In an age where streaming movies was unheard of, Netflix entered a blue ocean by offering just that. Data adapted from the book Blue Ocean Strategy Netflix as an example of BOSīlue ocean examples show around us all the time. Their analysis covering 108 companies showed that 14% of the launches that aimed at creating blue oceans contributed to 38% of the revenue and 61% of the total profits. Professors Kim and Mauborgne, in their study spanning over three decades, quantified the impact of creating blue oceans on a company’s growth in both revenues and profits. How effective is the blue ocean strategy? Any business that enters this space can address the market without competition.

In blue oceans, competition is irrelevant as the rules of the game are waiting to be set.

This is an untapped area where demand is yet to be created and opportunities for highly profitable growth exist. Products are commoditized, and cut-throat competition turns the ocean “bloody” – hence the word Red.īlue Oceans, in contrast, denote the unknown market space – all the industries that are not currently in existence. This market space is crowded with competition and prospects for profits and growth are limited. Companies try to outperform rivals to grab a greater share of existing demand. This is where industry boundaries are defined and accepted, and competitive rules are set. Red oceans denote the known market space in which all industries currently operate.

It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.” Understanding Blue Ocean Strategy What are oceans?īusinesses operate in two kinds of market space called oceans – Red and Blue. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. Over three decades of their combined research culminated in the book called “ Blue Ocean Strategy”, first published in 2005.īy definition, “Blue Ocean Strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. The term Blue Ocean Strategy (BOS) was first coined by Professors Chan Kim and Renée Mauborgne, who set out to understand what it takes in a competitive, global environment for business to not just to cope and survive but thrive. This article is a comprehensive exploration of the Blue Ocean Strategy that provides organizations with the frameworks and analytical tools to create and capture uncontested markets and unlock vast growth opportunities.

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