What is Blue Ocean Strategy? How to create a Monopoly in your Business?


Ever wondered why your Business is not making enough profits? Why the world of Business always seems an Unconquerable feat? Why do you’ve to discount your products before selling them?

This is a very detailed article on an exceptionally well-documented business strategy, Blue Ocean Strategy. This strategy’s implementation will allow you to solidify your business in the market and distinguish your own brand from other competing products in the market.

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This article is based on the following book:

What is Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant

What is blue ocean strategy, a book by Chan Kim

What is Blue Ocean Strategy or Blue Ocean Shift?

Blue Ocean Strategy - Fish jumps from one Bowl to Another (Change of Markets by firms)

Blue ocean strategy, also referred to as Blue Ocean Shift, is a marketing strategy where there is a single firm selling a differentiated product or there can be very few firms selling products that are differentiated in the market. Also, as there is no competition, there is no pricing pressure because of lack of competition in the market.

In the Blue ocean, the market is Uncontested, ie. Unoccupied. It may also mean that upon the arrival of the New Disruptive firm, the existing players will be rendered outdated or irrelevant. However, creating an Uncontested market space is not easy, for the fact it requires massive capital investment or a transformative innovation in the product or the service.

There is also a Follow-up book on Proven strategies to be applied by a Business to Establish a Blue Ocean Shift in the market:

 What is Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth

Blue Ocean Shift: Beyond Competing - Proven Steps to Inspire Confidence and Seize New Growth

What is Red Ocean Strategy or Red Ocean Shift?

Red Ocean Strategy vs Blue Ocean Strategy Image

Red Ocean strategy is a marketing strategy where there are a large number of firms selling closely related or even homogenous products. Because of similar products, the firms in the Red Ocean also face pricing competition from the other existing firms to drive up their Business Revenues.

The market in the Red Ocean is already saturated, ie. Occupied. Thereby, meaning that a lot of competition already exists in the market. Any new firm cannot expect Abnormal Profits even in the long run. The scope is there for normal and minimal profits that can be expected in the short run.

Therefore, it is a must for any Entrepreneur to balance the two aforementioned situations to make the best of the newly found opportunity in the market.

Another book I recommend to Stay Ahead of the Traps in the Red Ocean Market by the author of all Blue Ocean Strategy is:

Red Ocean Traps (Harvard Business Review Classics) 

Red Ocean Traps (Harvard Business Review Classics)

What is the Difference between Red Ocean Strategy and Blue Ocean Strategy?

To illustrate the difference between the Blue Ocean Strategy and Red Ocean Strategy, I’ve made an Infographic that lucidly explains the 6 vital differences between a red ocean market and a blue ocean market:

Difference between Red Ocean Strategy and Blue Ocean Strategy

  • Red Ocean Strategy focuses on Competing in the existing market space with the current firms. If a firm wins a customer, it’s automatically assumed that other firms have lost a prospective customer of that industry. Whereas a Blue Ocean Strategy focuses on creating uncontested or new market spaces. It aims to add new customers to the industry by creating a new product for the existing industry or differentiating the current product in such a way that new customers are attracted to that industry. In a blue ocean, if a prospective customer buys a product, it’s automatically the new firm’s win.
  • In a Red Ocean, firms try to beat the competing firms by lowering the price or playing several ‘traditional’ tactics, whereas, in a Blue Ocean, a firm differentiates its customers from all other players in the market. That is, making the competition irrelevant.
  • A red ocean strategy is focused on exploiting the existing demand driven by the existing customers in the market whereas a blue ocean strategy aims to create new demand and capture it by leading the innovation in existing products.
  • The mindset in a red ocean market aims to make a Value Cost trade-off, that simply put is the fall in value offered by the product due to the lower cost of the product. However, in a Blue Ocean Market, a product is assumed to carry new characteristics and features that allow it to break the value-cost trade-off and place itself apart from the rest.
  • Lastly, a firm following the Blue Ocean Strategy has to have greater intellectual power or financial leverage in order to add new features or characteristics to the product so that it renders the existing products irrelevant. This requires a higher initial investment, usually done by larger firms (Best example being Reliance investing heavily into R&D of Jio‘s 5G Technologies or Patanjali investing heavily into R&D for creating Ayurveda based Consumer goods). This is by far the biggest advantage of firms following the Red Ocean Strategy. That is, they require lesser initial investments to enter the market.

How to create a Blue Ocean Strategy? How to move your Business from Red Ocean to Blue Ocean? How to create an Uncontested Market Space?