The Blue Ocean Strategy: What, Why, How?

Team Pepper
Posted on 25/07/2210 min read
The Blue Ocean Strategy: What, Why, How?
The competition is fierce, and the customers are limited. What special can you do in such a scenario to leave your mark? The Blue Ocean Strategy is your answer.


The Blue Ocean Strategy came into the limelight after a book was launched by Renée Mauborgne and W Chan Kim in 2004 titled ‘The Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant’. However, it was being practiced much before that by companies. But, what is the Blue Ocean Strategy?


Imagine that you are an entrepreneur heading a company. Now, imagine that the products and services you provide aren’t new. You have innumerable competitors in the market, and it’s getting tougher for you to stand out from the crowd. You have tried improvising on your product, but there’s only so much that can be done in that area. In that case, how would you carve a niche? This is precisely what the Blue Ocean Strategy is about. Read further to know the Blue Ocean Strategy’s meaning. We’ll also take you through its examples and key benefits.



What is The Blue Ocean Strategy?

The introduction above has hinted at the meaning of the Blue Ocean Strategy. Let’s delve deeper into it. The Blue Ocean Strategy is about creating new products and services or making enormous modifications to the existing ones, such that the competition is removed altogether.

The term ‘blue ocean’ was coined by the authors of The Blue Ocean Strategy book, INSEAD Business School professors – Renée Mauborgne and W Chan Kim. In simpler words, entrepreneurs or innovators develop empty oceans or ‘blue oceans’ where there is no competition for their products.

These empty or less occupied markets can generate great profits for the creator. Basically, blue oceans are unknown marketplaces. These are the industries that have not been invented or discovered yet. They have enormous potential and opportunities to grow and prosper. To top it off, there is no pricing pressure because there is no other firm to compete with you and your product. This is possible with an invention that creates a brand-new demand for something that has never existed. You could say that the creators of blue oceans are innovators and pro marketers. They don’t just create a product but create a new-found demand for it, too.

In contrast to this are the ‘red oceans’ or saturated markets. These are the existing markets and industries that are full of companies. These companies create the same product to solve the same problem, just with a different brand name. It’s impossible to create a well-known, separate identity in such a scenario. You will only end up drowning in the vastly populated red ocean with cut-throat competition.




The Blue Ocean Strategy introduces a new product in the market that is never heard of before, thereby generating new demand and rendering competition irrelevant as there is no other company to compete with. As a result, the product can be as steeply-priced as the creator wishes.


Let’s take a couple of examples to understand this better. Bloomberg created a blue ocean by targeting traders and analysts with their financial information. Until their arrival, companies like Reuters and Tolerate targeted IT managers with their financial information. Bloomberg identified that it’s the group of traders and analysts who actually require quick information when the market is active to make rapid decisions. Likewise, Apple identified the insane amount of illegal music sharing that was being done throughout the world. To remedy that, it created iTunes and conquered the digital music space.

How to Create a Blue Ocean Strategy?

In the market, every company wants its share along with visibility. This is what helps them make profits. But, when uncountable brands exist in the same space and fight for the same thing, it becomes impossible for any one brand to be seen. As mentioned before, we are talking about red oceans. Blue Oceans, on the other hand, are markets with little or no competition.


It’s generally entrepreneurs who resort to Blue Ocean Strategy marketing. These are the new-age thinkers who seek monopoly and uncontested competition. Therefore, they choose to either expand their brand or innovate their existing product to implement a Blue Ocean Strategy.


The authors of the first book on the Blue Ocean Strategy authored another one published in 2017, titled ‘Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth’. In this book, they have compiled many illuminating examples of big and small organizations that tried their hand (and succeeded) at the Blue Ocean Strategy. They have pulled out learnings from these experiences and enlisted five steps to replicate the creation of blue oceans successfully.


