Others will try to follow the leading company.
Zerodha created a blue ocean of uncontested market space by focusing on this underserved market. The company’s focus on value innovation, cost leadership, technology, customer education, and word-of-mouth marketing played pivotal roles in its success. By adopting these strategies, Zerodha was able to create a blue ocean of uncontested market space, disrupt the traditional brokerage industry and attract a large customer base.
Business implementing the Blue Ocean Strategy has higher risk and potential for exponential growth. The leading business can highlight entirely new products in the market, and the competitors will struggle to exist. The customers or investors are the beneficiaries in the blue ocean market, from where they will get high-quality products and services that suit their requirements at low cost. Thus, the Customers or investors may be able to demand more, creating new demand or market space. The market players are looking for alternative products and services to satisfy their customers or investors with innovation and research.
Zerodha Successful Business Model
Zerodha became the leader in Indian Stock Market, broking with advanced technology, a new business model, and user-friendly platforms. With the introduction of ‘Zerodha Kite,’ Zerodha revolutionized the Indian Stock Market. Due to various regulatory measures taken by the Securities and Exchange (SEBI) Indian Stock Market became the top professional and highly secured Stock Market in Asia. Zerodha’s innovative platforms and other initiatives enable investors to execute intelligent trading.
The innovative and user-friendly platform – Zerodha Kite – is introduced with highly informative tools and features like real-time data, simple charts, instant order execution, etc., helping retail investors to execute their trades with suitable investment decisions and to improve their trading skills. Innovative tools used by institutional investors made available to retail investors have enabled them to follow professional trading practices. This helped Zerodha to attract more investors in India.
Discount Brokerage Model
Traditional brokers charge a higher rate of brokerage which is not affordable to retail investors. Zerodha introduced an innovative business model – discount brokerage- which significantly affected the Indian Stock Market. This model played a significant role in shaping the landscape of online stock trading in India.
Zerodha’s innovative tools and platforms
Zerodha’s tools and platforms, like Zerodha Direct Mutual Fund, Zerodha Coin, etc., benefit investors since they are very convenient and economical. Zerodha Sensibull enabled Option traders to experience diverse trading strategies and hedging options. The platform includes sophisticated charting tools, current market information, and a smooth trading experience. Using technology, Zerodha has given traders an advanced and effective platform for trading.
Spreading Out Financial Literacy
Zerodha introduced ‘varsity’ in the prime time when stock market retail participation was booming when Investors were losing and earning money in the euphoria of trading in the stock market. Financial illiteracy and lack of investment knowledge have started burning investors’ capital. Varsity gave investors every bit of investment and trading knowledge to take highly probable stock market trades. Before YouTube education became trending, Zerodha Varsity was the crucial cog in the wheel of stock market education.