?Blue or Red Ocean Strategy

One of my clients asked what those were..so here is some info

Blue Ocean Strategy is a marketing theory from a book published in 2004 which was written by W. Chan Kim and Renée Mauborgne, professors at INSEAD*.


What Is The Blue Ocean Strategy

Blue oceans strategy is the approach that suggests a company is better off searching for ways to play in uncontested market places instead of engaging with competition in existing marketing spaces. It is the idea of trying to find market spaces that are free of competitors by creating and capturing new demand, making the competition irrelevant. An example of a blue ocean strategy is Netflix. Netflix created uncontested marketing space by selling TV shows over the internet which no one else was currently doing. By doing this they made the competition irrelevant, creating and capture new demand for a service not currently available on the market. By doing this they were able to break the value-cost trade off by providing better value than cable TV (because you could watch any show you wanted at any time, without commercials) at a lower cost than cable TV. By entering a blue ocean they were able to pursue low cost and differentiation leadership compared to the alternatives to their product.

Why You Want To Operate In Blue Ocean Markets

Blue oceans are areas of the market where your competition is currently not. They lead to easy uncontested growth (from demand that is created not fought over), rapid growth in sales and profits due to a lack of competition, wider and deeper market opportunities because the space is not yet explored.


Why You Don't Want To Operate In Red Ocean Markets

In a red ocean environment the market becomes more fierce and crowded as competitors try to steal share from each other. As companies compete with each other prices are reduced, profits fall and growth is limited to the size of the current market. Products become commodities or very small niche segment players and the cutthroat competition turns the ocean red with blood. I like to think of it as a naval battle field versus oceans that are uncontested with no enemies. Those types of oceans are blood free and lead to easy, safe sailing.

Source: https://profitworks.ca/blog


Here's a presentation by Dvir Zihar, Simple Solutions I found online

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