What is Blue Ocean Strategy? Definition of Blue Ocean Strategy, Blue Ocean Strategy Meaning and Concept
The Blue Ocean Strategy is a strategy that seeks to drive competitiveness and business differentiation.
The Blue Ocean Strategy was created by W. Chan Kim and Renée Mauborgne, professors at INSEAD Business School. This theory was coined in 2005, after the publication of a book entitled precisely "Blue Ocean Strategy".
This theory defends that the competition is the success or failure of companies, so that differentiation is essential. However, the theory considers that, in recent years, companies' strategy has focused on competing in markets saturated by competition (red ocean), instead of finding new market niches in which to differentiate themselves (blue ocean).
The blue ocean strategy is a well-known strategy in the world of business management.
The best business schools define it as one of the best designed strategies.
The blue ocean and the red ocean
The blue ocean strategy bases its hypothesis on the two-ocean strategy. In this sense, two oceans that, as we will see below, refer to different market situations.
In the first place, the blue ocean refers to those ideas that, without existing, seek to create a market that demands them. That is, opportunities, market niches, in which competition does not exist or is negligible. In other words, markets that are not exploited and that offer an opportunity.
Second, the red ocean refers to the opposite. Thus, we say that we are facing a red ocean when we speak of a market full of competition, exploited by it and where the possibilities of finding a business niche are very limited or do not exist.
The idea is to go from a red ocean to a blue ocean.
Principles of the blue ocean strategy
The fundamental principles of a blue ocean, and which indicate the steps to follow for the development of this strategy, are the following:
- Create new spaces for consumption.
- Focus on the big picture, and not the numbers.
- Know beyond the existing demand.
- Ensure the viability of said strategy.
How to find our blue ocean?
To find a blue ocean, 6 different ways have been defined by which to reach the blue ocean.
These routes are as follows:
- Industry exploration.
- Exploration of strategic groups.
- Exploration of the chain of buyers.
- Exploring the offers of complementary products and services.
- Exploring the emotional factor of buyers.
- Exploration of the dimension of time.
Through these 6 ways, we can reach a blue ocean. The pathways outlined above represent various approaches to finding a blue ocean in which to operate.