According to strategic management theories, what strategy involves creating entirely new markets?

The concept of the blue ocean strategy is centered around the idea of creating new market spaces that are uncontested, rather than competing in existing markets where competition is fierce, often referred to as "red oceans". In a blue ocean strategy, companies seek to innovate and deliver unique value propositions that allow them to establish new demand and make the competition irrelevant.

This approach emphasizes the importance of differentiation and innovation, enabling businesses to capture new customers and create a unique market environment that is less saturated. By focusing on value innovation, firms implementing a blue ocean strategy can find ways to unlock new demand and define a market space that did not previously exist, providing them with a significant competitive advantage.

In contrast, a red ocean involves fighting over existing customers within established industries, often leading to price competition and reduced profitability. The other options listed, such as green ocean or yellow ocean strategies, are not widely recognized concepts within strategic management, further solidifying blue ocean strategy as the correct answer in this context.