Blue Ocean Strategy

Definition of 'Blue Ocean Strategy'

Blue Ocean Strategy is referred to a market for a product where

there is no competition or very less competition.

This strategy revolves around searching for

a business in which very few firms operate
and where there is no pricing pressure.

Blue Ocean Strategy can be applied across sectors or

businesses. It is not limited to just one business.
 Blue Ocean Strategy - Description

• In today's environment most firms operate under intense

competition and try to do everything to gain market share.

• When the product comes under pricing pressure there is always a

possibility that a firm’s operations could well come under threat.

• This situation usually comes when the business is operating in a

saturated market, also known as 'Red Ocean'.
 Blue Ocean Strategy - Description

• When there is limited room to grow, businesses try and look for verticals or
avenues of finding new business where they can enjoy uncontested market
share or 'Blue Ocean'.

• A blue ocean exists when there is potential for higher profits, as there is
now competition or irrelevant competition.

• The strategy aims to capture new demand, and to make competition

irrelevant by introducing a product with superior features.

• It helps the company in make huge profits as the product can be priced a
little steep because of its unique features.
Characteristics of Blue Ocean
Strategy

7
Principles of Blue Ocean Strategy:

8
Characteristics of Red Ocean Strategy:

9
 Difference between Red & Blue
Ocean Strategies:
Basis Red Ocean Strategy Blue Ocean Strategy

Industries Red Oceans represent the Blue oceans, denote all the
fiercely competitive arena industries not in existence today-
where most companies the unknown market space,
compete untainted by competition.

Competition This strategy focus on the This strategy focuses on creation

competition within the existing of uncontested market space.
market space.

Approach Approach of red ocean strategy Approach of the red ocean strategy
is to beat the competition. is to make the competition
irrelevant
 Difference between Red & Blue
Ocean Strategies:
Demand
In Red Ocean strategy higher
In Blue Ocean strategy weightage
weightage is given to exploit
is given to develop future demand.
existing demand.

Goal
Goal of this strategy plan is to Goal of this strategy plan is to
make value-cost-trade-off brake the value-cost-trade-off.

Alignment of
Align the whole system of a
System Align the whole system of a firm’s
firm’s activities with its
activities in pursuit of
strategic choice of
differentiation or low cost
differentiation or low cost
 Difference between Red & Blue
Ocean Strategies:

Profit Profit opportunity of using Red Profit opportunity of using Blue

Opportunity Ocean Strategy is low. Ocean Strategy is High.

Customer Red Ocean strategy focuses on Blue ocean strategy focuses on

Focus existing stream of customers. creation of new customers.

In Red Ocean strategy system In Blue Ocean strategy system

System approach is towards low cost approach is towards creativity and
Approach
and differentiation innovation.
 Individuals can create Blue Ocean to re-invent
themselves or even their companies

Sportswoman Marie Kom:

Showbiz Superstar Amitabh Bachchan

Steve Jobs - iPAD

Ratan Tata _ Nano car

Taking a Blue Ocean approach means your goal isn’t
to outperform the competition. Instead, the aim is to
redraw industry boundaries and operate within that
new space, making the competition immaterial.
Guts to Glory Blue Ocean Strategy Mission
Necessities
When there is will there is a way too – Desire, Discipline &
Dedication

Fortune favours the brave: Stay true to the course & be ethical
always