Nintendo Wii

The first example of blue ocean strategy comes from computer games giant, Nintendo, in the form of
the Nintendo Wii.
The Nintendo Wii launched in 2006 and at its heart is the concept of value innovation. This is a key
principle of blue ocean strategy which sees low cost and differentiation being pursued
simultaneously.
To reduce costs, Nintendo did away with the hard disk and DVD functionality found in most game
consoles and reduced the processing quality and graphics. At the same time, Nintendo introduced a
wireless motion control stick to differentiate itself against the market offering. This allowed the
company to offer a range of new features and benefits that hadn’t been seen in the world of gaming
previously such as the ability to use a games console to get fit or to play in a larger social group.
By pursuing value innovation, Nintendo could go beyond competing against the likes of PlayStation
and X-Box in a crowded and fiercely competitive red ocean. Instead, it was able to open up a new
market entirely. The Nintendo Wii, with its innovative, new features and affordable price point,
appealed to an entirely new and expansive market – a blue ocean – spanning non-gamers, the elderly
and parents with young children.

Yellow Tail
The development of Yellow Tail, a new wine brand from Casella Wines, is another great example of
blue ocean strategy in action. And it’s a case study which clearly demonstrates the rewards blue ocean
strategy can bring within three years of entering the market, Yellow Tail had become the fastest
growing wine brand in US history.
How did the brand achieve this level of success so rapidly? Yellow Tail recognized that most wine
brands operate in a red ocean where competition for market share is fierce. They realized that by
reducing or eliminating the elements that the industry competed on and differentiating themselves,
they could create a blue ocean and tap into a new set of customers.
Yellow Tail abandoned the traditional focus on prestigious vineyards and aging. And they ditched the
complex terminology normally found on wine bottles which can be prove intimidating for potential
customers. Instead, Yellow Tail created a drink which was sweet enough to appeal to the masses and
therefore capture demand from beer and spirit drinkers rather than just wine buffs. And they made it
easy to buy by only introducing two varieties: one red and one white. The rest, as they say, is history.