University Mohammed V, Rabat

Faculty of Legal, Economic

and Social Sciences,
Sala Al Jadida Write by: Kaoutar Hmammssi

Blue Ocean Market/strategy vs Red Ocean Market/strategy

֍ Red Ocean Strategies
A red ocean strategy involves competing in industries that are currently in existence. This
often requires overcoming an intense level of competition and can often involve the
commoditization of the industry where companies are competing mainly on price. For this
strategy, the key goals are to beat the competition and exploit existing demand.
“The key goals of the red ocean strategy are to beat the competition and exploit existing demand.”

One industry in which a red ocean strategy would be necessary is the soft drink industry. This
industry has been in existence for a long time, and there are many barriers to entry. There
are industry leaders in place such as Coke and Pepsi, and there are also many smaller
companies also in competition for market share. There’s also limited shelf space and vending
spots, well-established brand recognition of popular, current brands, and many other factors
that affect new competition. This causes the soft drink industry to be very competitive to
enter and succeed in.
֍ Blue Ocean Strategies
Denote all the industries not in existence today, the unknown market space, untainted by
competition. In blue oceans, the new demand is created rather than fought over. There is
ample opportunity for growth that is both profitable and rapid.
There are two ways to create blue oceans.
*The first way, as happened in a few cases, is when a company gives rise to an entirely new
industry. An excellent example of a blue ocean strategy is eBay, which did it with the online
auction industry, or Cirque du Soleil with the circus industry.
*The second more common way is to create a blue ocean within a red one. This happens
when a company alters the market boundaries of an existing industry, as Curves did within
the saturated fitness sector.