Blue Ocean Strategy
Kathy Cox
MKT/421
August 10, 2015
Evelyn Bisenz-Johnson
Blue Ocean Strategy
Introduction
In the business world, there are two types of business space which consists of Red Ocean and Blue Ocean. Red Ocean space is where all the competition sits, the known market, in this space businesses try to beat their competitors to seize a bigger portion of the present demand. As this market becomes increasingly crowded, the potential for profits and growth gets smaller and smaller. As the competition continues to increase the water turns bloody hence the name Red Ocean. Blue Ocean space is the gap in the market, the unknown market space; this space is essentially competitor free. In the blue ocean, there is no fighting for demand instead it is created. So why is Blue Ocean Strategy Important? What is an example of a Blue Ocean Product? What is an example of a Red Ocean product? All these questions and more will be answered but first let’s take a deeper look into Blue Ocean Strategy.
Blue Ocean Strategy
“The term “blue ocean” is an analogy to describe the wider potential of market space that is vast, deep, and not yet explored,”(Kim & Mauborgne, 2005, p. 106). There are two ways to enter the Blue Ocean the first is to create a whole new Industry. The second is a new market created from inside the Red Ocean by breaking out of the pack and finding a way to make a competitive product unique and desirable. An example of breaking out of the Red Ocean is Cirque du Soleil. By combining favorable features from two distinct already existing markets, they created a single unique product with advantages over the competition in both markets.
By looking at consumer wants and needs, using innovation, creativity, and the four P’s of the marketing mix a company can start to move into a Blue Ocean. Using the framework to a new value curve set by Kim & Mauborgne (2005) of reduce, create, raise, and eliminate a company can move into an uncontested...