Blue Ocean Strategy

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Blue Ocean Strategy is referred to a market with no or less competition for a product. This strategy is centred on searching for business where only a few firms function and with less or no pricing pressure. It can be applied across different sectors or businesses and is not limited to any one.

The term Blue Ocean Strategy is coined by professors W. Chan Kim and Renee Mauborgne and used in their book “Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant” in the year 2005.

With intense competition among businesses, firms try their best to gain market share and with pricing pressure influencing their functioning, their existence in the market in under threat. This situation arises when a business is operating in a saturated market, referred to as Red Ocean.

When there is limited scope for growth, firms look out for verticals or avenues to find new business where they can capture a market and enjoy uncontested market share or otherwise ‘Blue Ocean’.

Blue ocean strategy aims at capturing new demand and making competition irrelevant by introducing new products with superior features and characteristics. This helps a firm to price the product much higher and earn profits due to its unique features.

 For example, Apple ventured into digital music in the year 2003 with the launch of iTunes. Here, Apple users can download legal and best in quality music at a reasonable price making traditional sources of music distribution irrelevant

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