BLUE OCEAN

Business universe consist of two distinct types of space, Red and Blue ocean. Red ocean represents all the industries in existence today. In red ocean industry boundaries are defined and accepted; rules of the game are well understood. Here companies try to grab the share of existing demand. As this ocean becomes more and more crowded, profits reduces, growth hampered and competition turns water bloody. Blue Ocean denotes all the industries in existence today- untainted by competition. In Blue Ocean demand is created rather than fought over. Ample opportunity and ample profits are two shells of Blue Ocean. There are two ways to create a blue ocean.  Completely new industries.  Created from a red ocean. Examples of Blue Ocean from new industries are innumerable. Take any set of 30 years and one can find Blue Ocean created. In last 30 years there has been a plethora of multibillion dollar Blue Ocean: Mutual Funds, cellular Telephones, Bio technology, discount retailing, online auctioning, coffee caf, Information technology etc. Example of Blue Ocean created from Red ocean is of Cirque. Cirques growth occurred in an industry which was and is still on all time declining stage, Circus (a form of entertainment). Children the mainstay of circus preferred play stations (again a Blue Ocean) over circus acts. On the other side costs were constantly increasing. Increasing completion has made circus a Red Ocean. Surprisingly Cirque, a potential new entrant in 1984 was able to increase revenues by factor of 22. They reinvented the circus. They didnt made money confines of existing industry. Instead they created an uncontested market place and made competition irrelevant. They changed their traditional customers and entertainers. A new group of customers- adults, corporate clients were targeted and given included entertainers such as ballet dancers, opera singers etc. this enabled them to charge extremely high price for an unprecedented varied forms of experience under one roof.