🌊 Red Ocean Strategy
Compete in an existing market space.
✅ Characteristics:
- Industry is well-defined and crowded
- Competition is fierce (a “bloody ocean” 🩸)
- Companies fight for market share
- Success = outperforming rivals
- Focus on existing demand
- Differentiation OR low cost (rarely both)
🔍 Example:
Fast food chains like McDonald’s vs Burger King. They sell similar products, compete on price, and location — all in the same market space.
🌊 Blue Ocean Strategy
Create a new, uncontested market space.
✅ Characteristics:
- Focus on innovation & value creation
- Make the competition irrelevant
- Capture new demand
- Break the value-cost trade-off
- Create AND capture new market space
🔍 Example:
Cirque du Soleil redefined the circus experience by blending circus with theater — no animals, higher prices, artistic value — creating a new market.
| Feature | Red Ocean | Blue Ocean |
|---|---|---|
| Market Space | Existing | New / Uncontested |
| Competition | Beat the competition | Make competition irrelevant |
| Demand | Exploit existing demand | Create new demand |
| Focus | Either cost OR differentiation | Cost AND differentiation (value innovation) |
| Strategy Goal | Gain bigger slice of market | Create a new market |
| Risk Level | Competitive pressure | Innovation risk, but high reward |