Source: Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth, by Renée Mauborgne and W. Chan Kim


  1. Analyze the place where you wish to begin creating the blue ocean. Before everything else, put together a strong team capable of achieving this milestone.
  2. Understand the current state of play. This will guide you on your way forward.
  3. Try to find out the points that are restricting the size of the industry that you are in. Thereafter, find your group of non-customers that you need to tap into.
  4. Now that the major research and analysis have been done, it’s time to reconstruct the boundaries for the new market and develop opportunities that will help you create the blue oceans. This is the main part of the process.
  5. Once you have listed down several ways of creating blue oceans, weigh the pros and cons of each to zero down on one Blue Ocean move. This must be followed by several tests and experiments to see whether it will work the way you want it to. Finally, implement your Blue Ocean Strategy.


This five-step process will help you make a seamless shift from a red ocean to a blue ocean. It will also guide you to garner new customers tactfully.


What are The Key Benefits of The Blue Ocean Strategy?

From the Blue Ocean Strategy’s examples, we understand that this ocean strategy is advantageous for the creators. It is packed with profits and a lot more. We have comprehensively listed some benefits of creating blue oceans.

1. Zero or negligible competition

The main benefit of creating a blue ocean is facing no competition whatsoever. Once you have created a demand that didn’t exist before, competition is irrelevant. You will be in a market that has not been tapped before. This gives you a lot of room to grow and prosper.

2. No price pressure

Think about it – in a blue ocean strategy; you have no competitors. You are providing a solution that no other company has. You have a group of potential customers waiting to buy your product. Thus, you can charge higher prices as long as it suits the paying capacity of your customers. Higher prices mean bigger profits.

3. Less stress

When you have a product that nobody can compete with, and you are in a market where no other brands exist, you automatically have less stress as compared to the companies in a red ocean. After all, competing and trying to stay on top of other companies is stressful.

4. Maximized opportunity with minimum risk

Once you have created a blue ocean for yourself, you have room to experiment and grow. There is no downside to it. You are, anyway, the only brand in the entire market. Once you’ve got your customers hooked on to your solution, the risk of losing them is next to null. So, you can refine your ideas and test the waters with the modifications with no stress.

5. Creating a win-win outcome

A Blue Ocean Strategy is a perfect amalgamation of value, profit, and people. To create a blue ocean, you manufacture a product with outstanding features. Once you garner a good enough customer base, you set reasonably high prices and earn profits. And finally, since you enjoy uncontested leadership in the market, you have a great customer base to back your product. The entire process of developing a blue ocean strategy helps brands become more human. Thus, winning people’s confidence is not a tough job for these blue ocean creators.


While the Blue Ocean Strategy is difficult to achieve, its results are nothing short of a dream. If you wish to create a blue ocean, remember to focus on customer satisfaction instead of profits. As there are no competitors, half of your job is already done the moment you create the blue ocean. As mentioned, happy customers are who define the success of your blue ocean strategy. Naturally, customers will want to invest in your product or service if it is innovative, viable, functional, and good enough. This will result in profits and uncontested leadership for a very long time.


The book on the Blue Ocean Strategy states that “cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool”. Instead, businesses should seek new market opportunities and ways to reinvent the sector. In a nutshell, stay away from getting ahead of your competition and concentrate on innovation. Also, remember that a blue ocean can turn red very easily. Your success metric is the amount of time you can keep the blue ocean from turning red. Therefore, it’s critical to always conduct multiple tests of your product before launching it. Tactical planning and a good strategy will help you achieve your goal.

Key Takeaways

● Blue Ocean was named by Renée Mauborgne and W. Chan Kim in 2004 in a book titled ‘ The Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant’. This marketing strategy has been in use for a long time.

● A blue ocean strategy refers to creating an uncontested market space that has not been tapped into yet.

● A red ocean refers to a saturated marketplace full of other sharks or companies. In the red oceans, all companies are working to sell the same product to the same set of buyers. Naturally, the competition is cut-throat, and no company can stand out.

● If you have an innovative product or service that can create a blue ocean, the opportunities you will get are endless.

