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imagine running a business with literally zero competition. You’ll be at the forefront of
your industry, and you can conquer the world if you so choose. This is what the blue ocean
strategy is all about!
The blue ocean strategy is not the same as ‘niching down.’ It’s quite the opposite, in fact.
When you niche down, you’re limiting yourself to a subset of your industry’s known
market space. But with the blue ocean strategy, you’re creating that market space. You’re
laying the groundwork for a new market that has never been tapped before.
Blue Ocean Strategy vs. Red Ocean Strategy
Red Ocean
Competing in the red ocean means aiming to beat your competition
There are tons of competition in the existing market space
It’s a shark-eat-shark world out there
Limited growth only
Blue Ocean
Pioneer a product or service in uncontested market space
You’re at the forefront – you’ve got no competition (yet)
You create and capture the demand for your brand
Unlimited potential for growth
Which strategy would you rather employ? The red ocean strategy where your chances of
success depend on beating your competition? Or the blue ocean strategy where you
literally have no competition.
Blue Ocean Strategy Principles
According to the authors themselves, W. Chan Kim & Renee Mauborgne, the blue ocean
strategy has 8 core principles:
It’s grounded in data
The strategy pursues differentiation and low cost
It creates uncontested market space
It empowers you through tools and frameworks
Another principle is it provides a step-by-step process
It maximizes opportunity while minimizing risk
It builds execution into strategy
Lastly, the blue ocean strategy shows you how to create a win-win outcome
Blue Ocean Strategy Examples
Cirque du Soleil. The circus industry is no longer as popular as it once was. The
traditional circus catered to kids. But nowadays, there are literally tons of entertainment
options kids can choose from (video games, anyone?). However, Cirque du Soleil
reinvented the circus and gave it a new, exciting format. Now, both kids and adults can
enjoy the circus and experience first-class entertainment!
Southwest Airlines. Instead of competing with other airlines, Southwest employed the
blue ocean strategy by positioning itself as a competitor to land-based travel. Now, people
who avoided flying (and preferred driving or riding the bus) due to expensive plane tickets
could finally fly on the cheap and get to their destinations quickly.