What is a blue ocean strategy?

Kim & Mauborgne: Blue Ocean Strategy is a way to make the competition

irrelevant by creating a leap in value for both the company and its customers.





2) What are red and blue oceans, and why do you use the colors red and blue?

Kim & Mauborgne: We use the terms red and blue oceans to describe 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. Here companies try to outperform their

rivals to grab a greater share of existing demand. As the market space gets crowded,

prospects for profits and growth are reduced. Products become commodities, and

cutthroat competition turns the red ocean bloody. Hence, the term “red” oceans.

Blue oceans, in contrast, denote all the industries not in existence today—the

unknown market space, untainted by competition. In blue oceans, demand is created

rather than fought over. There is ample opportunity for growth that is both profitable

and rapid. In blue oceans, competition is irrelevant because the rules of the game are

waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of

market space that is not yet explored. Like the “blue” ocean, it is vast, deep, powerful,

in terms of profitable growth, and infinite.