The Blue Ocean Strategy

MoneyBestPal Team
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant Unabridged Edition 

The Blue Ocean Strategy is a way of thinking about business that challenges the conventional wisdom of competing in existing markets. 

Instead of fighting for a bigger share of a crowded and shrinking market, the Blue Ocean Strategy suggests creating new markets where there is no competition, or making the competition irrelevant.
The writers explain this concept with the metaphor of the red and blue oceans. 

The existing markets known as "red oceans" are those in which businesses vigorously battle for customers, frequently by cutting costs, raising standards, or introducing new features. Frequently, these markets are commoditized, saturated, and unprofitable. 

The new marketplaces known as "blue oceans" have little to no rivalry, allowing businesses to create value for their clients while still profiting from it. These markets are frequently profitable, inventive, and underserved.

How can you create a blue ocean for your business? The authors propose a four-step framework to help you do that: 


Identify the factors that the industry takes for granted but are no longer valued by customers. These are the factors that you can eliminate to reduce costs and complexity.


Identify the factors that the industry over-delivers on but are not essential for customers. These are the factors that you can reduce to optimize your resources and avoid overspending.


Identify the factors that the industry under-delivers on but are important for customers. These are the factors that you can raise to increase value and differentiation.


Identify the factors that the industry has never offered but are desired by customers. These are the factors that you can create to generate new demand and open up new market space.

By applying this framework, you can create a value innovation for your customers, which means offering them a superior value proposition at a lower cost than your competitors. This will allow you to break away from the red ocean of competition and swim in the blue ocean of uncontested market space.

To illustrate this framework, let me give you some examples of companies that have successfully applied the Blue Ocean Strategy:
  • Netflix: Netflix created a blue ocean by eliminating the need for physical stores, reducing late fees and return deadlines, raising the convenience and variety of online streaming, and creating a personalized recommendation system for its customers.
  • Cirque du Soleil: Cirque du Soleil created a blue ocean by eliminating the use of animals, reducing the reliance on star performers, raising the artistic and theatrical elements of its shows, and creating a unique fusion of circus and theater for its audiences.
  • Southwest Airlines: Southwest Airlines created a blue ocean by eliminating reserved seating, meals, and baggage fees, reducing flight delays and turnaround times, raising the frequency and reliability of its flights, and creating a fun and friendly culture for its passengers.

These are just some of the examples of how companies have used the Blue Ocean Strategy to create new markets and achieve success. 


The central idea of the Blue Ocean Strategy is to create uncontested market space or "Blue Oceans" where competition is irrelevant. Instead of competing within the confines of the existing industry or trying to steal customers from rivals, the strategy encourages businesses to develop uncontested market space.

The Blue Ocean Strategy suggests making the competition irrelevant by creating a leap in value for both the company and its customers. Instead of engaging in a head-to-head competition, businesses should focus on making the competition irrelevant by creating a leap in value for buyers and opening new and uncontested market space.

Innovation plays a crucial role in the Blue Ocean Strategy. It is not about offering more of the same or slightly better products or services in an existing market. Instead, it's about breaking away from the competition and creating innovative value propositions.

Cirque du Soleil is a prime example of a company that has successfully applied the Blue Ocean Strategy. Despite a long-term decline in the circus industry, Cirque du Soleil profitably increased revenue 22-fold over the last 10 years by reinventing the circus.

While the Blue Ocean Strategy can be highly effective, it also comes with risks. These include execution risks, imitation risks, and sustainability risks. It requires a clear understanding of the current market, customer needs, and the ability to innovate and execute effectively.

If you want to learn more about this strategy, you can purchase the book through the link below: