What does blue ocean strategy emphasize?

Blue ocean strategy emphasizes creating new markets and making competition irrelevant. This approach is based on the idea that companies can achieve higher profitability and growth by exploring untapped market spaces rather than competing head-to-head in saturated markets, which is defined as "red oceans."

By pursuing a blue ocean strategy, businesses seek to innovate and differentiate their offerings, thereby opening up new demand and creating a unique value proposition that appeals to a wide range of customers. This is typically achieved through value innovation, where a company pursues both differentiation and cost leadership simultaneously.

The focus on creating new spaces where competition is absent encourages firms to rethink industry boundaries and offer unique solutions or services that transform consumer experiences. For example, through this strategy, a company might introduce a new product category that does not currently exist in the market, effectively carving out a niche that competitors have overlooked.

In contrast, competing in existing markets with established competitors typically involves strategies that revolve around outperforming known rivals, often leading to a zero-sum game. Reducing costs to outperform rivals and concentrating on customer retention within existing markets are strategies that fall within red ocean thinking, which aims to succeed in saturated markets and often leads to intense competition for limited market shares.