Blue Ocean

Red oceans represent existing industries and markets where industry boundaries and the rules of competition are well-defined. Companies strive to outperform rivals and grab a bigger share of existing demand. As the space gets crowded, fierce competition turns the water bloody. Competitive or market competing strategy is about how to occupy red oceans. By contrast, blue ocean, or market-creating strategy, is about how to create and capture unknown markets where demand is created rather than fought over. In some cases, this spawns entirely new industries, but most blue oceans emerge when a company alters the boundaries of an existing industry. The simultaneous pursuit of value and cost is the logic of Blue Ocean strategy. Companies that can create blue oceans usually reap the benefits for 10 to 15 years, because they are hard for rivals to copy. To realize blue ocean potential, companies should chart a strategic course, past traditional industry boundaries to create new market space.