What is the Blue Ocean Strategy?

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  • Topic: Blue Ocean Strategy, Risk, Ocean
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  • Published : April 17, 2013
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What is Blue Ocean Strategy?

by

Nattida Sae-Iw

MBA Student

What is Blue Ocean Strategy?

Let’s start with the metaphors

To understand the term of Blue Ocean, imagine a market universe composed of two sorts of oceans: Red Oceans and Blue Oceans.

Red Oceans represent the existing market space which is known market. Companies in red oceans are competitive-base; they are fighting each other and aim to get a bigger market share from their competitors. The world now is globalized, the competitions are fiercer than ever, they are battling on the same demand thus this is bloody competition. That’s why it’s called red oceans.

Blue Oceans are new, defined as unknown market space. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue oceans are the opportunity for highly profitable growth. The space is new, no battle so it’s clear market, that’s why this is called Blue Ocean.

Productivity ManagementCreativity Management

Companies are always successful in the red ocean. How many companies tend to follow the right side of the diagram? Most of companies are tending to follow the left side as that’s normal practice and easier. The right side is a risk taking and companies are trying to avoid it. The red ocean is always matter and is a fact of business life. However, with exceeding demand and more competitors, companies need to go beyond competing. To grow business opportunity, the companies need to create blue oceans.

Unfortunately, blue oceans are uncharted and large. Without guideline and frameworks to create blue oceans is seen to be risky. Therefore, there are some methodologies to help on how to create them.

According to the article, it can be summarized that the basic structure of creating blue oceans are as follows:

• Focus on Future, answer yourself with these questions whether...
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