The Blue Ocean Strategy
The Business Universe Consists of Two Kinds of Markets
Red Oceans
Blue Oceans
Red Ocean Strategy
Blue Ocean Strategy
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Compete In Existing Markets
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Create Uncontested Market Space
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Beat the Competition
•
•
Exploit Existing Demand
Make the Competition Irrelevant
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Create and Capture New Demand
Blue Oceans Are Not A New Phenomenon Which of Today’s Industries Were Unknown A Hundred Years Ago?
Automobiles Pharmaceuticals
Management Consulting Music Recording
Aviation Petrochemicals
Which of Today’s Industries Were Unknown Forty Years Ago?
Mutual Funds
Discount Retailing
Cellular Phones
Express Package Delivery
Biotechnology
Coffee Bars
The Paradox: Red Oceans Still Prevail
Despite the indisputable success of blue oceans, however, most companies continue to compete in red oceans.
Red Ocean Initiatives Don’t Pay
By focusing on incremental innovations, companies are failing to act in their best interests.
Creating Blue Oceans Is Far More Profitable
Why Do Companies Still Focus on Red Oceans?
Because That’s How They’ve Operated for Years and Years.
Traditional Strategy
Blue Ocean Strategy
A Shift in Mindset
It’s not always about technology innovation.
Incumbents aren’t necessarily at a disadvantage.
Blue oceans create high barriers to imitation. Such as: • • •
Economic Barriers Organizational Barriers Cognitive Barriers
Chart a strategic course past traditional industry boundaries in search of the unknown markets of the future.
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