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The blue ocean strategy is a unique approach for facing industry competition posed by other market players. The concept was introduced and popularized by Chan Kim and Renée Mauborgne. This strategy relies on nullifying the threats of competitors instead of facing it head on. The blue ocean strategy holds great significance in the contemporary business environment, where industries are becoming highly competitive in nature, thereby making it quite difficult for firms to survive. For a management student it is vital to learn about the Blue Ocean strategy, as it can be implemented in your marketing essay. It can help you to design strategies that allows a firm to sustain and grow even in competitive markets.

The Blue Ocean strategy refers to the pursuit of differentiation and low-cost advantages, simultaneously to open up a new market space with new market demand. This strategy focuses on creating uncontested markets, and operating there, which makes the threat of existing competition irrelevant. It is based on belief that industrial structure and market boundaries are not absolute and can be reshaped by the market players. Thus, companies can exist in the same market location without being a competitive threat to one another.

Blue Ocean and Red Ocean

The Blue Ocean strategy was developed by conceptualizing markets as oceans, which led to the creation of red and blue oceans. The red oceans are contemporary industries where the market players compete and fight against each other like sharks in an ocean, thereby making the water bloody, hence the term Red Ocean. On the other hand, in the Blue Ocean, the market players do not need to fight against each other as they are all cater to uncontested market spaces. Let us look deeper into the key characteristics of both red and blue oceans so that you can apply the concept in your college essay.

Red Ocean Strategy Blue Ocean Strategy

Firms operate and compete with each other in existing target markets

Firms create uncontested market space and operate there without facing competition

The primary objective is to beat the competitors, through aggressive marketing strategies

Render competition irrelevant, by adopting innovative strategies

Exploit the existing market demand

Create new market demand and exploit them

Make the trade-off between value and cost

Bypass the trade-off between value and cost

The business model is aligned with its strategic choice of low-cost advantage or differentiation advantage

The business model is aligned with its firm's pursuit of low-cost and differentiation.

The Red Ocean denotes all the existing industries, that are present in the known market space. In this case, the boundaries for operating in the industries, along with the rules of competition are well known and accepted by market players. In the traditional red ocean environment, the companies try to outperform each other by to capture the greatest possible marketing share in the existing market. The firms adopt set of aggressive marketing strategy, in order to attract the customers from highly contested market space. As more companies enter the market, the market space becomes crowded and the potential for growth and profit making is diminished.

Contrastingly, the Blue ocean refers to the unknown market space, untouched by competition. In the Blue Ocean, new demand is created for the customers, which offers enough opportunities for the firms to grow and become profitable. In this case, the competition is rendered irrelevant, because the firms are catering to different uncontested markets and the rules of market competition has not been defined yet. One of the most iconic examples of real-life adoption of the Blue Ocean strategy comes from Canon. Traditionally, the copier and printer manufacturers targeted the corporate clients where the devices are meant to be used in office spaces. However, the canon targeted the users at home with their small, compact and easy to use copiers and printers. This allowed Canon to cater to a new market space away from the highly contested market of corporate clients. Thus, it can be stated that Blue Ocean strategy followed by Canon allowed the company to make its competition irrelevant.

Blue Ocean Strategy Tools

Various strategic tools have been developed so that the Blue Ocean strategy can be applied to any organization. For a management student, this can prove to be quite beneficial as you can implement the Blue Ocean strategy in your own paper, without any paper writing help. Let us look at some of these tools

Value Innovation

The value innovation allows a company to pursue differentiation and cost advantage simultaneously, thereby creating high value for both the customers as well as for the organization. It is one of the key strategies for creating uncontested markets. The buyers’ value comes from the offered benefits minus the price, and the firm’s value comes from the price of the product minus the cost. Therefore, value innovation can be achieved from aligning the entire system of utility, price and cost.

In order to save costs, the firm can choose to eliminate and reduce the key factors on which the industry competes, which as a result can lead to generation of firm value. On the other hand, the buyer value is augmented when the firm offers new value elements that was never offered before.

Strategy Canvas

The strategy canvas is a graphical diagnostic tool which represents the existing strategic landscape and the proposed future landscape, simultaneously.

The X-axis represents the various different factors that an industry is focused on and invests in, whereas the Y-axis represents the offering level received by the customers for each of those factors. The strategy canvas helps in identifying the status quo of the industry in terms of value offering to the customers using all the different industry factors. By identifying all the factors that the market players compete for and the respective value offering offered to the customers, a company can create a new strategic framework which invests in factors which are not been contested for and offer values which have not been offered before. The diagram of Strategy Canvas shown above, highlights how the Blue Ocean strategic move is different from current industry value curve. From the organizational point of view, the strategy canvas can be used to reorient the focus of the customers to new value offerings, which is striking different from the ones offered by every other industry player. While developing your own business plan, the strategy canvas can prove to be quite beneficial for you, because it can help you to identify the areas that are being contested for, allowing you to cater in the areas that have not been touched before.

Four Action Framework

The Four Action Framework is another strategic tool for Blue Ocean strategy which is particularly used to create new value curve.

Traditionally, an organization need to have trade-off between low cost advantage and differentiation. However, this four-action framework can help in breaking the trade-off and challenge current industrial practices. This framework consists of four key questions which can help a firm in reshaping its current strategies. Those are as follows:

Raise: What are the factors which needs to be raised above the current industry standards?

Create: What are the factors that needs to be created that the industry has not offered before?

Eliminate: What are the factors that needs to be eliminated on which the industry has competed for a long time?

Reduce: What are the factors which needs to be reduced below the current industry standards?

Six Paths Framework

The Six Paths framework presents a clear overview of how a company can overcome the competition, without having to beat. According to the Blue Ocean Strategy, there are several possibilities that exists in the market that can help a firm to render the competition irrelevant. This framework can help an organization to identify the most viable one that can help it to overcome the competition

  Traditional Competition Creating a Blue Ocean


Focuses on other market players operating in the industry

Looks beyond the current industry and into alternative sectors

Strategic Group

Builds strong competitive position in the chosen strategic group

Looks for new strategic groups in the industry

Customer Base

Seeks to serve customers better

Creates a new customer base

Product Scope

Maximizes the value of the existing product categories

Creates new complementary product categories

Utilitarian-Hedonistic Orientation

Improves the price performance

Redesigns the orientation


Redesigns marketing strategy to adapt to market trends

Shapes new market trends over time

These are some of the strategic tools that an organization can adopt to follow the Blue Ocean approach. The Blue Ocean strategy takes an innovative path in dealing with competition, which can prove to be quite effective in fostering growth and profitability even in a market with steep competition. By this point, you must have had a clear understanding on Blue Ocean Strategy and how it can be applied to any marketing case study or marketing essay topics. Simply apply any one of the strategic tools to create a unique business model which allows you to operate without any competitive threats.

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