Because the markets ('oceans') are relatively new, there is frequently little to no competition. This area is deep, vast, and powerful in terms of opportunities and profitable expansion, much like the ocean itself. The concept is based on the presumption that industry structure and market boundaries are not set in stone and can be altered by the actions and beliefs of industry participants. This eliminates the need for constant battles with competitors. To thrive, they should concentrate on finding new market niches ripe for growth (so, the blue oceans), with the aim to achieve long-term success. The water becomes crystal clear: what is the Blue Ocean Strategy?Īs opposed to crimson red oceans, the Blue Ocean Strategy allows “ any organization to step up to the challenge of creating blue oceans in an opportunity-maximizing, risk-minimizing way”. Because of this, there are at least a few alternative brands that can offer you services that are comparable. As each brand in the market gains knowledge from the mistakes made by the rivals and then modifies similar (or nearly identical) strategies to maintain growth, their options are becoming progressively more limited. They are surrounded by competition offering similar products, promoted as slightly different experiences (with surely different prices). The majority of “old” industry giants fall into this category, including traditional big brands like Ryanair, Southwest, Audi, Tesco, or Strabag. To remain competitive, they had to metaphorically become the sharks and turn the waters of competition red and bloody (hence the term: Red Ocean Strategy) by competing against multiple companies to outperform them and feed on a larger share of the market. Chan Kim's phrase, 'The Red Ocean Strategy,' encapsulated the then-current state of the market by highlighting how everyone was wasting energy in a never-ending struggle for a limited resource (usually: a piece of an already defined market). Red Ocean StrategyĪt the time the book was published, Renée Mauborgne and W. Overall, the theory is the result of an extensive analysis of more than 150 strategic decisions made over the course of more than a century, separated into 30 industries. They were first presented in the 2004 book ' Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant' (see the authors’ blog here).

Chan Kim and Renée Mauborgne co-authored the innovative company management theories known as the Blue Ocean Strategy and Red Ocean Strategy at the start of the twenty-first century.

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