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Are you swimming in a red or a blue ocean?

Red Ocean vs. Blue Ocean GTM Strategy

So what is "red ocean" or a "blue ocean" approach in terms of go-to-market strategy for a company?

The concept is introduced by W. Chan Kim and Renée Mauborgne in their book Blue Ocean Strategy.

Red oceans are basically the industries in existence today – the known market space, where industry boundaries are defined and companies try to outperform their rivals to grab a greater share of the existing market.

This strategy argues that

“cutthroat competition results in nothing but a bloody red ocean of rivals fighting over a shrinking profit pool.”

Companies should instead look for new market space and ways to reinvent the industry. In short, avoid head-to-head competition and focus on innovation & disruption.

Where on the other hand, the goal of a Blue Ocean Strategy is for organizations to find and develop “blue oceans” (uncontested, growing markets) and avoid “red oceans” (overdeveloped, saturated markets).

A company will have more success, fewer risks, and increased profits in a blue ocean market.

Blue oceans denote all the industries not in existence today – the unknown market space, unexplored and untainted by competition. Like the ‘blue’ ocean, it is vast, deep and powerful –in terms of opportunity and profitable growth.

The chart below summarizes the distinct characteristics of competing in red oceans (Red Ocean Strategy) versus creating a blue ocean.

Taking a Blue Ocean approach means your goal isn’t to outperform the competition.
Instead, your aim is to redraw industry boundaries and operate within that new space, making the competition immaterial.

How to create your own blue ocean?

These were the general questions discussed and answered in order to highlight blue ocean opportunities ;

  1. What do we do well? Why do customers choose us and stay with us?

  2. What do our competitors do? Why might our ideal customers choose a different solution?

  3. Where are the red oceans? Which features and benefits do we compete head to head with our competitors?

  4. What is our blue ocean? What do we provide our customers that no one else can?

Some Blue Ocean Strategy examples

As you might guess, below are the most famous examples of creating their unique & unexplored markets ;

  • Netflix: Did you know that before unlocking a blue ocean Netflix was one of many DVD rentals? Netflix did not invent movies, but it offered a unique opportunity to watch them online.

  • Uber did not compete with taxi owners; instead, it created an app connecting drivers and customers in seconds.

  • Airbnb changed the whole traveling industry by simply creating a platform where people looking for accommodation would find those who can offer it.

  • Apple is known as the most innovative company. But none of their products were the first to apply the technology they use.

Apple followed the blue ocean strategy when developing iPhone.




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