● Entrepreneurs and innovators are the ones who mostly work towards getting out of a red ocean and creating a new market with new demand.

● The Blue Ocean Strategy has been applied by many companies, including Apple, Canon, Ralph Lauren, Philips, and the like.

● The purpose of the Blue Ocean strategy is not to outperform the competitors or to be the best in the industry. Instead, when you are in the Blue Ocean, your goal is to redraw industry lines and operate within that new zone, making competition more difficult to exist.

● In a Blue Ocean, consumers don’t have to pick between value and affordability. Differentiation and low cost can be achieved if a company can determine what consumers value and then rethink how to give them that value.

● If you want to implement the Blue Ocean Strategy, get the right team and start working on your blue ocean moves. Develop alternatives and test each one thoroughly to zero down on one that will get you success.

● The Blue Ocean Strategy has innumerable benefits, such as working stress-free in a market with zero competition. Being the only shark in the entire blue ocean, be prepared to enjoy a monopoly.



1. What does the Blue Ocean Strategy mean?

The Blue Ocean Strategy means starting a business selling a product or service that either does not exist in the market or has less competition. It is different from the Red Ocean Strategy, which means operating a business in an industry with existing competitors. The Blue Ocean Strategy is based on the belief that market boundaries are not permanent and can be restructured based on the players’ actions. As a result of the uncontested market share, the company has no pricing pressure and enjoys a monopoly.

2. Give an Indian example of the Blue Ocean Strategy.

The perfect Indian example of the Blue Ocean Strategy is OYO Rooms. OYO Rooms, previously known as, was started when we didn’t even know it was needed. The company was established in an industry with zero competition, giving it a monopoly. OYO Rooms helps customers find budget hotels with value for money equivalent to any five-star hotel. This standardization is maintained by running quality checks. A major factor that led to the success of OYO Rooms was the execution of the Blue Ocean Strategy in the hospitality industry.

3. What are the four stages towards building up the Blue Ocean Strategy?

When thinking of a new business idea in the industry, think of the following four stages to ensure functionality:
Buyer Utility: You have come up with a product or service. Now, consider whether it has buyer utility or not. Will the audience like to buy your product or avail of your service?
Price: Now that there is no pricing pressure, is the price set by you accessible for your buyers? Is it too expensive, or will they be able to afford it?
Cost: You’ve concluded that the price set by you is perfect for your buyers. Now the next thing to figure out is whether you can attain your cost target to profit at the strategic price fixed by you.
Adoption: Once all the steps above are done, it’s time to implement the Blue Ocean Strategy.

4. Is JIO a Blue Ocean Strategy?

No, JIO is a telecom company. So, it’s not a Blue Ocean Strategy per se. However, their marketing strategy was so on-point that it gave them a monopoly. Their primary marketing strategy included giving data at dirt-cheap prices. This gave them that much-needed edge and rendered competition irrelevant. Initially, they were competing with established companies like Airtel and Vodafone, but their strategy helped them open up a new market space and create new demand for their product.

5. What are the companies using the Blue Ocean Strategy?

With business becoming tougher and industries getting increasingly competitive by the day, companies must get out of the red ocean and create their respective blue oceans of uncontested market space, making the competition obsolete. A few companies that adopted this, which worked out great in their favor, are iTunes, Bloomberg, Philips, Ralph Lauren, and Canon.

6. What is the Red Ocean Strategy? Give an example.

In a Red Ocean Strategy, the competition is fierce, and companies fight amongst each other to stay afloat. Instead of increasing their customers, their focus is generally on ensuring their existing customers’ retention. The bottom line is making more profits than the competitors. Vehicle and telecom companies are good examples of companies functioning in the Red Ocean. All the companies in these industries are working to serve the same thing to their customers. If you plan to establish a company in the red ocean, you may want to create a market disruption. You must cause a stir in the market or create a specialized demand; else, you won’t be noticed.