Blue Ocean Strategy

The universe of markets is divided into two parts. The red ocean comprises of the existing companies. The industry perimeters are well defined and each company competes against all the others to create a space for itself.

The blue ocean is formed by the industries not in existence today. Here the market space is created and not competed in. Competition does not exist. A company creates its own blue ocean when it innovates. It has to deliver in its products what is considered to be of value by the customers and eliminate features that are not considered to be of good value.

The book, “Blue Ocean Strategy” is written by Profs. W. Chan Kim and Renee Mauborgne of the Insead Business School in 2005. Similar strategies have however preceded this. Profs. Jonas Ridderstrale and Kjell Nordstrom had a similar reasoning in their book, “Funky Business” written in 1995.

Prof. P. Guha
(Globsyn Business School)