Blue Ocean strategy

file4681238436732Which ocean do you choose – the blue one or the red one?

The Blue Ocean Strategy is based on the idea, that the organizations could generate high growth and profits by creating new demand in an uncontested market space, rather than by competing head-to-head with other suppliers for known customers in an existing industry.

Blue Ocean Strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers.

While traditional competition-based strategies (“red ocean strategies”) are necessary, they are not sufficient to sustain high performance. Companies need to go beyond competing. To seize new profit and growth opportunities they also need to create “blue oceans”. Blue Ocean Strategy reorients the focus from competitors to alternatives and pursues both product differentiation and low cost.

The metaphors of red and blue oceans describe in fact the market universe:

Red Oceans are all the industries in existence today – the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.
Blue oceans, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored.

So, which ocean do you choose?

Here is very useful video about the Blue Ocean Strategy, which explains how to make the competition irrelevant. The material is with a length 1:04:41 and there is a long introduction – about 5 minutes, which could be skiped, but the rest of the material is really worth seeing.

Enjoy it!


Br,
K.K.

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